Indian Startup Ecosystem: Is Everything Going Good?

Indian Startup Ecosystem: An overview

Even with the initial downfall, 2021 proved to be an amazing year for Indian startups as they raised $42 billion, up from $11.5 billion in 2020.

And looking at 2022, startup funding crosses $12 billion in Q1 creating 14 new unicorns in India!

Here is a graphic showing the comparison between January 2022, 21 and 2020

It’s crazy that many national and international agencies claimed that India will create over 100 new unicorns in 2022!

The top 5 takeaways from 2022 Q1 (Current Scenario):

1. India  is the fastest-growing startup ecosystem in the world after the USA
2. India’s growth story continues to be robust with real GDP is estimated to grow by 9 percent in FY22 vs. global growth of 4.4 percent in 2021 (World Bank estimates)
3. Unicorns built in India included 58 global cloud companies, 59 B2C ( business to consumer) companies, and 13 B2B ( business to business) companies. 
4. With numerous IPOs in the past 15 months, the Indian stock market initially attracted both retail as well as Indian and global institutional investors.
5. E-commerce and Consumer platforms were the top-funded sectors

So, is everything going well with the Indian Startup system?

The answer is No,

Last week Meesho joined the Indian Startup #layoff streak.

7 Big #startups have decided to take the layoff route for the sake of 'cost-cutting' in the past 2 months -

Source - Moneycontrol and BusinessWorld

And this may just be the beginning. Startups that hired heavily during the pandemic might find themselves overburdened on the costs and will have to cut down significantly to appease investors.

We at Appinventiv certainly knew that the market is going to be very fragile and hired according to the market requirement since the pandemic started. We are proud to not have done any layoffs since our inception.

But the recent layoffs (since the pandemic) will certainly cause a hiring crisis in startups as people will fear joining startups due to layoffs and pay cuts.

But that's not all. Frequent cases of founder fraud are also now emerging - BharatPe, Xiaomi, and Zilingo as well to name a few.

These are companies backed by big investors like Softbank, Sequoia, and other major players. Softbank's Masayoshi Son recently told the top leadership of the group to go slow with tech investments.

Book Recommendation of the week

The Manual for Indian Start-Ups: Tools to Start and Scale-Up Your New Venture

Vijaya Kumar Ivaturi