Startup EcoSystem

The Indian government has launched the streaming initiative of startup India in 2016 with a purposeful goal to escalate the startup culture in India and form an environment in which people having entrepreneurial capabilities would leave their comfort zone and gear up to become entrepreneurs of the country. Matching pace with the visionary thoughts of our Prime Minister Narendra Modi concerning entrepreneurship, Aatmnirbhar Sena is working on projects that will eventually help in the advancement of the startup ecosystem in India.

In the past few decades, the startup ecosystem in India has evolved well. It all started with a handful of tech-based companies, and now more than thousands of progressive as well as innovative new startup ventures have established themselves in the market. In the current scenario, the number of startups in India is 55,000. Around 3200 startups are engrossed in raising $63 Billion in funding in around the last five and half years alone.

The digital revolution and flourishing internet connectivity have helped paved the way for numerous startups to bloom over the past decade, address unusual and diverse problems, transform entire industries as well as create new segments. Deep data insights to change strategic decision making in investments, governance, advancement, and other vital aspects are driving the startup ecosystem in India.

In recent years, the growth of startups has lured more international investors and boosted their faith in India. The startup ecosystem in India has made its mark in the past five years, from just a handful of decent investors and a few startups to around 55 thousand startups and around 6,000 Indian & International investors. International investors now routinely take a trip down to India in order to invest in the burgeoning tech ecosystem. The rhythm of participation by the present investors is on the rise.

Quick Facts about Startup Ecosystem in India

• Through the Startup India Initiative, the Indian government is promoting a robust startup ecosystem in India.
• India has emerged as the second-largest startup ecosystem all over the world.
• The most beneficiary sectors in the realm of startups are EdTech, online gaming and OTT, Fintech, ecommerce and enterprise tech.  
• The rate at which the startup ecosystem culture in India is attaining growth is between 12 and 15%.
• Around 27% of the total active investors in the Indian market belong to the United States. 
• As of 1 Feb 2020, the Department of the Promotion of Industry & Internal Trade (Commonly known as DPIIT), which belongs to the Ministry of Industry and Commerce, has identified that the number of startups has reached around 27,916 startups.
• As per the sources, the startups in India rose around $11 Bn across 736 deals in 2019, while in 2018, Indian startups had risen over $9.57 billion across 717 deals.
• Every day 2-3 tech startups join the league of startups in India.
• At the current time, more than 55,000 startups are present in India. 
• Around 6000 Indian and International investors are associated with the startups. 
• Around 190 soonicorns are anticipated to become unicorns by 2025.
• Around 95 new technology companies will join the unicorn club by 2025.

Factors that Proves India as a Startup Nation

The leading factors that determine India's potential as a startup nation are-

• Domestic market size
• Cost of doing business
• Proximity to vendors and customers
• According to one of the national surveys, more than 50% of youth prefer to join startups over corporate firms.
• Seven million college students complete their graduation every year in India.
• On a global level, India has achieved the feature of becoming the second-largest consumer internet market.

Startup Ecosystem in India is rapidly Growing

• Through innovative progression and scalable technology, startups are capable of generating impactful solutions, and therefore by act as vehicles for significant transformation and socio-economic development.
• The startup ecosystem in India has grown up dynamically over the previous two decades.
• A few startups were established in the 2000s, but the startup ecosystem in India was still at the premature stage as only a limited number of investors were involved, and the number of support organisations like accelerators & incubators was limited.
• Some successful withdrawals happened in the late 2000s.
• In the last ten years, the number of startups in India has increased rapidly, and support network has become easily available in all dimensions.
• In India, Bangalore has developed as India’s primary startup hub, but a substantial founding movement is also taking place in National Capital Region (NCR) and Mumbai, and some smaller cities.
• Startups are part of a broader business setting.
• The Modi government has made numerous efforts to promote startups and accelerate startup ecosystem in India.
• Most startup architects in India have robust ingrained motivations and report being ridden by their enthusiasm, interest, contentment that comes from problem-solving, and ambition to bring a difference in society.
• Many Indian startup founders have worked in a corporate environment in the past course of time, but despite the stability in such jobs and the advantages of great salaries and other perks, they comprehended those jobs as suppressing their creative potential.
• An absence of identification with a corporate culture leads them to establish something on their own, which facilitates them to specify their values and regulate their own direction.

Key challenges Faced by Indian Startups

Hiring Well-qualified Employees

For most job-seekers, working in a startup is not a desirable career choice because of the inherent risk that the startup business might fail. Rather, the majority prefer to join big corporations, which assure more stable jobs and a low-pressure working environment. Besides this, startups fail to compete with the stature and compensation scales that large firms can deliver. Many employees who initiated their journey with startups switch to well-established companies after working for a few years.

Another significant reason is that several job applicants are not adequately skilled. Startups detect a gap between the knowledge provided to students in schools and colleges and the knowledge required at the workplace, primarily in sectors in which technologies shift takes place at a fast pace. As they have insufficient awareness of industry requirements, fresh college graduates are usually not employable from the beginning. As an effect, when hiring fresh staff, startups have to invest a considerable amount of time as well as the cost to train a new breed of employees. A third aspect is that a notable number of highly qualified professionals move abroad for jobs. Less qualified employees are affecting the smooth functioning of startup ecosystem in India.

Financial Issues

Financial issues are the major issues in establishing and running a startup business. There is a requirement for finance at every step. It's a big issue as people don't have that abundance of personal income which they can invest in their business venture.

In case if they go to banks for acquiring loans, they either give it at an elevated rate of interest or inquire of collateral security, which a major chunk of the population is not able to meet the required standards. Due to the processes entailed as well as the high interest rates in the industry, debt as a funding source is also not a feasible option. Due to financial issues, the startup ecosystem in India undergoes hurdles.

Regulatory and Taxation Issues

There are heaps of government rules & regulations prevailing in our regulatory system which impact startups either directly or indirectly. Sometimes, the startup owner has to make considerable trips to government offices in order to get registered or seek any approval.

Since the startups at a growing stage don't have enormous funds with them, they face difficulty in meeting the taxation bars as they do not reap a massive profit during the initial phase of the business. Therefore, it sets an impediment in the way of setting up a startup business and the progress of the startup ecosystem in India.

Startup Ecosystem in India: Consistent Reinvention

The need to reinvent on a frequent basis and gear up with a service that can match the expectations of the customer are one of the tremendous challenges. Due to the inception of technology & competition, the challenge is to keep reinventing and working on the innovation factor.

Diversity as well as Digital Divide

• In general, there is an existence of information gap b/w folks who render solutions and those who are supposed to use them.
• Startups must bridge this gap and cultivate an in-depth awareness concerning the customers as well as their needs in order to build successful products.
• In the Indian context, this is particularly difficult.
• India is a highly diverse nation in the entire world with a plethora of languages, ethnicities, cultures, and religions.
• As Indian customers belong to a different region and culture diversity prevails in the country, the start-ups’ understanding of these customers is often confined to certain regions, which they are familiar with and where they understand local people to work with.
• Comparative benefits are connected with specific regions in that sense.
• Hence, forming a pan-Indian startup is not easy and straightforward because they have little or no understanding of customers in other regions.
• Most importantly, there is a lack of connection between the startup founders & the potential customers for whom they endeavour to create products.
• In the current scenario, most startup founders are well-educated and belong to elite backgrounds in urban parts of India.
• However, as near about 70 % of the Indian population reside in rural areas, the customers of the mass market belong to low-income backgrounds in villages.
• Due to diversified living environments and conditions, startups often have a lack of proper understanding of the customers as well as their needs.
• The digital divide affects the startup ecosystem in India.

Startup Ecosystem in India: Raising Awareness in Market

There are several support mechanisms that portray a crucial part in the lifestyle of all the startups, which entails business development centers, incubators, science & technology parks, etc. There is an elevated risk of failure due to the lack of such support centers.

Aatmnirbhar Sena is all set to play a Prominent Role in Boosting Startup Ecosystem in India

As the startup ecosystem in India expands, Aatmnirbhar Sena is witnessing startups rising thick and fast all across the nation. We are bringing the less known startups to the fore and helping the new entrepreneurs develop their startups by directing as well as aiding them in the process. We are all set to maintain the early-stage startups in getting funding at the initial level from VCs and angel networks.

Our honourable prime minister, Narendra Modi, furnished the example of the startup ecosystem in India as the beacon of desire and innovation. Also, he added that India's startup sector is a perfect example of how tenderness, desire, and innovation can eliminate the sufferings of one and all.

At Aatmnirbhar Sena, we have realized the disruptive potential that new startups hold, and thus, we are wholeheartedly making the wise result-oriented investment in them. Most importantly, we are looking to become the enabler of the startup ecosystem in India. Aatmnirbhar Sena is planning to empower entrepreneurs to make resources accessible and sort out the prevailing issues in their local areas. Also, we are heading towards bringing the reduction in the regulatory burden on startups so that they can keep their primary focus on their core business. Besides this, we will be addressing the obstacles at the entrepreneurial level.