The ecosystem is in place, now wait for the results
Indian technology start-ups have begun to make a mark globally. According to a Nasscom-Zinnov report, Start-up India—Momentous Rise of the Indian Start-up Ecosystem, the country has moved up to the third position—behind the US and the UK—in the ranks of global start-up ecosystem, with over 4,200 start-ups so far in 2015. India also accounts for the fastest-growing base of start-ups worldwide. The ride up the elevator for Start-up India is due to a multitude of reasons. This includes a total funding of over $5 billion in 2015, a 125% increase over 2014; the number of active investors more than doubling since last year to 490 and a 40% increase in the number of incubators/accelerators in the country to 110. Mumbai, Bangalore and the NCR account for over 65% of the start-ups. Bangalore is the only Indian city in the Global Start-up Ecosystem Ranking 2015, at rank 15.
The difference this time round is that Indian start-ups are creating innovative technology solutions to address key social problems that the country faces including power, infrastructure, healthcare, education and agricultural productivity. The average valuation of start-ups has also risen to $2.5-2.7 million. Not surprisingly, it is youth that is driving start-ups—over 41% of the founders are under 30 years. Engineering graduates account for 35% of the founders while 26% are MBAs. Indian start-ups are getting noticed. Team Indus, the only Indian entry to Google Lunar X Prize—in which, a robot has to be privately landed on the moon and send data back to earth—has already won $1 million in the landing category.
The fact that the youth are willing to take the risk of setting up their own venture as opposed to joining an established company is a clear indication of the maturing of India. The increasing number of start-ups has provided more jobs at all levels. Already, over 80,000 people are employed by start-ups and 3-4 new start-ups are born each day. In 2015 alone, e-commerce start-ups raised close to $2 billion in FDI. The majority on the tech start-ups are in the B2C category. The areas covered by these include e-commerce, consumer services, aggregators and enterprise software. This is definitely a good beginning for India. After all, today’s start-up could well morph into a large corporation in the not-too-distant future.