Too lazy to go to the market? Dunzo has you covered. (a+b)^2 seems like a mystery? Byju’s has a solution for you. Short on cash? Paytm Karo!! ‘Startup’ has become the buzzword among millennials and for all the right reasons.
India ranks third globally in terms of its ‘startup ecosystem’ after USA and China. We have made huge strides in the Global Innovation Index and are currently placed 57th on the list. 2018 alone witnessed c. 1,200 startups spring up in India, along with more than 50% growth in the number of ‘Advanced Tech’ startups.
2018 also saw an increase in the number of unicorns or startups that are valued at over $1bn, with 8 startups including Freshworks, OYO, Swiggy, Billdesk, Policybazaar, Udaan and Byju’s entering the unicorn club. In 2019, more startups like Practo, Big Basket and MobiKwik are expected to cross this much-coveted mark. This represents a paradigm shift in the Indian economy.
Startups usually choose Bangalore, Delhi & NCR and Mumbai as their prime locations. However, with an expansion in technology and push for skill training, cities like Hyderabad, Pune, Chennai, Chandigarh, Jaipur, Indore, Kochi etc. are also emerging as startup hubs. Opening up of quality education centres, engineering and management colleges along with initiatives such as incubation centers like IIM-C Innovation Park, RICH (Research and Innovation circle of Hyderabad), improving IT and telecom infrastructure, government-backed programmes like the Atal Tinkering Labs, Fund of Funds for Startups, tax exemption schemes and National Initiative for Development and Harnessing Innovations etc. provide the sector with a much-needed filip. An established network of angel and venture capital investors like the Calcutta Angels Network only further strengthen the case.
Merger & Acquisition activity has also picked up momentum in the startup industry of late. Walmart's $16bn acquisition of Flikart made headlines. Such merger and acquisition deals create valuable synergies in the market as companies combine their tech capabilities, expand their market coverage and tap the human resource potential.
You might have heard of the show ‘Shark Tank’ where budding entrepreneurs pitch their ideas to a panel of investors persuading them to invest their money in their idea. Truly, the market for startup funding is nothing short of a shark tank. But the latest trends look promising. Asia has become the new startup center for global investors led by China. This has resulted in increased global investment in Indian startups. The total amount of funding in Indian startups has increased over 108% from $2bn in 2017 to $4.2bn in 2018. OYO Rooms was the biggest gainer, raising $1bn in funding from Softbank, Lightspeed and Sequoia Capital, making it the most valuable startup in India. It was followed by Paytm Mall, Swiggy, Udaan, Curefit, Sharechat, Lending Kart, Grofers and Qtrove.
There has also been a perceptible change in the way we view Entrepreneurship and Innovation. Earlier, the society harbored a very conservative view and the very idea of opening a startup leaving behind a settled job and life was frowned upon. Funding was also a major roadblock.
Back in the 2000s, India’s network of Seed and Angel investors, Venture Capitalists and Private Equity investors was very weak. But the times are changing. Creativity is actively encouraged as evident from the increasing number of straight out of college entrepreneurs, government initiatives, increasing number of entrepreneurship competitions in schools and colleges, support from faculties and mentors in premier institutions like IITs and IIMs, and most importantly failure being seen as a stepping stone to success. Today 35% of the startup founders are engineering and MBA graduates. There has also been a consistent rise in the number of women entrepreneurs with their share increasing to 14%. Rashmi Daga, winner of the ET-Facebook Woman Ahead, and Founder of FreshMenu is one such example.
According to a report by the World Economic Forum and Bain & Company, India by 2030 will have over 1 billion active internet users, who will have greater access to a variety of goods and services than their predecessors. Startups need to leverage this trend. Growing telecom industry, plummeting data costs and enhanced use of mobile internet services will facilitate the growth of startups. If India wants to become a global economic powerhouse and prevent its increasing demographic dividend from turning into a curse, it must create more jobs. The flourishing start up sector can be a answer to the growing unemployment in the country. The sun has just risen for startups and there are miles ahead to go…...
(We are now on your favourite messaging app – WhatsApp. We strongly recommend you SUBSCRIBE to start receiving your Fresh, Homegrown and Handpicked News Feed.)