The Indian startup ecosystem has undergone a dramatic transformation since the launch of the Startup India initiative in 2016. It started with some 400 startups and now is a thriving community of more than 158,000 startups. The growth reflects changing mindset that entrepreneurship is being considered as a key driver of economic development. India is gradually shifting from a nation of job seekers to job creators.
One of the notable changes is the increase in funding for the startups. The total funding was just $8 billion in 2016, but now it has surged to $155 billion. The spike shows that investors are recognizing the potential in India’s startup scene. Moreover, nearly half of the startups are emerging from Tier II and III cities.
The growth of unicorns is another strong indicator of the startup ecosystem success. India now boasts 118 unicorns compared to only eight in 2016. The surge is about numbers as well as about the depth and maturity of the startup culture in the country.
Policymakers deserve credit for the progress and especially with initiatives like the removal of angel tax. The Fund of Funds for Startups (FFS) is playing a crucial role since 2016 by making easier for startups to access capital.
The numbers are promising, but there is still work to be done. The efforts of India to boost manufacturing incubators and encourage large corporates to collaborate with startups are some of the notable steps in the right direction.
The Indian startup ecosystem is showing signs of great promise lately equipped with impressive funding, growing number of unicorns and broadening reach across the country.
