Over the last few years, India’s startup ecosystem has evolved at an astonishing pace. Today, India is home to nearly 40,000 startups, making it the third-largest startup ecosystem in the world. With the second-largest consumer internet market and a growing domestic market, India has been successful in creating an environment conducive for starting a new business.
The overall scenario of the Indian market has led to a significant increase in the number of unicorns (valuation of US $ 1 billion or more). In 2021 alone, 24 Indian startups entered the unicorn club as of 3 September. Recently, a few startups also made a stellar stock market debut with well-performing Initial Public Offerings (IPO). And if experts are to be believed, the coming year will see many more startups going public, which is good news for the Indian startup ecosystem.
Undoubtedly, technology has been the key factor in propelling the startup ecosystem. The fintech, consumer, technology and services sectors have not only dominated the Indian startup scene, but they also accounted for 75% of the total venture capital funding in 2020. Online fantasy sports are also gaining ground, and as per a report by NITI Aayog, India will soon become the hub of online fantasy sports. The report further suggests that the sector has the potential to attract FDI of more than INR 10,000 crore over the next few years, as well as generate 1.5 billion online transactions by 2023.
CII, to support the fast-evolving startup ecosystem, launched the CII Future Business Group (CII FBG) initiative and its 10th Centre of Excellence for Innovation, Entrepreneurship and Startups in 2020 (supported by the Government of Telangana and Pratiksha).
The Centre leverages corporate partnership in development and growth of India’s startup ecosystem by providing end-to-end support at a single platform, with an aim to transform business ideas into successful ventures impacting social and economic development through employment generation and wealth creation.
The CII FBG has been constituted to support the emergence of new-age businesses, attract global investment in new businesses in India and foster government-industry cooperation to help develop new policies to support innovative businesses. CII also launched the ‘Global Unicorn Series’ in partnership with SoftBank India, which saw several unicorns from India, the USA, EU, Japan, Australia, Singapore, Israel and South Korea come forward to share their journey.
In the recently concluded CII Annual Meeting 2021, leading startup entrepreneurs took part in the plenary session for a conversation on making India a unicorn hub. During the session, they highlighted the need to build unique startup models serving the interests of Indian consumers. The entrepreneurs pointed out that learnings from the leading startup models must be deployed, rather than replicating them. New debt models, spreading out investments into multifarious sectors rather than certain sectors getting it all, diminishing the digital divide, creating new investment opportunities, supporting the startups in the early stages (incubation period), and introducing a new-age tax system were some of the considerations highlighted by the entrepreneurs.
Various benefits offered under the Startup India initiative by the Government including self-compliance under environmental and labour laws, up to 80% rebate in filing patents, income tax exemption, easier public procurement norms and easy winding up of companies, among others, are also propelling the startup ecosystem.
With 63 tech startups having a valuation of over US $ 1 billion, India is expected to be home to 100 unicorns by 2023. The change in the overall investment scenario can just be gauged from the fact that Indian startups drew a funding of US $ 6.5 billion in the second quarter of 2021.
The meteoric shift in Indian consumer behaviour, rapid digital advancements and the aspiration to be a part of the new shared economy model has made India the epicentre of opportunities in the world and will surely turn the country into a global unicorn hub.