Indian Startup Trends Highlighted by the Economic Survey 2021-22
Over the last decade, India's startup ecosystem has expanded dramatically, from a handful of tech companies to now thousands of innovative new ventures. The internet has facilitated the creation of thousands of startups over the last decade that have tackled unique problems, transformed industries, and created new segments in the Indian technological landscape.
DPIIT Recognizes Over 61,400 Indian Startups
The Economic Survey 2021-22 shows that the Department for Promotion of Industry and Internal Trade (DPIIT) has recognized more than 61,400 startups in India, with at least 14,000 being recognized during fiscal 2022. The survey is an annual economic report card that looks at the performance of various sectors and makes recommendations for future actions. It also includes a GDP growth forecast.
India now has the world's largest working population, which startups are expected to capitalize on over the next five years
According to the survey, each of India's 555 districts had at least one new startup, demonstrating that the number of startups in India has increased dramatically over the last six years, with the majority of them in the IT/knowledge based sectors. According to the survey, "Startups in India have grown remarkably over the last six years. The number of new recognized startups has increased to over 14,000 in 2021-22 from only 733 in 2016-17".
India The World's 3rd Largest Ecosystem
According to the Economic Survey 2021-22, with over 62,200 recognized startups spread across 636 districts, India has the world's third largest startup ecosystem after the US and China. According to Invest India, India has 85 unicorns worth $287.89 billion as of January 28, 2022, whereas the Economic Survey only provided data through January 14, 2022. In 2021, 44 unicorns were born, with a total value of $90.67 billion, and four unicorns were born in 2022, with a total value of $4.72 billion. In today's world, one unicorn out of every ten is born in India. Furthermore, the Indian startup ecosystem has seen exponential growth in the last few years(2015-2021), with a 9x increase in the number of investors, a 7x increase in total startup funding, and a 7x increase in the number of incubators.
Delhi Dethrones Bengaluru as the Startup Capital of India
The startups are from 56 different industries, with IT services accounting for 13 percent, healthcare and life sciences accounting for nine percent, education accounting for seven percent, professional & commercial services accounting for five percent, agriculture accounting for four percent and food & beverages accounting for four percent.
With increased smartphone penetration and the digitization of commerce in all aspects of life, house hold name tech companies are contributing to India's unicorn boom. Apart from fintech, the unicorn universe is dominated by e-Commerce grocery, SaaS, and market place players.
The Economic Survey 202122 revealed India's burgeoning startup scene in space technology. The survey also found that the number of startups in the sector has increased from 11 in 2019 to 47 in 2021. Delhi has recently dethroned Bengaluru as the startup capital of India. Between April 2019 and December 2021, over 5,000 recognized startups were added in Delhi, while 4,514 were added in Bengaluru. According to the survey, Maharashtra has the most well known startups, with 11,308 in total.
More than 555 districts had a startup last year. In 2016-17, only 121 districts had at least one new startup. While each startup's path to becoming a unicorn is different, the average time for a startup to become a unicorn is six months to 37 years. In 2021, Mensa Brands became a unicorn in just six months, making it one of Asia's fastest growing unicorns. The four Indian startups that have become ‘Decacorns'(companies valued at more than $10 billion) are Flipkart, BYJUs, Paytm, and Swiggy.
The survey also drew attention to the recent flurry of initial public offerings (IPOs) by new age companies. It has been stated, "In April November 2021, Rs. 89,066 crore was raised through 75 IPO issues, much higher than in any year in the last decade". In January, Indian startups received record investments of up to $3.5 billion in 130 deals, a decadal high in the midst of a global market downturn and an indication of sustained investor interest.
The total value of disclosed deals in January was six times that of the same month last year, when 75 deals worth $600 million were disclosed. According to the data, 65 deals worth $1 billion were closed by Indian startups in January 2020.
While the first decade of the 21st century was focused on bringing India's cities & metros online, the last ten years have been focused on using the internet to create businesses and startups, as well as to pass the digital torch to rural India. India now has the world's largest working population, which startups are expected to capitalize on over the next five years. More than 500 million people use the internet in the country. As a result, we can anticipate widespread adoption of blockchain, AI, IoT, and data analytics across a variety of technology sectors.
Nonetheless, India's startup population will have surpassed 100,000 by 2025, resulting in the creation of over 3.25 million jobs. At the same time, total funding for Indian startups is expected to surpass $150 billion, with total value creation exceeding $500 billion. Once the pandemic's medium and long term effects have subsided, there will be no stopping Indian startups.