The year 2015 has been a watershed period on many counts for the entire startup ecosystem in the country which includes the entrepreneurs, investors and governments. It has really picked up pace with India being ranked third among global startup ecosystem, having around 4,200 companies emerging.
It has not just stopped at that. Funding is estimated to have grown by 125% from $2.2 billion in 2014 to $4.9 billion in 2015, according a report by Nasscom. This funding is much higher as compared to cumulative funding of $3.2 billion over the 2010-14 period. The total number of active investors have grown by 2.3x from 220 in 2014 to 490 in 2015.
The startup landscape has seen strides in both segments: business-to-business (B2B) and business-to-consumer (B2C). The common theme among these new age firms has been the predominant role of technology to either solve business problems or expand the scope of the market.
The most heartening aspect of the startup wave is the average age of the entrepreneurs, which makes India as the youngest startup nation in the world. According to the Nasscom report, 72% of the founders are less than 35 years old. Added to this, there has been a 50% rise in share of female entrepreneurs in 2015 compared to previous year.
Terming 2015 as one of the best times for startups in India, Padmaja Ruparel, president, Indian Angel Network (IAN) said, “Startups have become an attractive career path for many and the angel investors have become asset class. This is a phenomenon across the country.”
This has also been the year where e-commerce startups and aggregators continue to see the highest share of investments. Driven by this, there are a host of other technology companies which are primarily B2B, fueling various solutions like analytics, supply chain, recruitment etc.
The startup space has also witnessed the transportation of many innovations from the West being localised for the country. Sunil Rao, country head, Developer Relations and Startup Ecosystem, Google said, “On the product development side, almost 50% of the ideas which has come up in the startup area are existing ideas that are on the web. It is only in the B2C space we are seeing lot of innovations, particularly in the wallet space, which concentrate on India centric issues.” He added that there is a lot of innovation in the healthcare and payment space.
This wave in startups has also brought in the corporates and government into action. Technology majors like Wipro and Infosys have set up dedicated fund to be invest in startups. Though these companies have not still made a major headway in the Indian ecosystem, it would not be long before they make their mark.
The government is also playing its role expanding the scope the startups. The slogan “Startup India, Standup India” has really given the push and the Centre is expected to come up with a new policy for this segment. In consonance with this, the market regulator has brought in more liberalised rules for the startups which will enable towards easier access to funds.
While states like Karnataka, Andhra Pradesh and Rajasthan have already rolled out separate startup policies, others are following suit as these companies are likely to be the next big area of job creators. However, there is also a note of caution in the manner in which the startups are flourishing in the country. Rao of Google said, “Just because it (the business model) is working in US does not mean it will necessarily work in India. There has to be some kind of innovation in there. One cannot just copy as is and adapt to the Indian market. At the end of the day, the success of startups are based on how many users they have and how can they monetise on their idea.”
As the new year begins, there is always the excitement of doing something new in the whole startup space. This juggernaut will only gather further mass exploring newer areas to bring technological innovation to a wider population.
Ruparel of Indian Angel Network said, “There is much more opportunity as we are seeing lot more innovative startups emerging. Startup is not a possibility of just a career, but has the potential to disrupt the entire ecosystem and value chain.”
STARTUPS IN ACTION MODE
* India ranks third globally with more than 4,200 startups
* The number of startups has grown over 40% from 2014 to 2015
* Bangalore, NCR and Mumbai continue to be top startup destinations with nearly 65% of the total
* Funding is estimated to grow by 125% from $2.2 billion in 2014 to $4.9 billion in 2015
* Total number of active investors have grown from 220 in 2014 to 490 in 2015
* The number of incubators, accelerators grew from 80 in 2014 to 110 in 2015
* India is the youngest start-up nation in the world with 72% of the founders are less than 35 years old