India Adds Over 1,100 Startups In 2019, Continues To Be Third Largest Ecosystem In The World

Startups are growing but access to market and funds continue to remains a challenge.
Employees of a startup work in front of computer screens. (Photographer: Akio Kon/Bloomberg)
Employees of a startup work in front of computer screens. (Photographer: Akio Kon/Bloomberg)

Adding over 1,100 startups in 2019, India continues to reinforce its position as the third largest startup ecosystem across the world, taking the total number of tech startups to 8,900-9,300 in the last five years, Nasscom said in Bengaluru on Tuesday.

The information technology industry body also said that Indian startup ecosystem is geared to grow 10 times by 2025.

"From 2014-2025 the 10 year period that we will see, the Indian startup ecosystem is geared up for 10x growth trajectory over these 10 years, which is pretty phenomenal,” Nasscom President Debjani Ghosh said.

“We are expecting by 2025 the total number of unicorns to go up anywhere between 95-105 in India," she added.

Speaking to reporters in Bengaluru, she said Nasscom expected the cumulative valuation, which in 2014 was around $10-20 billion for the startup ecosystem, to go up to anywhere between $350-390 billion by 2025.

The total number of jobs was expected to go up to million plus by 2025 and indirect jobs, up to 4 million plus,she said.

"When we look at the growth trajectory the Indian startup ecosystem tells a fantastic story. The opportunity for us is to do more and faster with right government and industry support and become 10x plus growth trajectory," she said.

Nasscom on Tuesday launched its report on the Indian Tech Startup Ecosystem - Leading Tech in the 20s on the sidelines of the of the 16th Anniversary Edition of Nasscom Product Conclave 2019 in Bengaluru.

Sharing details of the report, Ghosh said if one looked at all the parameters across the board, there was strong growth across different parameters in the Indian tech startup ecosystem.

"Net-net it is a very positive story, not just the third largest startup base, but we have seen a very healthy growth across each and every parameter that defines the startup ecosystem," she said, adding that the report looks at tech startups in existence for the last five years.

Bengaluru continues to lead in terms of tech startups, followed by Delhi-National Capital Region, Nasscom officials said, adding that the important thing was that 12-15 percent of tech startups are coming from emerging cities.

Quoting from the report, Ghosh said the number of tech startups in the country last year was in the range of 7,700 to 8,200.

This year, 1,100 new startups have been added to it, so the total number of tech startups was in the range of 8,900 to 9,300, she said.

"The funding this year is up to $4.4 billion. Last year it was $4.2 billion. So we have seen an increase in funding," she said,

Ghosh said Nasscom had last year mentioned a dip in early stage funding, which was a huge concern, but this time they could see an increase early stage funding, while "we are still struggling in the seed stage funding." She said there was an increase in deep tech startups, with 18 percent of the total startups today being deep tech startups.

"While it is a good thing that we are seeing 50 percent growth in deep tech startups, it is still a very small number and this is where the government has to have an absolutely focused push to ensure that we can grow deep tech companies in India," she said.

Ghosh said Deep tech in India was needed in areas like education, health care and agriculture, where government has to come in and fund these startups rather than waiting for venture capital.

Noting that the total number of unicorns are up to 24 and it was 17 last year, Ghosh said this was till September of this year

"So we expect by the time the year closes, around 2-3 more may get added.

We have very strong pipeline of 50 ‘soonicorns’ which are soon to be unicorns and that pipeline is growing pretty robustly, Ghosh said.

He added there was also an increase in terms of job creation by startups. Last year, tech startups had created 40,000 direct jobs and about 1.6 lakh indirect jobs. This year it was around 60,000 direct jobs and 1.3 to 1.8 lakh indirect jobs.

Nasscom said the trend over the year was that startups are driving focus more towards the business-to-business space and almost half the country's startups are offering enterprise focused services.

Almost 1,900 plus startups are now setting up in global markets. So, it is no more only about set up in India and build for India, they are building a global presence, officials said.

To a question on challenges, Ghosh said access to market and funds continue to remain a challenge.

"We have seen improvement, it is not like nothing is happening, we are absolutely seeing improvements, but in these two areas you need more structured interventions rather than incremental progress that we are seeing today.”

This is where government has to play a very critical role especially as we move to deep tech in areas like education and agriculture," she said.

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