India bags third slot in global startup space

October 14, 2015 02:13 am | Updated November 26, 2021 10:23 pm IST - BENGALURU:

After the success in the IT services industries, India has now emerged as the youngest startup nation in the world with over 72 per cent of founders are less than 35 years old. With the presence of more than 4,200 startups, the country has also become the third largest startup base worldwide. By registering a growth of 40 per cent over the last year, India has overtaken Israel to become the third largest startup base after the U.S. and the U.K.

According to a report published by Nasscom in association with research firm Zinnov, around 1,200 tech startups were born in the year 2015, out of which more than 50 per cent focus on e-commerce, consumer services and aggregators business.

“India is the youngest startup nations in the world with around 72 per cent of the founders less than 35 years old, and 50 per cent rise in share of female entrepreneurs in 2015 over 2014,” said Ravi Gururaj, Chairman, Nasscom, Product Council.

Bengaluru remains the hot destination for entrepreneurs to launch their business and was ranked 15 globally. More than 65 per cent of the startups are located in Bengaluru, Mumbai and NCR. Around 26 per cent of India’s start-ups are located in Bengaluru; and NCR and Mumbai had 23 and 17 per cent respectively.

Another reason cited for the growth of the entrepreneur ecosystem is the investment of business tycoons like Ratan Tata and Azim Premji in startups. So far, Mr. Tata has made around 10 investments in startups.

Large Indian enterprises have also formed dedicated corpus to invest in startups. Wipro has set up $100 million VC fund to invest in startups while Infosys has formed a $500 million innovation fund, of which $250 million is dedicated for India.

The report published by Nasscom also reveals many interesting numbers in terms of the activities happening in the Indian startup environment. As per the report, one of the major reasons for India’s growth in the new age business is the rapid increase in the availability of risk capital.

In 2015, Indian startup founders have managed to raise capital to the tune of around $4.9 billion, an increase of over 125 per cent against last year. This is also much higher compared to cumulative funding of approximately $3.2 billion over 2010-14 period.

While the overall VC/PE funding has grown by 2.2 times the seed stage funding has grown by 6.5 times. More than 390 startups have received funding compared to 175 startups in 2014, stated the report ‘StartUp India Momentous rise of the Indian Start-up Ecosystem’.

“The maturing Indian startup ecosystem is now contributing to the Indian economy in many ways. Apart from positively impacting the lifestyles of citizens involved, start-ups are now creating innovative technology solutions that are addressing the key social problems that India is facing and creating significant growth opportunities for every stakeholder,” said R. Chandrashekhar, President, Nasscom.

Some of the major rounds of funding this year was $700 million by Flipkart from Tiger Global and Steadview Capital, Snapdeal’s $500 million round from Alibaba Group, SoftBank, Foxconn among others and Paytm $635 million.

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