India has potential to create more than 100 unicorns by 2025, says Nasscom report
Home to more than 9,000 technology startups, India has the potential to create more than 100 unicorns – private companies with a valuation of $1 billion and above – in the next five years, according to industry body Nasscom.
The National Association of Software and Services Companies (NASSCOM) in its report – Indian Tech Startup Ecosystem – Leading tech in the 20s, stated that by 2025 it is expected that the country will have around 95-105 unicorns, enjoying a cumulative valuation of $350-390 billion.
“We are on a strong growth trajectory,” said Debjani Ghosh, President, Nasscom.
According to Nasscom, India currently has around 24 unicorns and seven were added till September this year, and the expectation is that another two to three will be added to the list by the end of 2019.
On the global scale, India stands third behind the US and China in the number of unicorns.
The Indian startup ecosystem remains vibrant with addition of over 1,300 such firms in 2019, taking the total number in the range of 8,900-9,300, according to the Nasscom report.
The investment in Indian tech startups was steady with the infusion of $4.4 billion between January and September this year as compared to $4.2 billion in 2018. Funding also saw a huge spike at the early stages (Series A, B), with $1.6 billion being recorded at 70 percent Y-o-Y growth. The trend witnessed over the year was that startups are driving focus more towards the B2B space and almost half of the country’s startups are offering enterprise focused services.
However, the Nasscom President admitted there were still some challenges in the seed stage of funding.
The heartening element in the growth of tech startups in the country has been those companies which are focused on the deep tech segment. The deep tech startups witnessed a growth of 18 percent over the last one year.
“Over 18 percent of all startups are now leveraging deep-tech, which means there are over 1,600 such companies in India. This number constituted only eight percent of startups incepted in 2014, and has seen a CAGR of 40 percent over the past five years,” the Nasscom report said.
Though Debjani felt that for the deep tech startups to flourish in the country, there is a need for certain structural intervention from the government which can stimulate the growth of these entities.
According to the Nasscom report, startups have created more than 60,000 direct jobs this year with 1.3-1.8 lakh indirect employment during this year.
The country has over 335 active incubators and accelerators with a capacity to enable over 5,000 startups every year. More than 65 percent share of incubators and accelerator programmes were added in the last five years, out of which 57 percent are active outside Tier I cities.
(Edited by Megha Reddy)