To kickstart the NASSCOM Product Conclave Conference in Bangalore, Rajat Tandon, Director at NASSCOM and Sunil Rao, Country Head-Startup Ecosystem at Google India, gave an amazing overview of the state of the India startup ecosystem.
Their report, dubbed “NASSCOM 10000 Startups Report” or “Startup Landscape 2014”, shows the growth of India as the 4th largest base for startups in the world, as well as local differences, data on the typology of founders, up to the success stories of the past five years and the different parts of the ecosystem itself with VCs, supporting organisations and more.
The report is not only a bragging exercise, although figures really show the maturing of India’s startup scene. The idea is to “have a benchmark to plan for the next few years, and set targets for 2020”. Most of the data found in the report cover the last 5 years.
India startup ecosystem: 3,000+ startups now, 10,000 by 2020
The first set of data shows the sheer volume of India’s tech ecosystem. With 3,100 startups, and 800 more every year, this is the 4th largest country after the US and China. The positioning of India as a startup country is also thought of in the light of other famous startup scenes such as the US, Israel, Singapore.
The growth of the scene should go as far as 2,000+ new startups created each year by 2020, and job creation from these entrepreneurs go from 65-75k as of today to 250-300k by 2020.
Of course India is a continent of its own, and some 6 cities are trusting 90% of the technology scene. Bangalore (now Bengaluru) and the New Delhi area account for 28% and 24% of the startups in India, although emerging scenes pop up around the country, from Mumbai to Hyderabad, Pune or Chennai.
Who are the Indian startupers and entrepreneurs?
The profile of entrepreneurs in India doesn’t give too much surprise, with 32 y.o as an average age, only 6% women founders.
Interestingly enough though, the biggest chunk of startupers in the country have a background in MNCs and Indian tech companies (35% and 27% of the sample of the report). Only 13% of startup founders have no experience in the field before launching their venture.
The ecosystem itself is supported by a growing number of funds, angels, and support organisations such as incubators, accelerators, event platforms and academic programs.
Where it’s possible to see a growth in terms of ecosystem is by the growth of the numbers of all these components, as well as of the average size of deals.
In India, the average investment in 2010 was $4.2m, it should reach more than $11m for 2014. Investments are also spread across a wide range of stages, from seed funding to growth stage. The recent big fundraising of e-commerce specialist Flipkart ($1bn raised at $7bn valuation) and the investment of $2bn from Amazon show this maturity, at least for the e-commerce part.
Products and services for the growing middle-class of India
Of course just like in any market, not is all positive.
If India, by its market size and its fast growing middle-class (50m in 2007, 583m expected by 2025), and a lot of blue oceans (Big Data, Internet of Things), there are some blocks on the road. Regulations and bureaucracy are often said to be big and inefficient in India, infrastructure is very unequal across the country.
This report on the India startup ecosystem ends up with a series of key points the government needs to address to foster an even stronger culture of entrepreneurship, from the equivalent of a small business act to get startups to take part into big public projects, up to clearer funding rules and special administrative & economic areas for startups.