Over 1,200 tech start-ups added, $4.3 billion funding received in 2018

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Updated: November 15, 2018 6:48:40 AM

Addition of over 1,200 tech start-ups, $4.3 billion funding received in 2018: Nasscom report.

These trends were discussed at the launch of the Nasscom report on the ‘Indian Start-up Ecosystem —Approaching Escape Velocity’, in Bengaluru recently.

The start-up landscape in the country is buzzing with action. After a brief slowdown witnessed in 2016-17, the start-up sector is witnessing an influx of investors and numbers tell the story. There has been an addition of over 1,200 start-ups this year, taking the total number of tech start-ups to 7,200-7,700. Investment into start-ups have increased by over 100%, from $2.0 billion in 2017 to $4.2 billion in 2018.
The total number of start-up funding deals especially in the late stages (Series C, D, E, F) witnessed a massive growth of around 250%, from $847 million in 2017 to $3.0 billion in 2018. Even though the amount of seed stage funding raised stood at $151 million, the larger number of late-stage deals rose sharply, signalling a renewed investor confidence in the Indian start-up ecosystem. India has also moved to 57th rank in Global Innovation Index, up from 60th in 2017. These trends were discussed at the launch of the Nasscom report on the ‘Indian Start-up Ecosystem —Approaching Escape Velocity’, in Bengaluru recently.

Growing at 50% year on year, advanced tech start-ups focused on creating solutions in segments like Artificial Intelligence, Analytics, Augmented Reality/Virtual reality, Blockchain and Internet of Things, among others, have witnessed a momentous rise in 2018, driven by increase in internet penetration, better infrastructure for digital transactions, government push on financial inclusion and innovative tech accelerating the pace of payments, lending and digital banking. Implementation of artificial intelligence is also becoming a norm, growing at 5-year CAGR of 54-58%, witnessing over 120% growth in funding for AI start-ups (over $150 million invested in 2018). Further, blockchain start-ups have observed significant inflow of funding ($2-11 million), growing over 500% year on year.

Indian unicorns in the B2C space continue to garner global funds. Creating a benchmark in the global start-up ecosystem, the year 2018 witnessed addition of eight unicorns. India also saw more than 400 cross border start-ups in 2018, the report said. The disruptive innovation in technology and process is creating newer Indian start-ups and foreign investors are showing immense interest in these start-ups. This has also led to creating more than 40,000 new direct jobs and 4-5 lakh indirect jobs, taking the total direct job base to 1.6-1.7 lakh.

Debjani Ghosh, president, Nasscom, said, “Today, India is brimming with new ideas which need the right guidance and funding to be scalable for the market. India is advancing steadily towards its
digital transformation. The start-up ecosystem is playing a critical role here, bringing in innovation and disruption in much-needed areas, creating jobs, and offering technological solutions to all kinds of problems, thereby improving the lives of people.”

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