India retains its position as world’s third largest startup base

CHENNAI: India continues to harbour the third largest startup base, marginally behind the UK, according to the Nasscom-Zinnov startup report titled “Indian Startup Ecosystem Maturing – 2016.”
The report states that the ecosystem is poised to grow by 2.2X to reach more than 10,500 startups by 2020.
The report was released on the sidelines of Nasscom Product Conclave 2016 in Bengaluru on Wednesday in the presence of C P Gurnani, chairman, Nasscom, R.Chandrashekhar, president, Nasscom, Ravi Gururaj, chairman, Nasscom Product Council, and Pari Natarajan, CEO, Zinnov.
The report predicts continued growth in the number of startups in 2016, with Bengaluru, NCR, and Mumbai continuing to lead as the major startup hub for the nation.
In terms of vertical growth, investors are looking at domain like Healthtech, Fintech, and Edutech. With a total funding of approximately $4 billion, close to 650 startups were funded signifying an aware and healthy growth of the ecosystem.
R Chandrashekhar, president, Nasscom, said, “Technology startups are creating a new identity for India and its technological prowess. They are defining the way the world operates making life better and easier for people and businesses alike. Our startup report is a testimony to the potential of the startup landscape and the scope of growth and opportunity that India presents. Nasscom has always been working towards creating a heterogeneous bond between all stakeholders and craft a conducive and innovative environment for start-ups to grow.”
According to the report, the number of tech startups in India is expected to grow by 10-12% to over 4,750 startups by the end of 2016. Interestingly, over 1,400 new startups emerged in 2016 denoting that that the ecosystem is becoming prudent with both investors and startup founders focusing on profitability and optimising the overall spend. With this impetus, India will become home to over 10,500 startups by 2020, employing over 210,000 people reveals the report.
Furthermore, incubators and accelerators are playing a substantial role in strengthening the startup community throughout India. The report highlights the significant rise in number of accelerators to improve startups’ outcomes and provide them with a support that they require.
With impetus from the government and corporates, there is a 40% increase in the number of active incubators and accelerators in 2016 with over 140 active incubators, helping entrepreneurs experiment with new ideas by offering them functional expertise and resources.
Over 30 new academic incubators have been established under the government’s ‘Startup India Standup India’ initiative this year. With the country showing signs of increased interest in entrepreneurship, Tier-II/III cities have established 66% of the new incubators.
The report reveals an increased interest from student entrepreneurs this year. Growth of 25% has been witnessed in 2016 with over 350 startups founded by young students. Median age of startup founders has reduced marginally from 32 years in 2015 to 31 years in 2016.
Talking about investments, the report states that investors are increasingly looking at opportunities in startups in areas other than online retailing. The sentiments are high for ventures in verticals like Fintech, Healthtech, Edutech, data analytics, B2B commerce and artificial intelligence.