India is known for its strong cultural and economic heritage, and for the past decade, the spirit of entrepreneurship has only strengthened. Prime Minister Narendra Modi’s vision for India — a nation where people tap into their full potential as entrepreneurs — is being accomplished with India becoming the third most competitive startup ecosystem in the world. Startups are now being looked at as the most influential catalysts to solve many social issues, and their significance in the space has seen a meteoric rise: India had 452 startups in 2016 and this number has now skyrocketed to more than 84,000.
In 2011, the concept of ‘unicorn’ companies i.e. startups having a value of over $1 billion was an alien one, but today India has over 100 unicorns with a cumulative market value of above $350 billion. The growth of the startup industry in such an overwhelming manner can be credited to the technological advancements, to the support of the Indian Government and to the collective changed mindset of the youth that value taking risks and embracing entrepreneurship.
The adoption of digital technologies in the startup scene has made it easy for entrepreneurs to start and grow their businesses. Software technology, cloud computing, blockchain and artificial intelligence have enabled startups to explore innovation and to take smart cost-cutting steps. India now has 27,000 active tech startups, most of which are developing applications and services in India to adhere to the Sustainable Development Goals (SDG). One such example of this is String Bio, a company that has enabled a methane- based value chain. The Indian Government is also supporting startups in the defence industry: it recently allocated $68 million for 250 defence startups to come up with innovative defence solutions.
The Government also launched the Atal Innovation Mission with the aim of promoting innovation and entrepreneurship among students and young professionals. It is also offering tax incentives and simplifying labor law norms to further facilitate the journey of startups. Most importantly, the growing younger population has the eagerness to start something new, and the presence of the internet and social media have made accessible the success stories of successful entrepreneurs. This has definitely changed the mindset of today’s youth and motivated them to venture out.
Sanjay Nath, co-founder and managing partner of Blume Ventures, says, “Indian entrepreneurs never lacked imagination. But, in the last 10 years, the best talent was always limited to corporations. Now, that gap is being bridged. This reverse flow of talent is the most inspiring thing about the B2B startup sector right now.” He is right: India is the fifth largest receiver of investments in startups offering AI-based products and services, according to the Stanford University’s Annual AI Index report.
One challenge that startups may face is the unwillingness of banks to provide the necessary funding. However, both foreign and domestic venture capital firms, such as SoftBank and Accel, have started to invest heavily in Indian startups, and this is a very good sign for the ecosystem’s growth.
India is also setting up a G20 initiative called ‘Startup20’ to foster collaboration and cooperation in economic and social systems across the globe. Its goal is to come up with a uniform definition of startups that would enable the nations to enact effective policies and tackle the current issues in valuation and taxation.
The startup-frenzy in India looks very strong and sustainable. Startups are contibuting massively for the country’s economic growth and innovation capabilities. This paved pro-entrepreneurial path and the revolutionary steps taken by the government will undoubtedly help India become a great player in both the local and global markets.
