Indian Startups 2021 | Indian Start-up Ecosystem

Indian Startup Ecosystem: Historic Rise Of Unicorns In India

5 Min Read |  April 19, 2021

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As quoted in the Financial Express (according to Nasscom Tech Startup Report 2021), ‘India is home to 38 unicorns - startups with a valuation of over USD 1 billion.’ 

An even more striking fact that came to light after revelations done through Economic Survey 2020-21 was that even during the pandemic in 2020 a total of 12 start-ups made their entry into the Indian unicorn club. 

We have come so far, but how did it all start? 

How many startups are there in India? 

How is the start-up ecosystem of India? 

How did it grow and where are most start-ups located in India? 

Find answers to all these questions and much more by reading ahead!

Tracing the Beginning of the Indian Startup Industry

It is rightly said, ‘ Necessity is the mother of all inventions.’ Akin is the case of Indian start-ups. 

The 2008 economic crisis hit the entire world so severely that many companies had to shut the door and bid adieu to their employees. With no jobs, many professionals had to look for other sources to make a living. Well, the time proved apt for the evolution and growth of several start-ups such as Zomato, BigBasket, etc that were founded during that time period of economic downturn. 

As time passed, other start-ups joined the bandwagon and the surge in the number of start-ups was fueled by the good performance of stock markets, positive acceptance of public offerings and increasing availability of venture capital firms. 

Reasons For Growth Of Start-ups In India

Gone are the days when India was considered to be a difficult spot to initiate any kind of business venture. In fact, it was after 2005 that most startups joined the unicorn club in India. 

But, what could be the rationale behind this growth? 

Let us find out! 

  1. Relatively low capital needed to launch a new business

  2. Necessary boost coming from the government in the past decade 

  3. Surging digitization and increased internet penetration paired with technological progress.

  4. Availability of right and accessible funding paths like venture capitals, angel investors, seed funding, etc. 

  5.     Lastly, the mix of talented individuals who are ready to take risks. 

A Glance At The Indian Startup Ecosystem

A positive growth trajectory of the startup ecosystem acts as a catalyst of socio-economic development in any country and India has benefited from it. 

With cities like Bengaluru, Delhi and Mumbai, India in recent years have marked their presence in the global startup ecosystem. As a result of this global investors and venture capital firms are turning their focus towards us. 

Well, let us see what the statistics say! 

Top Startup Hubs In India (As of June 2020) 

1) Bengaluru

2) Delhi NCR

3) Mumbai 

Battle For Biggest Start-up Hub In India (2014 - June 2020) 


Nations With Most Number Of Unicorns (As of June 2020) 

Economic Survey (2020-21): Major Highlights About Startup Industry Of India 

The Economic Survey of India 2020-21 released some striking facts about the start-up industry of India and major highlights from the same are: 

  1. Despite Covid-19, the Indian startup industry depicted good progress and a total of 12 start-ups entered the Unicorn club in 2020. 

  2. As of December 2020, 42,061 start-ups employ more than 4.7 lakh people in India 

  3. During last year, a Fund of Fund for Startups (FFS) was set up for aiding the start-ups. 

  4. SIDBI has given around Rs 4,327 crores to 60 Alternative Investment Funds (AIFs) 

  5. As of November 2020, 319 startups were sanctioned with income tax exemptions by the government. 

When History Got Created By Indian Unicorns 

The month of April 2021 calls for a celebration for the Indian startup industry. 

You must be wondering why? 

Well, between April 5 to April 9, i.e, in the span of just 4 days a total of 6 Indian startups set their foot into the unicorn club. To find out quick details about these 6 startups have a look at the following chart. 

All these 6 startups crossed the bar of $1 billion valuations in just 4 days. Where in 2020 a total of 11 startups gained the unicorns title then in just the first 4 months of 2021, a total of 10 startups have become unicorns. 

Conclusion 

The push to the entire ecosystem of a start-up in India is also credited to flooding investments from Tiger Global, an investment firm. The kind of aggressive investments it has been making in early-stage startups of India has definitely been a supporting factor!

If we talk about just the first four months of 2021, then Tiger Global has finalised around 25 deals with various Indian startups. Interestingly, the New York-headquartered investment fund recently poured funds into ShareChat, Grow and Gupshup which are 3 of the recent additions to the Indian unicorn club.

The growing digitization and government’s aid in form of campaigns like ‘Start-up India’ is likely to amplify the game of Indian startups in the coming future. 

Kudos to all the Indian startups! 



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