India's Startup Ecosystem & Opportunities 2020
Updated: Sep 3, 2019
Startup ecosystem in India is booming fast and sees huge growth in the coming year's with new innovation and technology
In around a decade, the Indian startup ecosystem has scaled to become 3rd largest start hub in the World followed by the US and China. No doubt the success of consumer internet companies have played and continue to play a big role in that. The ecosystem has seen a cycle of boom, bust and exits with a promise that India has the ability to return capital to investors, proved to an extent by Flipkart’s sell out.
Great opportunities in Indian startup ecosystem by 2020 and huge growth for entrepreneurs, founders, consultants and business coaches!!
1. Fintech boom
Fintech sector continues to grow in the fast lane. Paytm can easily be called a pioneer in finch as it gave the power of choice and how to spend to people who never had wallets or bank accounts, says Joshi. Following the success of Paytm, many other wallet companies have shown promise. We believe this sector will continue to attract investors’ interest in 2019 as the business ideas in fintech.
2. Direct-to-consumer market scale up
Over the last 2 years, according to Rao, India has seen a few dozens of direct-to-consumer brands getting built largely using Facebook and Instagram to get discovered by prospective customers. This year, says Rao, it will be surprising if this space doesn’t grow 3-4x and its a huge opportunity for non-tech entrepreneurs to build reasonably large businesses and brands.
3. Electrified Transportation
Electric mobility sector has been developing away from the limelight. Particularly the batter-driven two-wheeler market is an interesting space growing at a fast pace, says Manish Singhal, founding partner at deeptech fund Pi Ventures. For instance, startups like Ather Energy that launched their smart e-scooter in Bengaluru last year. The market growth will be led by e-commerce to bring efficiency deliveries using e-vehicles. Also, the opportunity aligns with the government vision of switching to electric mobility.
4. 'Voice’ gets louder
As voice interfaces and assistants like Alexa and Google have given consumers a peep into the possibilities in every sector including banking, healthcare, education etc it will hit a meaningful scale only once the regional languages are cracked. While there has always been a lot of chatter around regional language content online, it hasn’t really had a big moment yet. Voice will be that platform through which this will happen. There will be a lot of startups attempting to crack this new opportunity.
5. Innovate India
The interim budget conveyed the message that India’s youth should constantly innovate to drive the country’s growth. Towards this end, the government has pushed for the use of digital technologies through initiatives such as National Programme on Artificial Intelligence (AI) and the establishment of nine centres of technological excellence.
6. Growth Demographics
Even though India experienced a brief slowdown in 2016–17, India’s start-up ecosystem is again set for a blooming phase, post-2017. Investments into start-ups have increased by over 100 percent, from $2.0 Bn in 2017 to $4.2 Bn in 2018. The total number of start-up funding deals especially in the late stages (Series C, D, E, and F) witnessed an unprecedented growth of around 250%, from $847 million in 2017 to $3.0 billion in 2018. Even though the amount of seed stage funding raised stood at $151 million, the larger number of late-stage deals rose sharply, which signifies a renewed investor confidence in the Indian start-up ecosystem.
7. Infrastructure and Resources:
Today we have an estimated 100+ Startup Incubators across the country, mostly housed in academic institutions; this number is likely to cross 300 by 2020 — what this means, is that, there will be a startup incubator in every state, city and town in the country; thereby enabling entrepreneurs to access resources and solve problems in their local areas. Next, we have Co-Working spaces which are growing at an exponential rate and this is likely to result in entrepreneurs having access to office spaces in their neighborhood; yes! no more of those long unproductive commutes to your workplace.
8. Government and Regulatory Landscape:
We have seen various states coming up with startup policies, and in 2020 — don’t be surprised if all the 29 states and 7 UT’s have a startup policy in place. Governments at the central and state level have recognized the potential of startups as a driver for job creation and are enabling better regulatory environment for starting up. We are likely to see the positive effects of job creation in a couple of years, when people working in the corporates are likely to quit their jobs to either startup or even join a startup.
While Startup India and other policies are looking at addressing the problems at an entrepreneur level (B2C), NITI Aayog is in the process of making the necessary infrastructure and resources available through the Atal Innovation Mission (AIM). AIM is adopting a more B2B approach by supporting in the scale up of existing incubators such as NSRCEL, C-CAMP etc. and also setting up greenfield incubators in almost every part of the country; they recognise that the challenges are very unique and the models of incubation, very different in each context. In addition, AIM is also helping in setting up tinkering labs in schools and institutions to make innovation accessible. This has a direct impact on the infrastructure and resources perspective as stated above.
India may double startup base by 2020 - Nasscom-Zinnov
Traditionally India was the back-end, customer service core for major global MNCs. However, India currently sports a tech-heavy landscape. This is because it has observed a 50% jump in the number of advanced tech startups since ’17. The country has more than 500 million internet users. It is also the second largest online market after China. We can expect an active implementation of blockchain, AI, IoT, and data analytics across multiple technology sectors. For example, IoT in India is presumed to reach a whopping $15 billion by 2020. It will account for approximately 5% of the total global market. On the other hand, AI is predicted to become as big as $ 15.6 trillion by 2030.