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In what should come as heartening news for Indians after being placed at No. 142 in the World Bank’s Doing Business ratings, India has been ranked as the third-largest startup ecosystem in the world, behind the USA and UK. The India Startup Report 2014, released at the three day National Association of Software and Services Companies (NASSCOM) Product Conclave 2014 in Bangalore, also says that the country’s startup ecosystem is the fastest-growing in the world.
The following were the key findings of this study:
- More than 800 startups are being set up in the country every year.
- There are nearly 3 100 startups in India at present. Their number is expected to grow to 11 500 by the end of 2020 – a phenomenal increase of 270% within the coming six years!
- The exponential rise in the number of startups will also lead to more employment opportunities. They will employ almost 250 000 people by the end of 2020, as opposed to 75 000 being employed currently. This is an increase of more than 230%.
- There have been more than 70 VC/PE investments in the last five years in the domestic startup ecosystem, with an investment involving more than $2-billion.
- 20 mergers and acquisitions have been carried out over the last three years, with the total worth of deals exceeding $1-billion.
- More than 90% of the startup activity comes from bigger cities like Mumbai, Pune, Bangalore, Delhi-NCR, Chennai and Hyderabad.
“The Indian startup ecosystem is rapidly evolving driven by extremely young, diverse and inclusive entrepreneurial landscape,” said Nasscom President R. Chandrashekhar. “An additional driving force is a four-fold increase in access to capital through VCs, angel investment and seed funding for the Indian entrepreneurs.”
Some of the main factors which have contributed towards this robust growth are:
- A rapid growth in the software product industry in the last few years over the country (and across the globe).
- Availability of capital, and
Speaking on the sidelines of the conclave, Ravi Gururaj, Chairman, NASSCOM Product Council, said “Scaling up, Design and Growth Hacking are the key priority for startups today. On the innovation front, it is imperative to increase collaboration and partnerships for product companies with platform players, IT Services, Global MNCs and CIOs. The conclave this year will showcase interesting technologies that are evangelising the product space and that are poised to become ubiquitous across both the consumer and industrial fabric of our society.”