startup: ‘startup Ecosystem Has Reached Self-sustaining Phase’ | India Business News – Times of India

BENGALURU: IPOs and unicorns have created a flywheel effect in the Indian tech startup ecosystem. That’s the message from a report by Nasscom and consultancy firm Zinnov that was released on Friday.
Pari Natarajan, CEO of Zinnov, said the tech startup IPOs (there was a record 11 last year) and the unicorns (a record 42 were created last year) have generated enormous funds, which these companies are in turn investing in other tech startups and using to buy products that these new-age digital ventures are creating. The IPOs and venture funding are also, he said, creating wealth in the hands of individuals who are using that to provide seed funding to newer tech ventures. Darwinbox, he said, is one example of a startup that’s benefited from this – its HR management software is used by a number of Indian unicorns. “This will allow them to improve their product and sell to larger Indian and global enterprises. The same thing is happening to many deep tech startups,” he said.
Nasscom president Debjani Ghosh said not only are unicorns investing in startups, they are also mentoring them.
The report `Indian Tech Start-up Ecosystem: Year of The Titans,’ showed that startups raised $24.1 billion last year, a two-fold increase over pre-Covid levels. In comparison to 2020, there was a three times increase in the number of high-value deals (deals over $100 million), demonstrating investor confidence.
The ecosystem saw a two-fold gain in cumulative valuation from 2020 to 2021, with an estimate of $320 – $330 billion.
The ecosystem is estimated to be the largest after those in the US and China. The growth in investment into it in 2021 was perhaps the highest in the world. There was a big jump in angel investors last year to 2,400. “India was lagging behind in angel investors. That has changed,” Ghosh said. She said Indian corporates are also working closely with startups, “investing in them significantly.” Last year, 260 corporates were active in engaging with the startup community; up from 170 in 2020. Some 175 corporates invested in startups in 2021, with 52% being MNCs.

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Ghosh said she was also encouraged by the growing diversity and inclusion – 30% of startups are now outside established hubs like Bengaluru and NCR; and 10-15% of startups have at least one woman founder.
Natarajan said the time that startups are taking to turn a unicorn has shrunk substantially. Mensa Brands, for instance, turned a unicorn in six months. He said that’s partly because investors are looking at the best options to invest in a short period of time. But also because there are now experienced entrepreneurs – those who exited successful ventures – who know how to build for the global market. Investors, he said, have little hesitation to put big money behind such ventures.

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