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The Scenario of Startups in India - 72 Networks

1. What is the present state of start-up ecosystem in India? How long before India gives rise to more number of unicorns? The last two decades have seen a paradigm shift in the Indian start-up ecosystem. The number of start-ups has risen exponentially and now are being recognised as the important engines for socio-economic development and employment generation in the industry. More than 1,300 start-ups have been incepted so far in 2019 scaling up India to the third largest start-up ecosystem in the world (According to NASSCOM). The total number start-ups in India have risen to whopping 9,300+. Addition of seven Unicorns have also been witnessed by India this year till August. India is now the country with the highest number Unicorns in the world, tallying up to 24. The average time taken to reach Unicorn status in India has reduced dynamically. India is likely to touch the ballpark of 54 tech Unicorns by 2024, according to a study. Out of these 54 unicorns, 8 are expected to be in payments, 8 in content and social, 5 in mobility, 5 in education and 5 in logistics, 3 in food delivery and 10 are expected to be in eCommerce, according to a report by Fosun RZ Capital. 2. What is the average time taken by start-ups to become a unicorn when we talk about India? How is it different in other countries like the US and China? According to a survey, the average time for a start-up to become a Unicorn is 5 to 7 years. The report also states that the median founding year of Unicorns in India is 2010. Same year MakeMyTrip became India’s first Unicorn. This is only a tad slower than China, 4 to 6 years and faster than US, where the start-ups join the Unicorn club in 7 to 8 years. 3. What is it that lacks in these start-ups that only a handful of them manage to reach the billion-dollar mark in spite of having a promising product/service/solution? The most common reason for a start-up to not reach a billion-dollar mark is lack of investors, or if the investors are willing to put money in an idea. Most of the times the market is driven by herd mentality, market trends and global pressure than the status of a promising business. Another major reason for a start-up to lag the race to join the Unicorn club is the lack of decision making. Most of the founders lack the basic financial knowledge and do not understand the business nitty gritty. They forget that calculated risks are a fundamental part of the essence of successful business ventures. Also, the most quintessential thing for a successful start-up is to solve a market problem. A start-up fails when the technology or the business model does not give a cure-all for the pain point in a scalable way. 4. How has the VC funding scenario changed in the country and how are they responsible in giving rise to more number of start-ups in the country? VC financing in India has seen significant expansion with the entry of large number of VC firms. These firms are responsible for raising huge amount of money in start-ups with promising future. The main sectors in which the investors offering the VC financing in India are interested are technology, software, internet, eCommerce, energy, advertising, healthcare etc. This opens up golden opportunity for new start-ups with distinctive business ideas with a growing market, a structured team, an innovative and unprecedented business model and a home-run potential. VCs do not waste anytime to back up a start-up with all the necessary items that make it ideal for investment. Ref: 1. https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/over-1300-startups-added-in-2019-over-8900-tech-startups-in-india-now-nasscom/articleshow/71925791.cms 2. https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/54-tech-unicorns-expected-in-india-by-2025/articleshow/70481870.cms?from=mdr 3. https://inc42.com/features/indian-unicorns-how-long-do-startups-in-india-take-to-become-unicorns/

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