India continues to be third-largest start-up ecosystem in the world

Adding over 1,100 start-ups in 2019, India continues to reinforce its position as the third largest start-up ecosystem across the world, taking the total number of tech start-ups to 8900-9300 in the last five years, NASSCOM said here on Tuesday. The IT industry body also said that Indian startup ecosystem is geared up for "10X" growth trajectory by 2025.

"From 2014-2025 the 10 year period that we will see, the Indian startup ecosystem is geared up for 10X growth trajectory over these ten yerars, which is pretty phenomenal. We are expecting by 2025 the total number of unicorns to go up anywhere between 95-105 in India," National Association of Software and Services Companies President Debjani Ghosh said.

Speaking to reporters here, she said NASSCOM expected the cumulative valuation, which in 2014 was around USD 10-20 billion for the startup ecosystem, to go up to anywhere between USD 350-390 billion by 2025. The total number of jobs was expected to go up to million plus by 2025 and indirect jobs, up to 4 million plus, she said.

"When we look at the growth trajectory the Indian startup ecosystem tells a fantastic story. The opportunity for us is to do more and faster with right government and industry support and become 10X plus growth trajectory," she said.

NASSCOM Tuesday launched its report on the Indian Tech Start-up Ecosystem - Leading Tech in the 20s on the sidelines of the of the 16th Anniversary Edition of NASSCOM Product Conclave 2019 here. Sharing details of the report, Ghosh said if one looked at all the parameters across the board, there was strong growth across different parameters in the Indian tech startup ecosystem.

"Net-net it is a very positive story, not just the third largest startup base, but we have seen a very healthy growth across each and every parameter that defines the startup ecosystem," she said, adding that the report looks at tech startups in existence for the last five years.

Bengaluru continues to lead in terms of tech startups, followed by Delhi NCR, NASSCOM officials said, adding that the important thing was that 12-15 per cent of tech startups are coming from emerging cities. Quoting from the report, Ghosh said the number of tech startups in the country last year was in the range of 7,700 to 8,200. This year, 1,100 new startups have been added to it, so the total number of tech startups was in the range of 8,900 to 9,300, she said.

"The funding this year is up to USD 4.4 billion. Last year it was USD 4.2 billion. So we have seen an increase in funding," she said.

Ghosh said NASSCOM had last year mentioned a dip in early stage funding, which was a huge concern, but this time they could see an increase early stage funding, while "we are still struggling in the seed stage funding."

She said there was an increase in deep tech startups, with 18 per cent of the total startups today being deep tech startups.

"While it is a good thing that we are seeing 50 per cent growth in deep tech startups, it is still a very small number and this is where the government has to have an absolutely focused push to ensure that we can grow deep tech companies in India," she said.

Ghosh said Deep tech in India was needed in areas like education, health care and agriculture, where government has to come in and fund these startups rather than waiting for VC. Noting that the total number of unicorns are up to 24 and it was 17 last year, Ghosh said this was till September of this year "So we expect by the time the year closes, around 2-3 more may get added. We have very strong pipeline of 50 soonicorns which are soon to be unicorns and that pipeline is growing pretty robustly Ghosh said there was also an increase in terms of job creation by startups.

Last year, tech startups had created 40,000 direct jobs and about 1.6 lakh indirect jobs. This year it was around 60,000 direct jobs and 1.3 to 1.8 lakh indirect jobs. NASSCOM said the trend over the year was that start-ups are driving focus more towards the B2B space and almost half the country's start-ups are offering enterprise focused services. Almost 1,900 plus startups are now setting up in global markets. So it is no more only about set up in India and build for India, they are building a global presence,officials said.

To a question on challenges, Ghosh said access to market and funds continue to remain a challenge.

"We have seen improvement, it is not like nothing is happening, we are absolutely seeing improvements, but in these two areas you need more structured interventions rather than incremental progress that we are seeing today. This is where government has to play a very critical role especially as we move to deep tech in areas like education and agriculture," she said.