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A total of 2,250 tech start-ups were founded in 2021, registering a 39 per cent cumulative growth (10 year compound annual growth rate (CAGR)) of Indian start-ups, according to a report by the National Association of Software and Service Companies (Nasscom).
The total number of Indian tech start-ups now stands at 25,000 to 26,000. Additionally, 12 per cent of all start-ups are leveraging deeptech to build solutions for local and global markets. Artificial Intelligence (AI) was the highest leveraged technology with a five year CAGR of 39 per cent followed by Internet of Things (IoT), Big Data and Analytics.
Inclusive, diverse ecosystem
The report states that the start-up ecosystem is becoming an inclusive and diverse ecosystem. As much as 48 per cent of start-ups are building solutions for India 1 and India 2 income groups; 10-15 per cent of start-ups have at least one woman co-founder, including 10 unicorns; 29 per cent of all start-ups are based outside established hubs.
Nasscom has also identified 135 soonicorns in the tech sector that it anticipates getting unicorn status within the next 1-3 years, following a large increase in the number of unicorns in the country last year.
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Aims to upgrade banking and administrative processesStart-ups raised $24.1 billion in 2021, a two-fold increase over pre-Covid levels. In comparison to 2020, there was a 3X increase in number of high value deals (deals > $100 million). While the United States remains the leading source of foreign direct investment (FDI) in start-ups, worldwide involvement is also growing — 50 per cent of the deals had at least one India-domiciled investor.
Reducing compliance burden
Piyush Goyal, Minister of Commerce and Industry, at the launch of the report said the government is looking to reduce compliance burden to boost the ecosystem. It has already taken steps to resolve the angel tax issue. “Simplification of procedures, removal of restrictions and self-certification will be looked at. We have the budget coming up soon and all of us are anxiously waiting to see and hear what is done with some of the recommendations given…” he said.
Over 26,000 compliances have either been simplified, digitalised, or completely removed from the statute and 770 offenses have been decriminalised already, the minister added.
‘Brighter future’
Further, Debjani Ghosh, President, Nasscom, said, “The performance of the Indian start-up ecosystem in 2021 has proved the resilience and dedication being put by multiple start-ups across segments. The ecosystem has grown immensely and positioned itself as a vital contributor to the growth of India’s digital economy. With record-breaking funding, an increase in the number of unicorns, jobs being created in the near term, the Indian start-up ecosystem’s future looks even brighter going ahead in 2022.”
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