India had a never-seen-before surge in the number of startups being founded across the spectrum in the previous nine years that no other nation observed, despite the current financing winter and hiring slowdown that continue to plague the IT industry.
India quickly overtook China and the US to claim third place in the world's startup ecosystem rankings.
The startup ecosystem in India has been moving at an unrelenting speed. According to a recent report by Nasscom in collaboration with Zinnov, a management consulting firm, the tracks are firmly laid through corporate participation in the form of investments, acquisitions, and open innovation programmes, as well as government support, with the momentum being fed by founders and funders alike.
Jitendra Singh, the minister of state for science and technology, said last month that the number of startups in the nation had increased 300 times over the last nine years.
In his remarks at the National Innovation Awards ceremony at the Rashtrapati Bhavan in Delhi, Singh noted that there were just 350 startups in India in 2014, but that number has now increased to over 90,000.
Despite a downturn in investment, India still has the third-largest digital startup ecosystem in the world. Over 1,300 new active businesses were added last year, bringing the overall number of active startups to between 25,000 and 27,00.
Additionally, India added 23 unicorns in 2022, which was the second-highest number worldwide.
According to Debjani Ghosh, President of Nasscom, “despite the current downturns, opportunities abound for innovative companies that are leveraging emerging technologies to create actionable impact while prioritising business fundamentals over growth.”
In August of the previous year, India had surpassed the 100 unicorn threshold.
Prime Minister Narendra Modi noted the accomplishment in his monthly radio address, “eMann Ki Baat,” noting that “the number of unicorns in the country has reached the figure of 100 and you surely know that a unicorn is a startup worth at least 7,500 crore rupees.” These unicorns are worth a combined $330 billion, or more than 25 lakh crore rupees.
“Every Indian should be proud of this, without a doubt. You'll be astonished to learn that 44 of our total number of unicorns appeared last year. Additionally, 14 additional unicorns were born in the last three to four months, he said.
The Prime Minister had stressed that the startup environment in India today is not simply restricted to large cities, but entrepreneurs are also appearing in smaller cities and villages, demonstrating that in India, anyone with an original idea can make money.
Furthermore, at least 36 unicorns and prospective unicorns in the nation have at least one female founder or co-founder, and 18% of businesses have at least one female founder or co-founder.
The government has also announced a monthly stipend for firms with women as founders or co-founders of Rs 20,000 per month for a period of one year in an effort to increase the presence of women in the startup ecosystem.
Rajeev Chandrasekhar, the Union Minister of State for Electronics and IT, said this week that there is an urgent need to improve collaboration between businesses, the government, academic institutions, and startups so that the nation's talent pool may continue to innovate and develop solutions to tackle real-life challenges.
The minister stressed the need of strengthening entrepreneurs via corporate and governmental partnership during his speech at the CII entrepreneurs Summit.
Chandrasekhar addressed the crowd, “These are wonderful times to strengthen links between corporates, government, academia, and startups to help enhance the innovation capabilities of our nation and the capability of the innovation ecosystem in our country.
According to him, the nation has made significant progress in enabling entrepreneurs during the last nine years.
The minister said, “Young entrepreneurs in India are living exciting times right now because there are so many opportunities available to them.”
The impending Digital India Act (DIA), according to Chandrasekhar, would facilitate startup developments across the nation.
“Prime Minister Narendra Modi is very clear that anything the government does should not cause difficulties for innovation in the startup space,” he added.
The Nasscom-Zinnov report claims that while it is understandable to be concerned about funding levels, a deeper examination of market behaviour and investment trends reveals that the startup ecosystem is not only prepared to weather the slowdown but will also continue in 2023 with a renewed focus on customers and investors.
The Indian startup ecosystem is well-positioned to withstand this storm given the solid foundations of the consumer demography, third generation of entrepreneurs, and a robust tech skill pool.