The Indian startup ecosystem has reached an inflection point, with 800 new tech startups sprouting in a year. This, taken in conjunction with rising investment flows, makes it the world’s fastest growing startup ecosystem, says the National Association of Software and Service Companies (Nasscom).
This was announced at the ongoing Nasscom Product Conclave in Bangalore. Nasscom conducted the study in collaboration with global research firm Zinnov, which benchmarked the Indian ecosystem with eight leading areas, in terms of both deal flow and emergence of new startups. We should point out here, however, that there can be different interpretations of what constitutes a startup, and the average valuation of a tech startup in India is relatively low.
The Nasscom study, in its benchmarking exercise, expects the number of startups in India to grow from the current level of 3,100 to 11,500 by 2020. And what’s emerging is a youthful, tech-savvy entrepreneur community: the average age of startup founders is 32, with three-quarters of them being below 36. Nearly two-thirds of the founders come from a multi-national tech company background, while 13 percent of them have started out as entrepreneurs from the very outset. More than half the founders are post-graduates. Bangalore remains the leading startup hub, with more than a quarter of the country’s startups based there, followed by Delhi.
Rajat Tandon, who heads Nasscom’s 10,000 Startups program, admits that only one out of 17 founders are women, but the number is rising. Nasscom has started a Girls in Tech initiative in collaboration with Google to address the imbalance.
Not everything is hunky-dory. The report places India at the bottom of a list of eight startup ecosystems, taking into account the overall business environment. The new Narendra Modi government has improved sentiments, but there is still little evidence of hurdles being removed for startups. “We need supportive government policies in terms of ease of doing business, tax incentives, participation in government contracts, and availability of risk capital,” says R Chandrashekhar, Nasscom president.
Sunil Rao of Google India points out that government tenders stipulate a six-year track record from bidders. In effect, startups are excluded from government business in India.
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India is now the world’s fastest growing startup scene with 800 new startups a year, says report
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