National Startup Day: Celebrating India’s Thriving Startup Ecosystem and its Economic Impact

You must have heard about the success stories of India’s most successful and valuable startups, including Razorpay, CRED, Pine Labs, OYO, Acko, Swiggy, Dream11, Mobile Premier League (MPL), Livspace, Cars24, Cardekho, and Mobikwik. These companies have not only reshaped industries, raised billions in funding, but also created substantial employment.

As the 3rd largest startup ecosystem in the world, with an expected annual growth rate of 12%-15%, the country’s dynamic startup landscape continues to thrive.

On this National Startup Day, let’s delve into the dynamic startup ecosystem of India, exploring how the rise of unicorns, the influence of platforms like Shark Tank, and government initiatives are accelerating economic growth and innovation.

What is giving Push to Indian Startups?

• Government Initiatives

The Indian government has played a pivotal role in fostering the growth of startups through various initiatives and policies aimed at encouraging entrepreneurship. Startup India, launched in 2016, has been a major driving force, offering a host of benefits such as tax exemptions, easy registration processes, and financial support. As of June 30 2024, DPIIT has recognised 1,40,803 entities as startups. Since the launch of the Startup India initiative in 2016.

• Access to Funding

As per news reports, foreign investments account for approximately 36% of the total investments for startups in the last decade. Venture capital (VC) and private equity (PE) investors have shown increased confidence in Indian startups, especially after the emergence of several unicorns (startups valued at over $1 billion). Additionally, angel investors and accelerators like Shark Tank India have empowered early-stage startups by providing them with capital, mentorship, and exposure.

•  Access to Mentorship and Incubators

IIM Bangalore’s NSRCEL incubator and the Centre for Research on Start-ups and Risk Financing (CREST) at IIT Madras have conducted a study revealing that India is home to over 1,100 active startup incubators. The research, titled India Incubator Kaleidoscope 2024, indicates that the southern part of the country is at the forefront, with 45% of the incubators located in this region. Incubators provide essential resources such as office space, technical support, and business guidance.

List of Indian Startups Achieving Unicorn Status in 2024

A unicorn startup refers to a privately held startup company valued at over $1 billion. Below is a list of startups that have achieved unicorn status in 2024, highlighting the remarkable growth and innovation happening within India’s startup ecosystem.

How Startups are Shaping India’s Economic Future?

From FY16 to FY23, startups contributed 10% to 15% to India’s gross domestic product (GDP) growth, according to KPMG’s whitepaper. Let’s take a look at how these startups have played a pivotal role in driving economic progress during this period.

• Job Creation through Startups

Since the launch of the Startup India Initiative in January 2016, over 1.49 lakh startups have been recognised, making a significant contribution to employment. These startups have collectively created over 16 lakh direct jobs, demonstrating their critical role in the Indian economy.

• Achieving Gender Diversity 

This massive job creation spans multiple industries, from technology to manufacturing, offering diverse opportunities for individuals across the country. With 48% of these startups having at least one woman director, they are also fostering gender diversity in the entrepreneurial space.

• Boosting Regional Development

Startups are not just concentrated in metropolitan areas but are also helping to drive growth in tier 2 and tier 3 cities. Around 50% of startups are based outside the major urban centres, contributing to the decentralisation of economic growth.

• Boost in IT Services, Healthcare Sectors

The growth of startups in the IT services, healthcare and life sciences, and education sectors has driven significant advancements in these industries. As of October 3, 2023, the IT services sector leads the startup ecosystem, accounting for 13% of all startups, followed by healthcare and life sciences at 9%, and education at 7%.

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