The Unicorn startups have successfully generated large-scale employment and leveraging new technologies and helped in developing innovative solutions
India is at the cusp of its growth. The creative and innovative thinking power is so immense that many Multinational Corporations have opened their R&D centres in India to take the maximum advantage for their organisations. The objective of these R&D centres is to work for local product development and more on global product development. In fact, some data has indicated that more than 800 MNCs have opened their R&D centres in the last 10 years employing more than half a million resources. It has also been informed that the quality of research and patents filed by these R&D centres are equivalent to those filed by these MNC's in their parent countries.
PM’s Push to Startups
This innovative mindset got a bigger boost when the Prime Minister of India announced the Startup India initiative on August 15, 2015, to build a strong ecosystem for nurturing innovation and startups across the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government further took various steps towards ensuring the success of startups through "Simplification and handholding", "Funding support and incentives", and "Industry-academia partnership and incubation". These steps are made to ensure India realises the creative potential of its youths and make the vision of the Startup India initiative a reality.
In the last few years, significant progress has been made in this direction, and various milestones have been achieved. Today one out of ten unicorns globally are born in India.
The Department for Promotion of Industry and Internal Trade (DPIIT) is mandated to coordinate the implementation of the Startup India initiative with other Government Departments. Apart from DPIIT, the initiatives under Startup India are driven primarily by five Government Departments viz. Department of Science and Technology (DST), Department of Biotechnology (DBT), Ministry of Human Resource Development (MHRD), Ministry of Labour and Employment and Ministry of Corporate Affairs (MCA) and NITI Aayog.
Transforming India through Start-ups & Unicorns
DPIIT has reported that more than 61,400 startups have been launched in India, of which 39,960 are active ones. The number of startups launched in 2018, 2019 and 2020 was 4200, 3500 and 1250, respectively. The funding to the startups has seen a sharp increase since 2015. In 2021, the funding amount was $42 billion, whereas it was $ 5.7 billion in 2016. The highest number of active startups as of date belong to Enterprise tech (18.7 per cent of the total no. of startups) followed by Ecommerce (12.8 per cent), Fintech (12.1 per cent), Consumer Services (9.5 per cent), Healthtech (8.9 per cent), Edtech (8 per cent) and Media and Entertainment (7.9 per cent).
Generating Job Opportunities
Most of these startups have successfully generated large-scale employment. These startups are leveraging new technologies and developing innovative solutions. The intellectual power, innovative thinking, creative application and technology combined with the fertile economic ground to experiment in a market full of challenges and opportunities have led to significant growth of these startups, leading many to turn and become unicorns. Until 2016-17, every year, India added one unicorn. However, India has seen exponential growth for unicorns with a whopping 66 per cent growth. In 2021, more than 44 unicorns were born in India, with a total valuation of $92.77 bn. Delhi NCR, Mumbai and Bangalore were among the top cities besides Hyderabad, Chennai and Ahmedabad, where young minds of India found a fertile ground to launch their ideas and set up their headquarters.
As per the Inc42's Annual Indian Start-up Funding report 2021, India is home to 84 unicorns with a total valuation of $ 283 bn. India today contributes 10 per cent of total unicorns born globally. Despite the pandemic posing serious threats to businesses, it has been unsuccessful in deterring the resolve of young Indian minds. 2021 saw an exponential boom amongst startups and unicorns in India. The credit goes to the vibrant startup ecosystem getting developed in the country. Until the end of the first 2 weeks of January 2022, India has witnessed the birth of 2 more unicorns named Mammaearth and Fractal analytics. As per the report published in The Economic Times dated January 15, 2022, India – with 90 unicorns – is the third-largest unicorn hub behind the US (487) and China (301) and ahead of the UK (39).
Indian unicorns are also entering unconventional sectors and sub-sectors in the conventional sectors, including NBFCs, Conversational Messaging, Cryptocurrency Exchanges, D2C and Cloud Kitchens. Indian unicorns are also exploring public listing avenues as a next step to realise their growth potential. Some of the big unicorn names that offered an IPO include Zomato, Nykaa, Policybazaar, Paytm and Freshworks, while many are already in lines such as Delhivery, Mobikwik and CarDekho.
Glorious Educational Culture
As per Angus Maddison, in his book, The Contours of World Economics, India had more than 35 per cent of the world's total GDP from the Ist century until the 18th Century. A deeper analysis of India's glorious past indicates that this was possible because of the strong education and innovation culture provided by the finest of the universities of those days, including Taxila University, Sharda University, Nalanda Sompura, Odantpuri, Vallabhi, Kanthnoorshala and many more. These institutions became the centre of excellence and produced scholars, scientists and innovators who produced amazing innovations that led India to be called Golden Sparrow.
In the contemporary world, the global ranking of any country is influenced by its entrepreneurial activity in terms of its innovation, competitiveness and job creation that helps a nation progress and grow on social and economic indicators.
In the last few years, education in India has ignited the entrepreneurial spirit of young minds leading to exponential growths of startups and unicorns.
The ever-growing entrepreneurial spirit of the young students has energised the institutional startup ecosystem. Institutes play a critical role in fostering innovation and entrepreneurship beyond functioning as a multidisciplinary knowledge hub. Indian technocrats and management professionals studying in various educational institutions are increasingly contributing to the growth of India's startups and unicorns.
According to a UK-based payroll and accounting firm study, the Indian Institute of Technology (IIT) ranks as the fourth-largest producer of unicorn startups in the world. As per The Economic Times, 30 out of 58 unicorn startup founders are graduates of IIT Delhi, IIT Bombay, IIT Kharagpur and IIT Kanpur. In fact, every second founder of Indian startups that has transformed into a unicorn is an alumnus of one of the four oldest Indian Institutes of Technology.
Finding New Opportunities
Five sub-sectors — AgTech, Blockchain, Advanced Manufacturing and Robotics, AI and Big Data, Fintech — are growing in size at an astounding pace, with an average 107 per cent rise in early-stage funding deals and 43 per cent growth in exits. AI, Big Data and Analytics are the largest sub-sector, comprising nearly 27 per cent of all global startups,
Other sectors like cybersecurity, edtech, cleantech and gaming are also maturing at significant rates, seeing a collective growth of 33 per cent in funding.
With such progress, not only India can address the issues of employability and livelihood besides transforming certain sectors for their social and economic output.
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