Here's How Indian Tech Startups Become Stronger in 2020
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Jan 14,2021
- 12 Mins Read
The present health crisis has roughened the business landscape. Companies that had come out of cocoon grappled throughout 2020. On the other hand, organisations that were on the business planning stage and were prepping up for the outside world could not see the future. Despite unfavourable conditions, more than 1600 startups were added in 2020 thereby, a steady and sustained growth in new start-ups, according to a recent report released by Nasscom.
In addition, 12 organisations entered the unicorn club thus, increasing the total number of unicorns in India to 38. During 2020, while the inactivity rate in the business ecosystem increased, on the flip side, the growth driver of the Indian startup ecosystem became stronger.
According to the cited report, Indian companies started embracing digitalisation faster. Digital maturity of the companies increased from 34 per cent (in 2018) to 55 per cent (in 2020). Even, the Internet subscribers in the country increased to over 750 million, which was slightly higher than the estimated number that is, 640 million.
The Indian government also came forward to aid MSME and the startup sector. They started two initiatives--Atmanirbhar Bharat and Vocal-for-Local that aided startups and other companies to withstand hailstorm. Companies that worked remotely helped decrease burn while increasing growth of new startup hubs. By restricting cross-border trade, Indian companies joined hands with their peers and this enabled collaborations as well as public-private associations.
Here are some of the findings by the Nasscom's report that have reinforced the Indian startups:
- Digital adoption has increased tremendously amongst the Indian startups. As a result, digital maturity of the Indian enterprise has plummeted roughly twice, on the flip side, the internet penetration in the country has increased to over 750 million users
- Entrepreneurs' mindset changed owing to the uncertainty and constant experimentations. This resulted in the advent of a new playbook for the post-pandemic world. Entrepreneurs began giving importance to some key factors such as business collaboration, conservation, employee experience, and business expansion.
- Amongst the startup ecosystem, 19 per cent firms are enhancing deep-tech to create more intricate and smart solutions throughout sectors. At 41 per cent five-year CAGR, startup pool dealing in deeptech is expanding faster than the entire industry’s pace.
- In 2020, the country added the largest number of companies into the unicorn club in a calendar. At the same time, potential pipeline increased by 1.5 times and roughly 8 per cent of global unicorns have their tech centers in the country.
- In the second half of 2020, business investments started recovering gradually. 44 per cent of transactions were recorded in startup companies that were raising money via maiden funding round. Out of all angel investors in 2019, 90 per cent investors were active in the last year while 56 per cent of venture capitalists from 2019, were participating in deals in 2020.
- More than 135 corporates were witnessed actively infusing, holding up or partnering with startups. There was a sudden increase in open innovation programs. Various investments and merge and acquisitions (M&A) recovery was going along with global trends.
These trends showcase that the Indian startups did not lose its sheen completely. The pandemic in disguise gave tech startups a much needed push and helped realise their potential. A similar growth is hoped for the sector in the year as well.
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