Investments in Indian start-ups witnessed 5 per cent increase year-on-year during the January-September 2019 period, said a report by National Association of Software and Services Companies (Nasscom), commissioned by consulting firm Zinnov. The investments were pegged at $4.5 billion across 450 start-ups, the report said.
According to the report, released on the sidelines of the 16th-anniversary edition of Nasscom Product Conclave 2019, more than 1,300 start-ups were added to the ecosystem this year, taking the total number to 9,300. The total valuation of Indian start-ups stood at $95-101 billion, which have created a total of 3,90,000-4,30,000 direct jobs; over 60,000 jobs were created in 2019 alone.
There was 70 per cent YoY spike in funding at the early stages (Series A and B), at $1.6 billion. A total of seven Unicorns (start-ups with a valuation of over $1 billion) were added till August this year, taking their number to 24, which is the third-highest number of Unicorns in a single country in the world, the report added.
The new companies that were added to the Unicorn list were from sectors such as gaming, Supply Chain Management & logistics, and automotive. “There are also over 50 potential Unicorns in the country at present that have received cumulative funding of more than $50 million. Their pool grew more than three times over last year, with 35 new additions in 2019,” the report said.
Start-ups, according to the Nasscom research, were driven more towards the areas of B2B space, and nearly half of them are offering services to enterprises. Around 43 per cent of the current start-ups are in the B2B segment, 18 per cent are leveraging deep-tech, whereas 21 per cent are focused on global markets.
Nearly 480 start-ups, which also include more than 20 Unicorns, have registered overseas with their R&D in India. There are currently 335 active incubators and accelerators across the country and more than half of them are operational beyond tier-1 cities, the report observed.
“The start-up landscape in the country is becoming the epitome of innovation, with companies bringing out solutions that are aimed at solving locally relevant issues. However, to simulate innovation, the government and corporates need to focus on increasing their role as prominent stakeholders, playing the part of venture capitalists and providing the appropriate market access, funding and guidance to seed-stage start-ups, ” said Debjani Ghosh, president, Nasscom.
Enhanced digital infrastructure and wider internet penetration have enabled a lot of start-ups to foray into the deep tech space. Since 2014, such start-ups have grown at a CAGR of 40 per cent to 1,600 such firms in 2019.
Entrepreneurs are now focusing on creating solutions using deep-tech such as artificial intelligence, analytics, augmented reality/virtual reality, blockchain and internet of things, among others,” the study pointed out.