2016 has, so far, been a mixed bag for start-ups in India. While the number of investments into Indian start-ups in Q1 2016 grew by 108% over the previous year’s numbers, the sector also witnessed several ventures scaling down their operations and pivoting their business models in order to stay in the game.
This brings us to question of what changes can the Indian entrepreneurial community expect in 2016, and how will it impact the overall start-up landscape?
For one thing, we can expect the entire start-up ecosystem to evolve. The recent instability faced by the Indian hyper local industry despite having secured funding worth more than $170 million underlines the need to create a holistic start-up support ecosystem that extends beyond funding and investments.
Such an ecosystem will include auxiliary support services such as logistics and technological expertise in order to enable end-to-end start-up solutions to upcoming ventures.
The government has already rolled out several initiatives to empower the country’s start-ups with better policies and a more regulated framework. The emergence of private players like Venture Catalysts as start-up enablers, growth facilitators and innovation platforms also hints at a greater mobilisation of co-working spaces, mentors and angel investment networks in the coming future.
The focus on technology will also become a major factor, as many of the country’s start-ups are now looking at leveraging technology tools such as machine learning and data analyticsto optimise business functions. As such, we can expect more ideas and innovations to surface from tech-driven sectors such as AI and Fintech that can help solve global business challenges through localised solutions.
We are also witnessing an increased interest in the growing start-up industry from banks and mutual funds as well as the country’s robust HNI populaceas investors and investment facilitators. Successful exits and businesses are also encouraging co-founders from Indian start-ups such as Flipkart, Snapdeal, Paytm and Droom to involve themselves as early and late-stage investors into upcoming Indian ventures. These factors have directly led to a growth of 100 percent for the number of private investors and investment firms operating within the country and herald the rise of a new breed of investors who will make funding access much easier and convenient through focussed investments.
Amongst other changes that will impact the Indian start-up community in 2016, the emergence of more start-up hubs within the country seems to be one of the most promising. While Bangalore, Delhi-NCR, Mumbai and Chennai remain the chief entrepreneurial hotspots within India, other cities such as Hyderabad, Coimbatore, Bhubaneswar, Ahmedabad, Pune and Kochi are also staking their claims as viable start-up destinations.
This not only highlights an increase in the country’s innovation quotient and marks an increased impetus towards entrepreneurship, but also serves to firmly entrench India’s position as the fastest growing start-up economy in the world.
India, at present, is home to more than 4200 start-ups and lags only marginally behind the UK. The rapid expansion that the country’s entrepreneurial landscape has witnessed has caused industry experts to estimate that more than 11500 Indian start-ups will be operational by the end of the decade. As the industry goes through a phase of consolidation, we can expect more robust business models and stronger support infrastructure to fuel start-up growth in 2016.
With the present pace that it has set for itself, the Indian start-up revolution is poised to take resolute steps for sustainable growth. This will positively impact the country’s economy while steering the budding entrepreneurial spirit in the right direction.
By Dr Apoorv Ranjan Sharma, Co-Founder & President, Venture Catalysts.