DPIs drive 100X surge in number of Indian startups, unlocks $100B value: Redseer
DPIs play a vital role in enabling the creation of new business models, with healthtech, agritech, and insurtech startups poised to benefit the most, the report noted.
The democratised digital ecosystem, fuelled by Digital Public Infrastructures (DPIs), has sparked a remarkable surge—over 100X—in the number of Indian startups from 2016 to 2023. This growth reflects the adept utilisation of open frameworks to propel market innovation and create substantial business value, according to a report.
DPIs share a symbiotic relationship with the startup ecosystem, contributing over $100 billion in value across various sectors of the Indian internet economy, as per the report titled ‘The Impact of DPIs on the Indian Internet Economy’ launched byStrategy Consultants in collaboration with Nandan Nilekani, Chairman and Co-founder of , and Founding Chairman of .
“While the role of DPIs in governance is well understood, DPIs have also had a transformative impact on the Indian startup ecosystem and created tremendous value for the startups, employees, consumers and funds,” Nilekani highlighted in the report.
Critical to the growth of the startup ecosystem across sectors, DPIs play a vital role in enabling the creation of new business models, with healthtech, agritech, and insurtech startups poised to benefit the most.
DPIs like eKYC and UPI have played a pivotal role in the expansion of Indian startups, facilitating customer onboarding, verification, and seamless payments.
Embracing the digital and public attributes of DPIs, startups have swiftly adopted and leveraged these infrastructures to introduce innovative services, implement cost-effective process changes, and extend their services nationwide, allowing them to scale rapidly and often surpass traditional players in their respective sectors, according to the report.
Indian startups have achieved a cumulative valuation surpassing $600 billion, securing the position as the world’s third-largest unicorn hub with 108 startups, behind only the US and China. About 30% of these unicorns are already profitable, with an additional 40% progressing toward profitability.
The continued democratisation of DPI technologies can efficiently aid startup growth in the country, the report noted.
The big picture
Since the Aadhaar era, India’s DPI landscape has made significant strides, granting a digital ID to 97% of the population, facilitating Direct Benefit Transfers to 900 million beneficiaries, and providing banking access to 40% of the 1.2 billion population, as per the report.
Beyond the JAM trinity—Jan Dhan, Aadhaar, and Mobile, the DPI landscape now encompasses initiatives like Ayushman Bharat Health Account (ABHA), DigiLocker 2.0, Open Network for Digital Commerce (ONDC), Account Aggregator (AA), and Digital Infrastructure for Knowledge Sharing (Diksha), among others.
Aadhar, streamlining e-governance, played a pivotal role in achieving one billion COVID-19 vaccinations in 9-10 months and facilitating Income Tax filings. eKYC procedures reduced the time for Demat account creation and enabled 75% of loan applications from remote areas. UPI, with 70% of users from beyond Tier-I demographics, is anticipated to lead 90% of payments by 2027.
Going forward, ONDC emerges as a potential disruptor set to democratise ecommerce across sectors, with a projected Gross Merchandise Value of $250-300 billion by 2030, the report noted.
As the Indian internet economy is expected to hit $1 trillion by 2030, DPIs are positioned to sustain a crucial role in democratising this growth, ensuring a digital future that is both inclusive and expansive.
Edited by Kanishk Singh