Design artists work on their computer terminals at the Start-up Village in Kinfra High Tech Park in Kochi, India. Reuters
Before the funding winter hit the Indian startup ecosystem, the country gave birth to at least 14 unicorns in the first five months of the year. According to Union Science and Technology Minister Dr Jitendra Singh, the country has risen from 300 to 70,000 startups in the last 8 years, which is a massive 20,000 per cent increase.
“We should aim at a sustainable startup ecosystem because startups are going to determine the future economy of India. It is a matter of pride that globally out of every 10 unicorns, one is Indian,” the minister said during an event organised by the PHD Chamber of Commerce and Industry late on Thursday.
“The concept of startup is still new to India so we should work collectively in this direction. We should explore sectors like agriculture, dairy and space which has immense potential and are exclusive to us,” Singh added.
The Indian Unicorns are flourishing in the fast-paced and dynamic economy of today.
These startups are not only developing innovative solutions and technologies but are generating large-scale employment. Till financial year 2016-17, approximately one unicorn was being added every year. Over the past four years (since FY 2017-18), this number has been increasing exponentially, with a whopping 66 per cent Year-on-Year growth in the number of additional unicorns being added every year. As of May 5, 2022, India is home to 100 unicorns with a total valuation of $332.7 billion. Out of the total number of unicorns, 44 unicorns with a total valuation of $93 billion were born in 2021 and 14 unicorns with a total valuation of $18.9 billion were born in 2022.
According to a report by market intelligence provider Tracxn, 14 Indian companies turned unicorns between January and June 1.
Last year, India saw 13 unicorns in the same time period.
Union Minister of State for Commerce and Industry Anupriya Patel highlighted the astonishing growth of the startups in a short span of time.
“Startups are fueled by innovation and entrepreneurial spirit, spreading across the length and breadth of the nation. More than 50 per cent of startups are witnessed in tier 2 and 3 cities which are a sign of great success,” she told the gathering.
Nearly 47 per cent of startup businesses have women as their director or CEO.
India today has more than 70,000 DPIIT-recognised startups.
PHDCCI President Pradeep Multani said that by leveraging its strengths in human capital and ICT (information and communications technology) services, and transitioning to a digital and knowledge-based economy, “India is fast becoming a breeding ground for innovation and startups”.
“Knowledge economies use ICT, innovation and research and higher education and specialised skills to create, disseminate, and apply knowledge for growth,” he said.
However, the startups ecosystem is witnessing a funding winter owing to Aglobal macro-economic factors that can last up to 18-24 months.
As VC money disappears amid economic slowdown, tech startups have laid off over 20,000 employees the world over since April, while more than 8,000 employees have lost jobs at the Indian startups led by edtech platforms.
The situation is set to get worse with recession looming and funding drying up.
Several large investment firms like Sequoia Capital, Lightspeed Venture Partners, Craft Ventures, and Y Combinator etc have sent memos and footnotes to their portfolio companies and startups on how to endure the ongoing crisis.
Meanwhile India has emerged as the 3rd largest ecosystem for startups globally with over 69,000 DPIIT-recognised startups across 647 districts of the country as of 02nd May 2022.
India ranks #2nd in innovation quality with top positions in the quality of scientific publications and the quality of its universities among middle-income economies.
The innovation in India is not just limited to certain sectors. We have recognised startups solving problems in 56 diverse industrial sectors with 13 per cent from IT services, 9 per cent healthcare and life sciences, 7 per cent education, 5 per cent professional and commercial services, 5 per cent agriculture and 5 per cent food & beverages.
Indian Startup Ecosystem has seen exponential growth in past few years (2015-2021): that is 9X increase in the number of investors. 7X increase in the total funding of startups and a 7X increase in the number of incubators.