One of the major thrusts of the Narendra Modi government since it came to power in 2014 was to boost entrepreneurship capabilities among Indians, which it believed would go a long way in generating jobs and making the country financially ‘aatmanirbhar’. To this end, the Centre on January 16, 2016, launched the ‘Startup India’ initiative to develop a vibrant eco-system that nurtures innovation.
The initiative has been a roaring success, with 72,993 start-ups being recognised in six years, which have created over 7.5 lakh direct jobs. The number of recognised start-ups has been growing rapidly with each passing year – from a mere 417 in 2016 to 20,160 in 2021. Another 12,341 start-ups have been recognised this year till June 30, and the total number is expected to surpass that of 2020 by this year-end.
Among states, Maharashtra has the highest number of start-ups (13,519), followed by Karnataka (8,881) and Delhi (8,636). Metros such as Mumbai, Pune, Bengaluru and Delhi-NCR remain favourites among budding entrepreneurs for the investment-friendly infrastructure they provide. However, Tier-II and III cities are also gradually gaining currency, and nearly half of India’s total start-ups are in these places.
The country is also home to 105 unicorns with a total valuation of $338.50 bn – 63 of them were born since last year. In fact, one out of every 10 unicorns in the world are from India. Unicorns (firms with over $1 bn valuation) that offered IPO to expand their growth include Zomato, Nykaa, PolicyBazaar and Paytm.
Bengaluru is India’s unicorn capital with 39 firms, followed by Delhi-NCR (32) and Mumbai (16). Bengaluru also ranks among the top 10 unicorn hubs in the world. While traditional sectors such as e-commerce, fintech, supply and logistics, and Internet software dominate the unicorn list, unconventional sectors such as gaming, hospitality, cryptocurrency and data analytics are also making their place.
Also, four Indian start-ups – Flipkart, BYJU’s, Nykaa and Swiggy – are now decacorns (over $10 bn valuation). The total number of decacorns globally is 47.
India is the world’s third largest ecosystem for start-ups and ranks second in innovation quality, according to Invest India. Start-ups cover 56 diverse sectors in the country, mostly in IT services (13 per cent), healthcare (9 per cent) and education (7 per cent). In the last seven years, the start-up ecosystem has registered 15 times increase in funding and 9 times increase in the number of investors.
Work-from-home during the pandemic, aided by a thriving digital payments ecosystem, large smartphone user base and digital-first business models, has fuelled the growth of digital businesses in India. The Centre has so far allocated Rs 7,260 crore under the ‘Fund of Funds for Startups’ – a major chunk of which went to Maharashtra (Rs 4,007 crore) and Karnataka (Rs 1,701 crore). It has also allocated Rs 360.75 crore under the ‘Startup India Seed Fund Scheme’.
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