GROWTH

India adds 1,000 start-ups in 2017; 50% in B2B space

start-up Bengaluru, Delhi and Mumbai continue to dominate the start up hubs in the country

The year 2017 saw 1,000 new start ups getting added to the start up ecosystem in India, taking the total number of tech start-ups to 5000-5200. This indicated a 7 per cent Year on Year (YoY) growth in the overall start up base in the country. 

India continued to be the 3rd largest start up hub in the world after the UK and Israel with Bengaluru, Delhi and Mumbai dominating the start up hubs in the country. The Indian start up base is neck to neck with that of Israel. The highest growing start-ups were in areas of health-tech, fin tech and e-commerce. These were the findings of the 2017 edition of the NASSCOM-Zinnov report on the ‘Indian Start-up Ecosystem – Traversing the maturity cycle’, which was released on the sidelines of the NASSCOM Product Conclave 2017 in Bengaluru. 

The report further said that almost 50 per cent of new start up additions came from the B2B (Business to Business) segment, up from 34 per cent when compared to last year. The average funding for B2B tech start-ups in 2017 saw an increase of 5 per cent while B2C tech start-up average funding saw a decline of 10 per cent.

“Despite the three main start up hubs, Bengaluru, Delhi-NCR and Mumbai, dominating the scene in India, we also saw a huge traction of start ups coming in from the tier II and the tier III cities in India. Interestingly tier II and III cities accounted for around 20 percent of the start-ups in the country. Also the reason for more B2B start ups coming in is because they are less capital intensive. However there has been a decline in the overall seed funding for start ups in India which is not a very good sign as more and more investment is required at the seed level to nurture new ideas. The primary reason for this is due to the angel tax problems,” said Raman Roy, Chairman, NASSCOM, and CEO and MD, Quatrro Global Services. 

Interestingly as per the report, advanced tech startups were growing at 30 per cent CAGR and there was a YoY start-up growth in top verticals such as health-tech, fintech, and e-commerce segments. Advanced tech start-ups focused on creating solutions in segments like Artificial Intelligence, Analytics, Augmented Reality / Virtual reality, Blockchain and Internet of Things, among others.

The report also highlighted that the Indian start up scene had 550 female entrepreneurs, and there were also over 450 student start-ups in the country driven by academic incubators. The year also saw social impact startups building solutions to address core India problems. 

Driven by the need to enhance tech capabilities, expand markets and portfolio, global corporates are now drawn towards the Indian tech start-up arena. First half of 2017 saw more than 50 M&A deals, indicating at a growth of 25 per cent since first half of 2016. Over 325 start-ups, with Year on Year growth of 18 per cent were catering to social challenges in the areas of healthcare and education, and are thus building solutions for India, creating social impact.

(With inputs from Vandana)

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Topics : #Startup

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