10 years and 31,000 startups later, Indian startup ecosystem bets on deep tech, Gen AI for subsequent part of development

Because it accomplished a decade of its existence, with a formidable $70 b in fairness funding and constructing a 90-plus unicorn membership, the Indian tech startup ecosystem, with 31,000 startups, units its eyes on the subsequent part of development pushed by deep tech and Generative AI.

From virtually nowhere, the nation has turn into the third greatest hub for startups after the US and China, creating over 10.50 lakh jobs. That about 1,000 startups, together with 400 from rising areas, had been added in 2023 alone exhibits the power of the ecosystem, however the funding winters over the previous couple of years. 

“This surge has positioned India because the third-largest startup ecosystem globally, with over 950 new tech startups based in 2023 alone. Key sectors resembling enterprise tech, well being tech, and fintech have been on the forefront of this development, contributing over 70 p.c. of tech startups in 2023, up from 60 per cent in 2014,” Kritika Murugesan,  Director of Nasscom 10,000 Begin-ups Initiative, has stated.

“Some of the important developments in India’s tech panorama has been the fifteen-fold enhance within the variety of tech startups, now surpassing 31,000,” she stated.

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This surge has positioned India because the third-largest startup ecosystem globally.

She stated the nation’s startup ecosystem has additionally demonstrated resilience, weathering challenges such because the COVID-19 pandemic, world financial uncertainties, and funding slowdowns. 

The rise of Indian tech startups has not solely disrupted conventional industries however has additionally impressed a wave of innovation and entrepreneurship. Success tales of unicorns, valued at over $1 billion, have emerged throughout numerous sectors, together with e-commerce, fintech, and enterprise software program. These unicorns have attracted important investments and have solidified India’s place as a world tech hub.

Challenges

Nonetheless, points just like the depth of funding continues to pose a problem to the startup ecosystem. Whereas India boasts a rising variety of unicorns, it lags behind the US and China when it comes to the sheer amount of those high-value startups.

Murugesan argues that the main target shouldn’t solely be on numbers but in addition on the influence created by these tech startups. She identified that  15 tech IPOs raised over $2.4 billion on Indian inventory exchanges between 2019 and 2023, which displays continued curiosity among the many investor neighborhood.

Requested the place the subsequent part of development would come from, she stated the main target was shifting in direction of deep tech startups, leveraging AI and rising applied sciences to handle world challenges.

“With over 3,000 deep tech startups and rising investments in AI, India is poised to turn into a frontrunner on this area,” she added.

Subsequent part of development

Welcoming the transfer to take away the angel tax on investments into startups, Ashish Agarwal, Vice-President, and Head of Public Coverage of Nasscom, appealed to the federal government to implement SEBI’s 2018 suggestion to permit the itemizing of fairness shares of start-ups included outdoors India on Indian inventory exchanges.

“There’s a rising curiosity amongst Indian start-ups headquartered abroad to maneuver to India. These start-ups had chosen to include abroad on account of numerous causes, together with investor mandates, larger acceptance of newer enterprise fashions abroad, ease of compliance, and decrease capital beneficial properties taxes,” he stated.

“These start-ups are contemplating public itemizing in India to boost capital and construct for the subsequent degree of development. This might result in the creation of capital and wealth in India and would additional increase India’s capital market infrastructure,” he stated, citing the examples of the US and Hong Kong that allowed direct itemizing of overseas corporations on their home inventory exchanges.

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M Srinivasa Rao, Chief Government Officer of T-Hub, stated the expansion of women-led startups was an achievement of the ecosystem. “Feminine entrepreneurship additionally rose, with women-led startups growing from 10% in 2017 to 18% in 2022, supported by initiatives just like the Fund of Funds for Startups Scheme,” he stated.

Regardless of these achievements, challenges remained, together with entry to funding, regulatory hurdles, and infrastructure gaps, necessitating continued assist for sustained development, he stated.