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Invest in India – Indian Startup ecosystem getting redefined.

Since the beginning of this decade, the start-ups in India have seen an exponential rise, both in terms of potential and funding. Being the third largest start-up supporting country of the world, India has been moving towards a radical change in the way that redefines the start-up scenario in the new-age markets.

Recently we have seen a progression in the start-up section ranging to approximately 4200 clairvoyant companies that have bud up. As per the trends these companies have seen a major opening in the sectors like e-commerce, internet and consumer based products and hence the internet based companies are at a boom. The start-up picture commenced with IT as its major targeted sector, that had been an area promising prominent growth but with the advancement in years the entire view of this eco-system is getting modified.

In today’s time these start-ups are impacting the core areas along with the critical areas from nation’s view-point. These companies have started dealing with diligences like defence and electronics. As per a survey that was carried out by NASSCOM, India is one of the nations where more than 70% of the start-up founders are below the age of 35, hence making it one of the few countries supporting youngest start-ups. While the entrepreneurial landscape of the country is diverse in nature, it also has about 9% female founders and co-founders.

The growth in these companies is not only because of the newer ideas that hit the tracks every now and then but also for the reason that investment and raising capital for these firms is getting comparatively easier. While witnessing a growth of 100% in the number of private equity, venture capitalists and angel investors, start-ups have seen 125% increment in previous year’s funding. This has given the Indian start-up ecosystem an infallible rise. In the previous half a decade the start-ups of the country have seen an investment of more than $2 billion over 70 venture capitalists and private equities. Also about 20 mergers and acquisitions that had a net value $1 billion were recorded in last 3 years.

 

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As per the analysis of NASSCOM, a 40% growth is expected by the end of 2015 along with an approximate funding of $5 billion. The reason of this growth can be credited to the four-fold increment in the getting the investment capitals through the angel investors and venture capitalists along with seed funding. Also the incubators and accelerators can also been given credits to bring about a dynamic change in the start-up markets.

To accelerate the reformation of the start-up eco-system, NASSCOM has suggested loosening up the rules and regulations for the start-ups and the early buds of the industry. It has suggested making amendments with the TDS taxation and the companies should only be liable to TDS once they earn decent revenues. There should be proper points allocated for the company clearly stating the areas where the start-up will be taxable.

Also NASSCOM has suggested enabling access to the risk capitals and debt funding. The angel framework should be aligned to the global markets so as to get the angel investors with a comparative ease. Since the start-ups in India still rely on international investors, country should now focus more on the ways to increase domestic funding. There is also a need to analyse the areas that need support to access the markets and trainings should be carried out for the areas that need supplements and alternates.

While all these issues have been enlisted by NASSCOM, the reformation of the current start-up industry that India has shown certainly proves that the trend is going to stay here on ground for a considerably long period of time. While India today houses about 3100 start-ups the expected number is about 11,500 in 2020 which is an achievement and is laying a solid foundation for both, the founders and the investors for the years that are yet to come.

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