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India remains the third-largest tech start-up ecosystem globally, with over 950 tech start-ups founded in 2023, contributing to a total of more than 31,000 tech start-ups in the last 10 years. The cumulative funding for these tech start-ups from 2019 to 2023 has exceeded $70 billion, according to Nasscom Zinnov report.
The report, titled ‘Weathering the Challenges – The Indian Tech Start-up Landscape Report 2023’ noted that despite facing global challenges in 2023, including valuation issues, fewer IPOs, regulatory changes, and macroeconomic and geopolitical trends, Indian tech start-ups remained dedicated to enhancing their business fundamentals, profitability, and revenue pipeline through efficient sales strategies.
According to the report, about 60 per cent of start-up founders reported increased revenue and profitability in 2023. Notably, a significant portion of unfunded tech start-up founders anticipate higher revenues in 2024, compared to their funded counterparts.
The use of deep technologies is increasingly becoming mainstream. Indian start-ups are leveraging DeepTech to improve organisational efficiency (59 per cent of the surveyed tech start-ups), reduce operational costs (52 per cent of the surveyed tech start-up), and automate internal operations (41 per cent of the surveyed tech start-up).
Democratisation of tech in 2023 has led the Indian tech start-ups to diversify into Tier II and Tier III locations. The share of tech start-ups established in emerging hubs rose to 40 per cent in 2023, reaffirming the depth of India’s start-up proliferation.
Debjani Ghosh, President, Nasscom, said: “In 2023, despite facing global economic and regulatory challenges, Indian tech start-ups have prioritised the imperative of enhancing their business fundamentals, driving profitability and growth. India’s tech start-up ecosystems’ growth is now anchored in a strategic shift towards improving business metrics and revenue streams. DeepTech, a key innovation driver, accounts for just 14 per cent of this funding, and needs an exponential acceleration to build India’s Deeptech ecosystem. The proliferation of tech start-ups in tier-II and III cities marks the ecosystem’s resilience”.
risks remain
As the Indian start-up landscape unfolds in 2024, opportunities and risks of the global environment will continue to create a shadow. Overcoming challenges, the ecosystem is likely to see improvement in funding, impending IPOs taking place, and innovation across disruptive technologies and key sectors. In 2024, tech start-up founders expect to continue the revenue growth path with measured steps focussing on optimising expenditure and maximising profitability for B2B tech start-ups.
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