India, as a country, has traversed from the inception of its first unicorn start-up in 2011 to now having more than 100 unicorns with an aggregate valuation of $350 billion. In fact, “Unicorns have become a national asset to India’s economy”, former CEO of the NITI Aayog, Amitabh Kant, said during the CII (Confederation of Indian Industry) Unicorn Summit. He said that the start-up India movement has led to a 15x increase in funding and a 9x increase in the number of incubators.
Advising start-up founders on holistic and sustainable development for India and the world at large, he said that in the quest for great innovation and great disruption, unicorn start-ups should focus on corporate governance to become large companies in the future. “The key to India’s success of becoming the number one nation of start-ups is our ability to do good corporate governance”, he remarked.
The Indian bureaucrat and country’s G20 Sherpa further noted that the Indian start-up ecosystem cannot grow on the back of foreign money coming in. “Indian start-up movement must be driven by India’s finances. Therefore, country’s insurance companies, pension funds, or large companies should invest in the start-up movement,” he suggested.
Kant, along with other panelists including Abhiraj Singh Bhal, chairman, CII Unicorn Forum & CEO & co-founder, Urban Company, was discussing the latest report launched by CII- ‘Unicorn 2.0: Adding the Next Trillion’. The report highlighted orbital shifts that will define the next decade of unicorns’ journey in the country including more than 50% domestic capital in start-ups and near zero instances of corporate governance lapses. It suggested that founders could create and lead dedicated domestic funds, with subsequent funding support from public institutional investors.
Sharing his thoughts on how domestic funding of start-ups continues to be fueled by some of the large conglomerates in the country, Sanjiv Puri, MD, ITC, noted that corporations would go for funding in areas that are strategically aligned with their business models. Discussing the synergistic relationship between start-ups and large-scale corporates, he highlighted that an ecosystem of start-ups for the last mile delivery helps companies like ITC to participate in the D2C space while also developing newer types of products and bringing forth mass customisation.
While he noted that startups have brought disruptive thinking to the table, he added that legacy businesses can contribute to the development of start-ups in the areas of governance for scalability. “It is not just about processes, it’s also about values, how do you make sure as you scale up and you touch many more things in society and are faced with many more compliance and regulatory requirements,” he said.