The Rise of Startups in the Epidemic
- BY Jaspreet Kaur
Feature Writer, BusinessEx
- Aug 17,2021
- 11 Mins Read
An array of innovations occurring in the business economy led by the crisis. The epidemic induced conditions that created a do-or-die situation for businesses, particularly emerging startups. As a result, the Indian startup ecosystem has birthed several innovations since the last year (2020). Companies pivoted their business, new products were developed as per the customers’ demand, and much more.
All this was not possible without the aid of investors, private funding organizations, and government bodies. These bodies not only funded startups but also facilitated them in converting into unicorn startups.
Augmenting Indian Startup Ecosystem
Throughout the years, government policies stimulated the overall development of the startup like establishing incubators, augment existing infra, and amending redundant policies. Atmanirbar Bharat, Startup Mission, and Credit Guarantee Scheme are some moves taken to improve MSMEs and Startups.
According to a report by The Economic Times, the Indian government is planning a strategy to bring investors and startups on a common platform, LIC and Employees’ Provident Fund Organisation (EPFO) are among those willing to fund startups. The online platform would be prepared by Sidbi along with EPFO and LIC showing interest during a meeting of the National Startup Advisory Council.
"India has just around 6,000 angel investors, while the US has close to three lakh. We are looking at the regulatory and other issues to make the system more robust," an official told TOI.
In addition to this, the government will be reportedly initiating a mentorship programme. According to the above-stated media report, the idea (mentorship programme) is to set up a technology platform through which there can be match-making and the field can be expanded. The moves came amid a fresh endorsement of the thrust being given to startups in government policies.
Spike in Tech Startups
2020 has become a momentous period for many reasons. Firstly, the Coronavirus epidemic that jostled the entire world followed by the epidemic-led financial crisis dooming the global market. In such a gloomy situation, India saw a remarkable growth of tech startups. According to a report by NASSCOM, the country added over 1,600 tech startups in 2020, making it the third-largest tech startup ecosystem across the globe.
With this addition, the total count of tech startups reached 12,500 comprising 12 new unicorn startups.
The report stated that the overall Indian technology sector grew 2.3 per cent year-on-year (y-o-y) on the back of rapid acceleration in digital transformation and tech adoption, though global output is estimated to have shrunk by 3.2 per cent as a result of the fallout of the covid-19 pandemic.
According to a report by Mint, the Indian tech contributed about 8 per cent relative share to the national gross domestic product (GDP), despite headwinds in 2020, with 52 per cent relative share in services exports and 50 per cent share in total foreign direct investment (FDI) based on inflows from April to September 2020.
Despite the prevailing unfavorable conditions, startup companies attracted investors and bagged money in abundance. Thus, it can be said that startups, especially tech companies have overcome the pandemic.
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