Current Affairs 2022 : NASSCOM's Report on Startups in India

By Ankita Rawat

Startup ecosystem is growing in India. Recently, NASSCOM’s conducted a study on Startups in India. Read here in detail about the key finding of NASCOMM's repost on Startups in India.

NASSCOM has conducted a report in collaboration with research firm Zinnov, indicating that the start-up ecosystem has seen a double gain in cumulative valuation from 2020 to 2021, by an estimate of $320- $330 billion, showing the sector’s development and recovery throughout the pandemic.

The report titled ‘Indian Tech Start-up Ecosystem: Year of The Titans’ states that rising startups leverage deep-tech, investor confidence, Indian tech startup base continues to witness steady growth, and tapping unexplored talent pool. According to the report, startups raised US 24.1 Billion in 2021, a 2X growth over pre-COVID levels.

As compared to 2020, there is a triple increase in the number of high-value deals, indicating investor confidence with a lot of active angel investors over 2,400 and readiness to take considerable risks.

Meanwhile, the US remains the top source of foreign direct investment in startups, Worldwide involvement is growing as well. Nearly 50% of the deals have a minimum of one India-domiciled investor.

Further, the report said over USD 6 Billion has been elevated through public markets with 11 startup IPOs in 2021. Earlier, the ecosystem played an important role in expanding direct and indirect job opportunities, offering 6.6 lakh direct jobs and more than 34.1 lakh indirect jobs. Banking, Finance services, and insurance, retail, edtech, retail tech, supply chain management, food tech, logistics, and mobility industries saw the most net new job creation. On the back of freelancers, internet commerce, indirect jobs, and service industries have also recovered, the report said.

NASSCOM President Debjani Ghosh said, “In 2021, the performance of the Indian startup ecosystem has proved the dedication and resilience being put by multiple startups across verticals. The ecosystem has grown tremendously and arranged itself as a vital contributor to the growth of India’s digital economy”.

Outbreak of Unicorns

The year 2021 has shaken up unicorns like never before, this year has seen the evolution of 42 unicorns across 18 sectors, 3rd highest after China and the USA, with a cumulative valuation of newly added unicorns positioned at around $90 billion. The number of potential unicorns extended insanely through 2021 reaching 135, and a 6X increase in global unicorns in comparison with 2015. In micro-verticals like edtech and fintech, the high-value start-ups emerged faster than even in 2021. In terms of investments and maturity, retail, BFSI, enterprise tech, edtech, and retail tech have dominated supreme. BFSI observed a breakout year, 35+ potential unicorns, accounting for 13 unicorn additions, along with 25% of investments in 2021. Automotive, Agritech, industrial, social platforms, manufacturing, and industrial witnessed considerable up-tick according to the report.

Big Corporates Supporting Startups

Last year, more than 260 corporates proactively participated in Indian start-ups, in 2020 the participation was only 170+, thus leveraging several collaboration approaches and models. In 2021, nearly 175+ unique corporates invested in startups with 52% being global MNCs. With every passing year, more corporates are building proper structured open innovation programs, and almost 80+ unique open innovation programs are witnessed in 2021 of which 62% were hosted by global MNCs with R&D centres in India. Corporate continuously registered success stories through structured collaboration programs, Joint Go-To-Market strategies, Co-Innovation, Platform Evangelization, and Vendor agreement/ License, as per the NASSCOM-Zinnov report said.

In the US, China, UK, and Israel, the year 2021 has been an extremely amazing year for the Indian startup ecosystem, with maximum growth rate in terms of deals, both late-stage funding and seed stage, and several startups. Indian companies have done an amazing job of selling into the global market, remarkably in categories like developer ecosystem and global SME. Interestingly, the Indian startups are digitally native that act as a perfect model for digital-native enterprises across the world. The Indian startup ecosystem is just getting started.

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About the Author

  Ankita Rawat is doing graduation in BA(JMC) from JIMS Vasant Kunj, New Delhi.