Union Minister Jitendra Singh on Friday said India ranks third internationally in the start-up ecosystem and the number of unicorns, highlighting the revolutionary developments in science, technology, and creativity in the country.
Attending an event in Delhi, Singh said the decade 2021-2030 will bring transformative improvements to Indian science, technology, and innovation. He added that India’s Gross Expenditure on Research and Development (GERD) has more than tripled in the last few years.
According to the most recent data, there are currently 105 unicorns, 44 of which were born in 2021 and 19 in the current year. Data also showed that the country has over 5 lakh R&D workers, a figure that has increased by 40-50% in the last eight years.
While explaining the current scenario, the Union Minister further said: “With the shifting global powers and technology becoming the epicentre of international engagements and rulemaking, India under Prime Minister Narendra Modi is living up to global benchmarks.”
Singh also referred to the fact that 75,000 start-ups are now based in India, as the country celebrates 75 years of Independence, since PM Modi introduced Startup India in 2015.
Continuing on that note, the Union Minister said that the PM’s specific emphasis on science, technology and innovation has sparked the creativity of the country’s youth to develop and solve problems with fresh ideas.
He said start-ups in India are not limited to metros or large cities, adding that tier 2 and tier 3 cities account for 49% of all start-ups, which are blooming in domains such as IT, agriculture, aviation, education, energy, health and space.
Singh also pointed out the fact that the country is ranked among the top 5 in the world for scientific research, is one of the top five nations for space exploration and is actively involved in developing technologies such as quantum technologies and artificial intelligence among others.
As per the Union Minister, the country has also increased its global rating on the Global Innovation Index (GII) from 81st in 2015 to 46th in 2021 among 130 economies worldwide.
According to data available in the Startup India portal between January 2016 and December 2020, the Department for Promotion of Industry and Internal Trade has recognized over 41,000 start-ups in India.
There are more than 590 districts with at least one recognized start-up and 30 states as well as UTs have a dedicated start-up policy.
During the same time frame, start-ups have also reported more than 4 lakh jobs.
The data also highlighted that more than Rs 4,500 crore of investments were made in 384 start-ups through the Fund of Funds scheme and 319 eligible start-ups have been granted an exemption under 80-IAC of the Income Tax Act.
According to Vineet Budki, Managing Partner & CEO, Cypher Capital, while the start-up ecosystem was initially driven by Indian founders coming back to the country from abroad to set up such companies, now the innovation engine has changed. “We are seeing start-ups emerging from all across the country from local founders as well. Tier-2 and Tier-3 cities have also become a hub of start-ups lately,” he said.
“In the next few months, the global macro conditions might be tough in fund-raising, but they are perfect times to build start-ups. And times like this separate the strong resilient founders who innovate, from the ones who are just in it to grab the opportunity,” Budki added.
About this ecosystem, Satish Shukla, co-founder of Addverb Technologies, told News18: “For the past few years, there has been an influx of excessive funding, VC and other types of funding. Profitability is not being considered as a key metric.”
“There has been a gush of liquidity in various sectors. It might be due to the fear of missing out or because there are various ideas in any particular sector. Also, many people are becoming entrepreneurs after considerable work experience and are setting up mature practices and processes,” he added.
Meanwhile, Anuj Parekh, co-founder and CEO at HealthySure, said despite the fact that investors are focusing more on fundamentals, which has resulted in a slowdown in funding for growth and mature-stage start-ups, the sentiment for early-stage and early-growth companies is highly optimistic till series B.
While explaining, Parekh said: “The world saw the emergence of truly revolutionary start-ups post the previous 2008 financial crisis from developed economies. Only in times of uncertainties, the world has truly witnessed some game-changing companies. Airbnb, Uber are some great examples.”
“The world is going through a similar transition post the pandemic and looking at the early-stage funding in India, there are bound to be such gems that are truly revolutionary to the entire world,” he noted.
Additionally, Parekh stated that India already leads the globe in fintech and ed-tech, and he believes that it will not be shocking if Indian start-ups truly transform other areas in the coming years.
Unicorns of India
According to a recent analysis by investment firm Iron Pillar, India is predicted to produce more than 250 unicorns, or privately held firms with a $1 billion valuation or higher, by 2025.
Similarly, another analysis by Hurun Research Institute has predicted that India will be the home to 122 new unicorns in the next two-four years and they would belong to 25 cities across the country.
As per the data, as of July 19 this year, India has 105 unicorns — a start-up valued at over $1 billion in valuation — with a total valuation of $338.50 billion.
While talking about Unicorns, Budki said that some of the unicorns like Ola and Lenskart are expanding globally and also experimenting with new ideas, while some other unicorns are still struggling to grow and get to profitability.
He further noted that the production of unicorns in India improves the confidence of young entrepreneurs and it also gives them the necessary mentoring from successful founders.
“We have seen this happening in Silicon Valley where old founders groom the new ones and we will see the same happening in India as well. Cities like Bangalore have already become a hub for founders and soon it will spread across more cities,” Budki added.
Parekh said that unicorns not only benefit start-ups but also help to build a robust business, as well as technology environment and there are favourable tailwinds to promote high-skilled employment prospects.
“I personally hope that this stops the brain drain. Allied industries also get more mature that includes manufacturing along with services. Unicorns are also now seen as a status symbol to attract even larger investments,” he stated.
According to him, the more important fact is that along with creating for the Indian economy, the solutions that these start-ups are promoting are exported to the entire world.
Shukla believes that there will be considerable focus on the B2B sector and with the coming of 5G, there will be a quest for industrial automation and software focus. Additionally, according to him, there will be maturity in the system because of the experience of entrepreneurs.
While talking about unicorns, the industry expert also said: “There is a journey entrepreneurs follow. First, they are entrepreneurs, then they start investing in other start-ups so they become VCs. This will generate highly skilled employment and stable job creation.”
However, according to him: “It won’t be enough to just be a unicorn; the main focus will be profitability.”