Indian Startups Raised $63 Bn During 2016-20: Report

A joint report by Praxis Global Alliance and Indian Private Equity & Venture Capital Association (IVCA) shows that India has emerged as the third largest tech startup hub in the world

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Indian startups have raised close to USD63 billion during 2016-20, shows a report by Praxis Global Alliance and Indian Private Equity & Venture Capital Association (IVCA).

Titled Overview of Indian Startup Ecosystem, the report said India has emerged as the third largest tech startup hub in the world in view of the investments raised by startups. During 2019, USD 34 billion was invested in Indian ecosystem with an additional USD 17 billion in 2020 (till May). In particular, tech-enabled players continue to drive investor's interest and have dominated the early stage funding landscape in India.

The same period has also seen the emergence of 27 Indian unicorns.

The report points out that this phase of startup ecosystem growth has been fuelled by availability of technical talent pool with positive perception around entrepreneurship, learning and adapting from global tech companies, increased government support through infrastructure investment and funding and large amount of foreign capital flowing into the country, motivating domestic capital pools to participate as well.

"This is a great report covering data and insights on the booming Indian tech startup ecosystem, carrying a fresh perspective about developers and service demand. The growth stage startup and venture capital ecosystem is poised for the next leap with an increasing number of unicorns, soonicorns and minicorns, even amidst the current crisis of COVID-19," said Rajat Tandon, president, IVCA.

"The ecosystem has been relentlessly working to boost the investment environment, the government of India is playing a crucial role in this, but most importantly, the growth stage investors are continuing the momentum, filling a void for startups that have just crossed their mid-life or are at the inflexion point where they, very much need this capital to scale and expand," he added.

In addition, the report mentions that given the booming tech startup ecosystem in India, there remains a huge demand for services across the lifecycle of tech-enabled products like product designing tools, development platforms, product testing tools, solution hosting and infrastructure, and customer support tools.

Madhur Singhal, managing director, Praxis Global Alliance, stated, "India's startup ecosystem is primed for a renewed phase of growth. E-commerce and tech startups have shown resilience during COVID fundamentally altering their unit economics to become more sustainable. The support for this growth is coming from the government as well as investors. It is also heartening to see tens of thousands of new enterprises registered during COVID which shows that the entrepreneurial zeal continues unabated. COVID-19 has reaffirmed the focus on cost efficiency to boost bottom lines and capital efficiency to boost investor return. We anticipate continued increase in the number of unicorns coming out of India."

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