How rapidly is the Indian startup ecosystem growing?

A startup is a growing company or project established by talented entrepreneurs to provide a product or service and bring it to market. A prevailing thought about the startup is that it should be in a progressed country where all the resources are possible. In fact, startups can found anywhere, and their perfect place is in the countries with the highest demands that offer the largest opportunities. Startups are at home in developing countries to solve the problems to make profits and impact.

In the last two decades, if we talk about the developing country, the Indian startup ecosystem has got many success stories and come into the center of attraction due to extensive funding, alliance activities, growing technology, and a rapidly growing domestic market. From 3000 approximately startups in 2014 to a prediction of more than 11000 approximately by 2020, this is the fascinating growth of the Indian startup ecosystem. Specialists also advise that the significant growth is perceived due to the ease of access to funds & mentors and improved M&A pursuits. The opportunities that rest first involve the IoT augmented reality, automation, big data analysis, cloud computing, etc.

There has been a hike in India's number of startup firms associated with its technological and fundamental improvements. Despite this, not all are successful. Some successful startups like Udan, Zomato, Zipdial, Snapdeal, Housing.com, Paytm, Ola cabs, Freshdesk, Swiggy, OYO have proved how companies can add value to the consumers and cause a vital move in the overall startup ecosystems. 

What are the types of startups in India?

1. Self-Funded: As the name suggests, this type of financing arises from self or family funds and investments. These types of startups only estimate at 10% in India. Their main purpose is to gain profits.

2. Investor-Funded: Investor-funded startup companies run with investor funds. This type of company estimates for approximately 90% of overall in India. Their main aim is the growth of profit or loss. 

Various constituents are facilitating the transformation of the Indian startup ecosystem. The important ones are investors as they are choosy about contracts and prioritizing unit economics. On another side, they are picky about business sustainability over the recent market openings and cash-burn to get users.

Indian startup's up&downs

With a new year, there is a lot of enthusiasm and faith in the startup ecosystem's growth. There are several rising trends for 2020 and areas that will recognize the investment and addition activity. For gazing 2020, we have collected stalk of the ecosystem and relying on the guides set in 2019 to infer the trends, the funding measure, and the deals exacted for 2020. At the end of 2020, the funding amount's total value is not very different from 2019. At the edge of 2020, the funding amount is expected to be approximately $12.6 Bn over 778 deals. The total funding boosted by Indian startups between 2014 and 2020 to over $71 Bn. The total count of deals startup funded for the six-year period will reach 5,789 in 2020.

India holds the 3rd position having the largest startup ecosystem in the world. Very soon, it will complete the consistent annual growth of 12-15%. India had about 50,000 startups in 2018; around 8,900 – 9,300 of these are technology-led startups. 1300 new tech startups were born in 2019 alone, implying that it will touch 55K startups by the end of 2020. Around 2-3 tech startups are born every day.

The reasons behind the growth of Indian startups

• Innovative Startups Ideas of India

Many of the startups in India entered the industry by discovering totally new markets or finding ways in existing markets or product lines. Many successful startups are evolving rapidly and transforming the work method of existing industries like Paytm, Redbus, InMobi,Housing.com, Zivame, AdPushup, etc.

• The Inclusion of Women into Entrepreneurship

Significantly, the number of women entrepreneurs reached 14%, up from 10% and 11% in the previous two years. Himani Misra, Co-founder and CEO of Brand Radiator, addressed, “Once you start working, you are outside the purview of gender arrangements…So we must capitalize on our strength, which no one else in the universe holds.” Startups have given women the place to grow and become women entrepreneurs.

• Potential Fundings 

Funding activities are the biggest driving factors in any startup ecosystem. Indian startup has bagged a good amount of funding. The startups have moved on to establish sizeable ticket sizes from many global and domestic funds. The top 15 deals established about 40% of total deal value, demonstrating that most funds considering deal quality more than quantity. The total value of the deal amount in India, $26.3 billion in 2018, was the second-highest of the last decade. SoftBank is one example that has an investment in various startups in India, including OYO, Ola, Paytm, PolicyBazaar, etc. 

• Support from Government

The government, under the direction of PM Narendra Modi, has begun and promoted Startup India. Small Industries Development Bank of India has launched a scheme to assist existing Small and Medium Businesses in need of capital for growth. The government of India has launched a mobile app and a website for easy registration for startups. The government also presents listings of facilitators of trademarks and an 80% reduction in the cost of filing patents. A 10,000 crore rupees fund is set-up by the government to provide funds to the startups as venture capital.