India will be home to over 4,750 tech startups in 2016

BANGALORE, INDIA: Despite the not-so-good funding scenario, the startup ecosystem in India is poised to grow by an impressive 2.2X to reach more than 10,500 startups by the year 2020, as per the Nasscom-Zinnov startup report. The number of tech startups alone in India is expected to grow by 10-12% to over 4,750 startups by the end of 2016.

India also continues to be the home to the third largest startup base, marginally behind the UK, with Bengaluru, NCR, and Mumbai continue to lead as the major startup hub for the nation.

R. Chandrashekhar, President, Nasscom, said, “Technology startups are creating a new identity for India and its technological prowess. They are defining the way the world operates making life better and easier for people and businesses alike.”

In terms of vertical growth, investors are looking at domain like health-tech, fin-tech, and edu-tech. With a total funding of approximately at USD 4 billion, close to 650 startups were funded signifying an aware and healthy growth of the ecosystem.

Some of the notable findings of the report:

1400 new startups expected in 2016, up by 8-10% from last year:  The report reveals an increased interest from student entrepreneurs this year. A remarkable growth of 25% has been witnessed in 2016 with 350+ startups founded by young students. Median age of startup founders has reduced marginally from 32 years in 2015 to 31 years in 2016.

80+ M&A deals expected in 2016; 60 already successfully executed; 95% of the deals by Indian organisations – startups, unicorns and corporates 

140+ Accelerators/ Incubators(Over 40% YoY growth in 2016): With impetus from Government and Corporates, there is a 40% increase in the number of active incubators and accelerators in 2016 with over 140 active incubators. Over 30 new academic incubators have been established under the Government’s ‘Startup India Stand-up India’ initiative this year. With the country showing signs of increased interest in entrepreneurship, Tier-II/III cities have established 66% of the new incubators.

350+ active angels, up 20% from 2015; new breed of angels with domain experts

8% increase in no. of deals, more investment in B2B: Investors are increasingly looking at opportunities in startups in areas other than online retailing. The sentiments are high for ventures in verticals like Fintech, Healthtech, Edutech, data analytics, B2B commerce and artificial intelligence.

8-10% of startup from tier 2/3 cities – broad basing the startup ecosystem 

2x growth of core technology (IoT, ML/AI, Robotics) startups 

100,000 employed at startups

Ravi Gururaj, Chairman, Nasscom Product Council, said, “The startup landscape is undergoing great churn with fast-paced changes happening across the board. Owing to focused funding and a growing need of scaling up capabilities, Indian entrepreneurs will continue to attract global attention due to a perfect mix of talent, technology, traction and transactions. With Indian startups now churning out critical services and solutions for large multinationals, riding on the digital revolution which is encompassing the world; the situation for Indian startups is only going to get better.’

Talking about the growing startup ecosystem in India CP Gurnani, Chairman, Nasscom, said, “Today, India is brimming with new ideas which need the right guidance and funding to be scalable for the market. It’s a great time to be an entrepreneur in India with opportunities abuzz – both globally and in domestic markets. Nasscom believes that the contribution by startups has been growing at a rapid rate and the landscape has a huge potential in terms of business stability, revenue growth and further innovation.”