1. Start-ups

Startup India Standup India

Intern, Transfin.
Jan 1, 1970 12:00 AM 4 min read

Feeling 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 saw 1200 startups spring up in India along with was more than 50% growth in the number of ‘Advanced Tech’ startups. 2018 also saw an increase in the number of unicorns or privately held startups that are valued at over $1 billion, with 8 startups including Freshworks, OYO, Swiggy, Billdesk, Paytm Mall, 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.


Bangalore, Delhi & NCR and Mumbai still occupy the prime position when it comes to the strength of the startup ecosystem but startups are rapidly expanding especially in the tier II cities to tap the immense potential. These growing and emerging centers include the cities of Hyderabad, Pune, Chennai, Chandigarh, Jaipur, Indore, Kochi etc. The reason for such rapid growth include - the presence of good engineering and management colleges, initiatives such as incubation centers like IIM-C Innovation Park, RICH (Research and Innovation circle of Hyderabad), established network of angel and venture capital investors like the Calcutta Angel’s Network (CAN), 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.


Merger & Acquisition activity has picked up momentum in the startup industry of late. The Walmart –Flipkart deal made headlines as the former seeks to capture the Indian consumer base. Merger and Acquisition data can be broken down according to the acquirer category- Indian startups (39%), Global Investors (34%), Indian Corporates (20%) and Venture Capitalists (7%). Such merger and acquisition deals are creating synergy in the market as companies combine their tech capabilities, expand their market coverage and tap the human resource potential.


We all might have heard of the show ‘Shark Tank’ where budding entrepreneurs pitch their idea to a panel of investors to receive funding. Truly, the market for startup funding is nothing short of a shark tank. But the trends look promising. The total amount of funding has increased by 108% from $2bn in 2017 to $4.2bn in 2018. OYO Rooms was the biggest gainer. It raised $1bn in funding from Softbank, Lightspeed and Sequoia Capital. This made OYO the most valuable startup in India. It was followed by Paytm Mall, Swiggy, Udaan, Curefit, Sharechat, Lending Kart, Grofers and Qtrove. Together these ten startups raised 58% of the total funding. After the foundation stage called the seed stage comes further rounds of fundraising called A, B, C and so on. Late-stage funding that is Series C, D, E, F rose from $847 billion in 2017 to $3 billion in 2018. This shows the growing maturity of Indian startups. Asia has become the new startup center for global investors led by China. This has resulted in increased global investment in Indian startups.


There is 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. Apart from this, funding was a major problem. 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 by the number of straight out of college entrepreneurs, government initiatives, increasing number of business plan and 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 also has been a consistent rise in the number of women enrolling in engineering and management colleges. This has been reflected in the gradually increasing number of female entrepreneurs with their share increasing to 14%. Rashmi Daga, winner of the ET-Facebook Woman Ahead is such an example who founded FreshMenu.


According to a report by the World Economic Forum and Bain & Company, by 2030 not only will India’sconsumption increase four times but India will still remain as one of the youngest nations with over 1 billion active internet users. 77% of the people in 2030 would have been born in the 1980s and later. This generation has had access to a greater variety of goods and services than their predecessors. They want efficient and low-cost services on a fully automated digital platform. Startups need to leverage on 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 demographic dividend from turning into a demographic curse, we must create jobs and for that the growth of startups is necessary. The sun has just risen for startups and there are miles ahead to go…...