6 Reasons Indian Startups Have Been Getting Global Recognition On National Startup Day 2024, we look at how despite multiple challenges startups in India have seen remarkable growth over the years
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The transformation of India's startup ecosystem has been nothing short of a miracle. From a mere 400 in 2016, the number of startups in India has grown to more than 100,000 in 2023, according to the Department for Promotion of Industry and Internal Trade (DPIIT).
Despite many challenges, Indian startups and startup founders have been offering game-changing solutions to not just the domestic market, but to countries across the world. This exceptional growth has been fuelled by many factors.
Technological advancements and adoption
India has leapfrogged in terms of technological adoption like no one else. This has played a key role in shaping the modern startup ecosystem. Technology has democratized the way we function in many ways than one could imagine. The usage of technology has led to greater solutions at a reasonable rate, a perfect combination for the Indian market. This led to further adoption of technologies both at the demand and supply side of the chain.
"India's undisputed technological reputation on the global stage sets her apart from other countries. Indian startups have made significant strides in areas such as software development, artificial intelligence, and e-commerce, earning international acclaim. This tech-savvy reputation enjoyed by India not only garners global recognition but also positions Indian startups as formidable contenders in the global arena in the aforementioned technological domains," said Sandiip Bhammer, founder and co-managing partner, Green Frontier Capital.
Diverse market and talent
Experts say that the youthful dynamism of India's population has been a huge driving force. With an energetic and dynamic workforce, the startup arena benefits from a constant influx of fresh perspectives and unwavering enthusiasm. "This youthful vigour, coupled with a willingness to embrace risk (especially without the fear of failure), serves as the bedrock for breakthrough innovation, propelling the ecosystem to new heights. India's sizeable and diverse market, with a population exceeding 1.4 billion citizens, provides a fertile ground for startups to test and scale their innovations. This sheer diversity and market potential to deliver "at scale" encourages adaptability and fosters innovation, enabling startups to effectively cater to a wide spectrum of consumer needs," he added.
Funding is one of the key reasons behind India attaining the status of the world's third-largest startup ecosystem. The potential of Indian startups could be tapped only because of the influx of investments. If not for that, the startups would not have reached where they have despite having the talent and innovation in place. While 2023 was slow in terms of funding, the funding kept increasing from 2016 to 2021. According to Statista, in 2023, the Indian startup ecosystem received a total funding of nearly 11.3 billion U.S. dollars. This was a decrease from last year's funding amounting to over 25 billion U.S. dollars. 2021 witnessed the highest startup funding in the recorded period.
However, many startups faced the last year's hiccup with perseverance. According to expert predictions, we will see a revival in funding this year, albeit with caution and with an eye on profitability.
Innovation at core
"The heartbeat of Indian innovation echoes the resounding potential of startups—armed with the ability and tenacity to disrupt and offer transformative solutions for the vast market. Just as data fuels the engine of progress, consider this: In the last decade alone, Indian startups have burgeoned - creating new category leaders in an untapped market - Freshworks, Swiggy, Paytm, Veeba, Nykaa and so on. The ability to provide game-changing solutions is not just a pursuit; it's a commitment to rewriting the code of possibilities for a billion dreams. Buckle up, for the journey has just begun," said Shashank Randev, VC Founder, 100X.VC.
In the last 10 years, we have seen many in India graduating from top institutions and saying no to high-paying corporate jobs within and outside India. There is an increased zeal to innovate and give back to the society. We have seen entrepreneurial spirit reaching the nooks and corners of the country, so much so that many students today want to take it up as a career. "India's flourishing startup ecosystem owes its success to a dynamic blend of innovation, resilience, and untapped potential. This robust environment is fostering groundbreaking ideas across various sectors, including e-commerce, fintech, and healthtech. The achievement is not only a testament to the entrepreneurial spirit but also reflects the robust support from the government, facilitated access to funding, a vast market, and a pool of highly qualified entrepreneurs," said Pratip Mazumdar, co-founder, Inflexor Ventures.
Push from the government
Finally, government support has been instrumental in propelling the ecosystem forward. The government has launched many schemes to boost the startup ecosystem such as the Seed Fund Scheme, Fund of Funds Scheme, and Credit Guarantee Scheme. "Initiatives such as 'Startup India' and 'Make in India' have cultivated an enabling environment, characterized by supportive policies, streamlined regulations, and incentivized programs - all contributing significantly to the ecosystem's growth," said Bhammer.
"The achievement is not only a testament to the entrepreneurial spirit but also reflects the robust support from the government, facilitated access to funding, a vast market, and a pool of highly qualified entrepreneurs. Despite facing ongoing challenges, India remains a breeding ground for inventive technologies and imaginative solutions that resonate not only within the nation but also on a global scale. The trajectory of India's startup ecosystem points towards an unprecedented ascent in the coming years, with the assurance of appropriate policies and sustained funding," added Mazumdar.