Indian Startups

India continues to be the third largest tech startup ecosystem globally (after the US and China). The country also added the second highest number of unicorns in the world, with over 23 added in the CY2022. Simultaneously, the potential pipeline of unicorns expanded to over 170, growing at a pace equivalent to 2021, according to the report by the National Association of Software and Services Companies (Nasscom), in collaboration with Zinnov.

According to data by Fintrackr, an arm of startup news portal Entrackr, growth-stage startups witnessed 22 deals worth $926 million in the first month of 2023. Early-stage startups received $265 million across 67 deals while 12 startups did not disclose transaction details. According to the report, the average deal size for early-stage startups was nearly $4 million.

Gautam Nimmagadda, Founder and CEO of Quixy, a cloud-based no-code application development platform, said that currently, startups can avail of a tax holiday for three years since incorporation. "However, the ideal exemption should be 10 years, in view of the high cost of solution development.

Startups created in 2023 are going to be more cash-conservative attitude and hence will be revenue and growth-focused. Due to layoffs at some large corporations, well-funded startups now have access to a new pool of brilliant people, according to 100X.VC, India's first venture fund to invest in early-stage startups using iSAFE Notes.

On the occasion of the 'National Startup Day', envisioned by Prime Minister Narendra Modi last year, industry experts said that the founders must continuously monitor the trends which are happening in the world. Indian startups fired more than 18,000 employees in 2022 amid a funding winter and macroeconomic uncertainty.

With the ecosystem maturing in the last decade, the time taken to reach the $100 million mark has decreased significantly. What took 18 years in 2000 to reach $100 million revenue has come down to five years, according to data by Redseer Strategy Consultants. There are about 100 unicorns and 170 soonicorns in India. Of these 270 shining stars, 40+ startups in FinTech, eCommerce, and logistics have crossed $100 million revenue as of FY22.

According to the findings, significant fresher hiring over the last few years in the tech Industry has pushed the share of Gen Z to 18-20 per cent and millennials to 68-70 per cent of total employee base in FY22. In fact, 79 per cent of Gen Z are willing to spend more than two years in their first job, provided employers give them the right value proposition, said the Nasscom survey with job website Indeed.

"Many nations want to fund their green transition and are imposing tariff walls on products from other nations. If we export steel to such places, it is likely to face this tariff wall or tax for green transition. Indian industry needs to reset itself accordingly," she said while addressing the industry body FICCI's annual general meeting (AGM).

The significant drop in funding is attributed to a decline in late-stage investments, which fell by 45 per cent from $29.3 billion in January-November 2021 to $16.1 billion for the same period this year, according to data provided by Tracxn, a leading global market intelligence platform. Seed stage rounds also experienced a contraction and dropped by 38 per cent as compared to the previous year.

In the meeting, attended by Alkesh Kumar Sharma, Secretary MeitY, along with startups and small and medium enterprises (SMEs), provided their initial feedback and suggestions on the bill to the IT Minister last week. Vaishnaw said that as the PDP Bill gets finalised, on cross-border data flows, the government will ensure that the approach focusses on strengthening data protection without disrupting data flows.