​​​
  1. Start-up Gains

Start-up Gains

IT sector likely to emerge as the biggest winner of India’s start-up boom

By: | Published: March 7, 2015 12:10 AM

The IT sector’s gains in the next few years could reach to a proportion which was unimaginable  a few years back. At the moment, India ranks fourth for the number of start-ups—after the US, the UK and Israel. But by 2017, India could be home to the second-largest number of start-ups. Given how large IT firms, due to the poor agility inherent to their size, often lag on the innovation factor, the projected start-up boom should make India a hotspot for innovation shopping—large IT firms could look to buy start-ups with a revolutionary product or a concept (remember Facebook’s acquisition of Bangalore-based Little Eye Labs?). Often, in such acquisitions, the start-up team is hired by the acquirer to sustain the innovation momentum. Additionally, the start-up leverages its acquirer’s scale to achieve a viable market. Thus, both the big IT firm and the start-up find themselves in a win-win situation.

Government support for IT start-ups—Budget FY16 announced a R1,000 crore fund for seed capital—is already there, as is the talent needed.

According to Nasscom chairman R Chandrasekaran, 50-60 partnerships between start-ups and large IT firms have already been formalised—thus, there are definite signs of market need. This creates conditions where innovators would need to get more sure-footed about extracting the best value from the biggies. Thus, a pressing need—as much as funding—of start-up incubation is to have the required support in terms of training for M&As, maximising intellectual property gains and pitching to the markets.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top