The Indian startup ecosystem has its roots in the 90s when the first-generation internet businesses in India such as Naukri.com, Just Dial, Indiamart, Fabmart, Rediff.com, Hotmail etc. were launched
After a thunderous Howdy Modi event at Houston recently where Prime Minister Narendra Modi showcased India’s rise as the global power, speaking at the Bloomberg Global Business Forum on Wednesday, Modi stressed on India’s aspiration to become a $5 trillion economy and what makes it the preferred destination for foreign investors. Importantly, in his call for global investment into India, Narendra Modi also highlighted the importance of the country’s growing startup ecosystem. The prime minister asked investors to come to India if they want to invest in startups with a huge market, PMO India tweeted, even as he talked about India’s youth as one of the largest users of the app economy.
India’s global dominance with respect to its startup ecosystem being the third-largest globally also found mention in Narendra Modi’s speech when he said that the encouragement that the Indian youth is getting for innovation is why India is at the third spot after the US and China when it comes to the number of unicorns. The prime minister further stressed on the ease of doing business environment along with improvement in global indexes for competitiveness, innovation, and World Bank’s Ease of Doing Business.
India’s startup ecosystem is among the most recent ecosystems globally, coming up only after 2006, particularly in comparison to legacy ecosystems of the US, UK or China. However, the Indian ecosystem has its roots in the 90s when the first-generation internet businesses in India such as Naukri.com, Just Dial, Indiamart, Fabmart, Rediff.com, Hotmail etc. were launched, most of which are listed while few got acquired. But it was the last decade when the growth really came around with the launch of startups like Flipkart, Snapdeal, Zomato, Inmobi, Ola, Paytm, Quikr etc., that are today’s multi-million giants in their respective sectors.
Interestingly, these companies along with their launch also brought ‘startup’ tag along with them — a western concept of calling companies doing businesses on the internet only that helped them multiply their growth much faster than traditional businesses — a strategy that caught investors’ interest to pump money into such ventures that gave prominence to acquire market share before making profits.
One can comfortably claim the current trade to be the beginning of startup ecosystem 2.0, many from the industry believe the switch from 1.0 to 2.0 effectively happening after last year’s buyout of Flipkart by Walmart that has put faith back in investors that Indian startup ecosystem can deliver returns to investors. Companies such as OYO, Swiggy, Dunzo, Hike, Bigbasket launched this decade are the key players of this 2.0 ecosystem.