India’s technology startups could command a combined valuation of up to $390 billion by 2025 and generate more than a million direct jobs and indirect jobs in many more multiples, information technology industry lobby Nasscom projected in its annual ‘Indian Startup Ecosystem’ report.
Nasscom also projected that the number of unicorns would be around hundred by that time, aided by active corporate investment and participation. The report cited Mukesh Ambani owned Reliance Industries’ run of investments in several technology companies during the last few months as an indication of things to come.
"The increased pool of startups and their partnerships with large corporates, along with open innovation will see the deep-tech space growth accelerating. Another trend is the broad-based growth of different sectors within the ecosystem with several ‘soonicorns’ emerging in new verticals," said Debjani Ghosh, president, Nasscom.
The report said that deep-tech startups grew by 18% this year as compared with 2018.
A one-third increase in institutional investor interest in the Indian ecosystem will provide an impetus to achieve the Nasscom projection, the organisation added. While there were around 310 institutional investors in the country in 2018, the report estimated the number to be around 390 in 2019.
The report, prepared by Nasscom and technology business advisory firm Zinnov, estimated the number of Indian startups to have grown by 1,300 over the last year to reach around 8,900-9,300. Similarly, the number of unicorns has grown to 24 by the end of August while there were only 17 at the end of 2018.
These startups have generated around 60,000 new jobs in 2019 as compared with 40,000 these firms managed last year. Early stage investments grew to $1.6 billion in 2019 as compared with $1.1 billion in 2018.
"While there was some concern regarding early-stage investments last year, it has picked up this year. We still see some challenges in the seed stage but the angel investment clarification might result in that growing over the next 12 months," Ghosh added.
However, Nasscom said that the government and corporates need to focus on increasing their role as prominent stakeholders playing the part of venture capitalists and providing the appropriate market access, funding, and guidance to seed-stage start-ups for the ecosystem to grow at a similar pace or faster.
"The start-up landscape in the country is becoming the epitome of innovation, with companies bringing out solutions that are aimed at solving locally relevant issues," Ghosh said.