Steve Jobs once famously said the difference between successful entrepreneurs and unsuccessful ones is “pure perseverance.”
The year 2018 has given Indian entrepreneurs much to rejoice about. Sure, there were some lows, but the highs outweighed them as the startup ecosystem saw some big moves. While the Flipkart-Walmart deal gave it a much-needed boost, the tweak in Angel Tax norms brought some calm. On World Entrepreneurship Day, we recap some of the top moves that redefined India as an entrepreneurial hub.
Flipkart-Walmart deal: Walmart acquired 77 percent stake in Sachin Bansal and Binny Bansal’s Flipkart for $16 billion, which valued the ecommerce giant at a whopping $21 billion. In the 10 years of its existence, Flipkart raised $7.27 billion, and gave strong competition to global major Amazon.
When Walmart went shopping, the deal made more than 100 Flipkart employees millionaires with a $2 billion ESOPs pool. And as Walmart gets set to run Flipkart, the startup ecosystem has many Flipsters who have enough money to retire, or venture out on their own.
Angel Tax tweaked: Tax on investments made by angel investors in a startup remained a bone of contention for four years. Income Tax officials determined valuation of startups based on projections rather than actual performance, and issued several tax demands. Some startups buckled under the pressure while some soldiered on.
After much lobbying, the government tweaked the rule. Now, startups that have a total investment of up to Rs 10 crore, including from angel investors, can seek approval from an eight-member government board for an exemption under Section 56 of the Income Tax Act.
More Unicorns: Zomato, FreshWorks, Paytm Mall, Swiggy, BYJU's, and PolicyBazaar turned Unicorns in 2018. The latest to join the club were Girish Mathrubootham’s Freshworks after its recent $100 million fundraise and Ritesh Aggareal's OYO. Of all the above startups, Swiggy was the fastest to become a Unicorn – achieving the enviable mark in three years of founding – while the rest took an average of 9.5 years.
Startups go global: Three Indian unicorns - Ola, Paytm and OYO - went global this year. OYO registered almost 11,000 rooms across 26 Chinese cities targeting seven lakh Indian travellers, while Ola gave Uber a ride for its money in Australia and now the UK. The ride hailing app already has registered 30,000 drivers Down Under. Global ambitions took Paytm all the way to Canada and the company is actively looking to launch services based on demand.
State startup policies became active: As many as 19 Indian states implemented startup policies this year. While Goa and Maharashtra launched their policies in 2018, Rajasthan pulled out all stops to support its startups through funding, infrastructure and mentorship. Implementation in states like Chhattisgarh and Odisha gained momentum. Karnataka and Telangana, meanwhile, are competing to make their industries business friendly. The commerce ministry is also actively working to promote innovation among startups and provides 80 percent rebate on patent filing fees, and 50 percent on trademark filing fees. The ministry has also entered into international bilateral cooperation with countries that have strong startup ecosystems such as Israel, Singapore, Portugal and Sweden.
Foodtech made a comeback: Zomato and Swiggy were in the news, and not just for their intense competition. Zomato’s deals with hotels made people flock to its ‘Gold’ membership programme, while Swiggy turned Unicorn with its $210 million fundraise. Other players also made waves as Hungerbox began to deliver food to companies and raised $4.5 million from VCs.
Accelerators become the norm: From Shell to Bosch, from Cisco to NetApp and Qualcomm – large corporations have made the leap of faith and set up successful accelerators in India. The global GICs are going all out to fuel Indian talent to innovate, not just for India but for the globe.
Co-working becomes the new normal: CoWrks and WeWork went on an expansion drive, as did brands like Awfis and 91Springboard. There are more than 150 accelerators in India and investments to the tune of $400 million each year are expected in the space over the next five years. With more than 160 players in the co-working space running over 350 centres across Tier-I and Tier-II cities, not having one’s own office has become the new normal. Supporting this, the better-known names in the space include InstaOffice,BHive, Regus, Spaces, and Investopad.
Startups move to Bharat from India: Led by a clutch of successful startups like Hacker Kernel from Bhopal and MacApp Studio from Trichy, the Indian startup ecosystem is going local. Kannur based ArticBot, and Hyero from Kozhikode are some that have been making India proud, and there are many, many such. According to the Commerce Ministry, 44 percent of the startups are from Tier II and Tier III cities today, and the government is undertaking many initiatives under the Startup India policy to address startup issues at every level.