Source: The Economic Times, Oct 27, 2016
New Delhi: Despite a funding slowdown this year compared to last year’s bonanza, as many as 1,400 startups have come up in the country this year, allowing India to maintain its position as the third largest startup base in the world with over 4,750 tech startups, ahead of countries such as China and Israel, the startup report released at the Nasscom Product Conclave on Wednesday revealed.
Even the number of startups that have been funded this year has increased by 8%, though the overall funding has come down by 20-30%.
“One of the reasons for the funding to have come down could be that investors are funding in tranches based on milestones. But it’s a very positive sign that more startups are getting funded,“ said Ravi Gururaj, chairman, Nasscom Product Council.
Sharad Sharma, founder of software think tank iSPIRT, pointed at the strengthening startup density in Bengaluru, Pune, Chennai, NCR, Mumbai and Hyderabad over the last few years. “Since 2014, India has had 3.2 times more startups than Israel which is a shining example of the hi-tech industry,“ he said.
The Indian government’s backing of the startup ecosystem was one of the talking points at the event.“The government has a really fantastic approach here. They go to the absolute bottom of the stack and have been building the core foundational infrastructure and have created a regulatory and legislative framework that is very supportive and conducive to innovation,“ said Chamath Palihapitiya, co-founder of Silicon Valley-based venture fund Social+Capital.
The report also highlighted the emergence of tier-II and tier-III cities in the startup ecosystem, with 66% of the new incubators set up in the smaller cities.
“I had gone to Udaipur for a wedding, and a local entrepreneur invited me to an incubator with 200 entrepreneurs working there. We are hearing the same stories from cities such as Bhubaneshwar, Indore and other cities,“ said CP Gurnani, Nasscom chairman.
Sectors such as fintech, healthtech, edtech were touted as the next big sectors in the report. More than 70 startups have come up in the fintech domain this year, 100+ in healthtech and 40+ in the education technology space.
Navakanta Bhat, professor at the IISc’s electrical communication engineering department and co-founder of Pathshodh, a portable diagnostics devices startup, was also positive about the government’s role.
“The key takeaway is that there is sensitivity from both sides -industry and academia. They were two worlds before. Now, the ecosystem, especially through right government intervention, has made it possible to have this transformation.“