The Indian startup ecosystem underwent a massive revolutionary pivot in this decade. Buzzwords like “funding”, “startups”, and “equity” became the new dinner table conversations. The number of Indian startups grew exponentially at a CAGR of 10%. In fact, 2021 was named “Year of the Unicorn” by Economic Times as India bid farewell to the year by bagging 44 new unicorns. Nineteen more startups were yielded till September 2022. Most of them operated in Fintech, Healthcare, SaaS, and e-commerce domains. As of July 2022, there were over 71 thousand startups from over 640 districts, and the trend is only growing.
Insights into the Indian startup revolution
We witnessed something exceptional in the Indian startup revolution. This time, the ordinary youth from tier-2 and tier-3 cities have participated in the startup culture more than large corporates or fancy B-school alums. Regarding the same observation, the CEO of OYO Rooms, Ritesh Agarwal, said, “Small towns will write the next chapter of India’s startup story”. Many budding entrepreneurs have relinquished their promising corporate jobs to embark on their startup journey with a mouthful of risk appetite.
The disruption brought by this startup culture created a domino effect by influencing the financial markets and changing the way people look at Equities and Startup Funding. TV shows like Shark Tank enhanced the awareness of startup technicalities amongst citizens and, more importantly, sparked an enthusiasm for investing.
How did India achieve the milestone?
As per the government, the Indian startup statistics rose from 726 recognized startups in 2016-17 to more than 65,000 recognized startups in 2022. Small changes over time add up to create a butterfly effect. A similar phenomenon happened in the transformation of a low-income country to the third-largest startup ecosystem in the world. The rational explanation for such a rapid rise can be the following reasons:
- Increased quality education opened doors of opportunity for youth to unlock their potential and experiment with their ideas.
- A paradigm shift to digitization and cheap internet led to access to resources regardless of financial status.
- New funding avenues like NBFCs and venture capital firms eclipsed the banks that were earlier the only source of working capital.
Apart from this, homegrown Indian brands offering products and services in Ayurveda and Yoga Wellness became another determinant in giving India due recognition. In a nutshell, Indian startups have not only driven innovations but have also pioneered countless concepts, from UPI to IT consulting. The core mantra of building a business is simply to solve an existing problem to monetize it, and the entire Indian startup ecosystem seems to be functioning under that philosophy.