India Growth in Tech Startup
Innovation is the mother of success. Had humans not innovated, had they not created the wheel, used fire, they would probably have still been living in the jungles as just an advanced ape. But that was not the last innovation, nor the last progress in the history of humanity. Innovations have continued. Electric bulb, generator, al, are innovations that fostered human growth.
The need for innovation and doing something new for growth and economic development is relevant even in modern times; instead, its importance has increased. Startups are one of the leaders in today's innovative world, and as a matter of fact, India is not lagging in this field. India is the third-largest startup ecosystem in the world. In 2019 alone, India had more than 50000 startups with more than 9000 being tech startups. And the whole startup economy is growing at a rate of 12-15%. Let's see some tech startup facts, the growth of this relatively new business in India.
Growth of Digitalization in India
India has seen enormous growth in the penetration of the internet. In 2014, about 233 million internet users in India increased to over 504 million in 2020. The Government's drive for 'Digital India' sector has further propelled the internet's growth, making internet connectivity available in India's interiors. This has helped the real internet-based works in India, including the startups.
The growth of the Digital Economy
Demonetization probably has mixed effects, but it has genuinely fostered the digital economy; using the internet in financial transactions. This has helped the growth of digital startups in the BFSI field. With a high growth rate in this sector, India is witnessing an overall increase in tech startups.
Financial Boost for Tech Startups
Financial assistance is necessary for the growth of all startups. And it is very positive news that this help is becoming increasingly available in India. The Government of India has launched the Mudra Yojana, financial assistance scheme for assisting startups and micro business. The Government has also started competitions to award top startups a considerable sum of money, which will motivate people to create startups.
Corporate financing in the startup field has also increased tremendously. Many young entrepreneurs are creating fantastic business ideas and are finding out venture capitalists to fund their business. Statistics show that this trend and the capital raised both are on the increasing side. With the start of COVID19 and the disruption of the offline world, the online world has gathered more confidence amongst people. Combining these factors, the funding in startups saw a growth of 29% in 2019 to 42% in 2020.
As per the Government's estimates, tech startups are projected to grow at an annual rate of 40-45% per year in the next few years. Some startups are expected to grow high and become 'Unicorns' that is startups turning into a big business. So we can say that the situation of tech startups in India is in an overall positive mood.
Government's target of 'Make in India'
Because of political and economic reasons, the Government has jumped aggressively for 'Atmanirbhar Bharat'. It is essential for the nation's macro-economic situation and overall growth of the nation's economy, creating jobs and will help boost patriotism and foster national unity. This 'Atmanirbhar' drive is positively enabling tech startups and all other startups. With the banning of Tick-tock and various other apps on the reason of attack on Sovereignty of India through those apps by a foreign power(s), the digital place faced a huge vacancy. As a result, numerous startups came into existence within a few days, and a lot of them started making huge profits. This has boosted the Indian tech startup field in a tremendously positive way. The so-called apps and different gaming apps were banned, and Indian tech entrepreneurs quickly brought alternatives to the market, which generated profits for them and values to the customers and jobs to a lot of people.
Growth of the AI and ML
Scientists predict AI to be the fourth revolution and the second industrial revolution. India was not on the first industrial revolution but has started in time in this second one. The startups of India have also taken heavily along with this field. Various entrepreneurs are venturing out in this field, and many tech startups are contributing to this field. With this positive growth, this field is expected to grow to newer heights soon. Even the COVID pandemic has helped people accept digital, which has further boosted this sector's growth.
To end with, India is going on a positive trajectory in the field of tech startups. However, all is not rosy. There is a further need for infrastructure development, financial assistance, making the taxing system further easier. Also, the legal system is to be made less cumbersome and friendly to business. Financial incentives to startups and instilling the spirit of business in the minds of students is essential. If all these steps are taken, we can expect to see India becoming a leader in tech startups.