Startups in India saw a 108 percent growth in total funding from $2 billion in 2017 to $4.2 billion this year, National Association of Software and Services Companies (NASSCOM) said Thursday. The worrying factor, however, was the decline in funding for companies at the seed stage, NASSCOM said.
“India is becoming a startup hub. Opportunity for growth is enormous, which we had never seen in our lifetime. Challenge is how fast a company wants to transform,” NASSCOM president Debjani Ghosh said.
She was speaking to reporters at the launch of NASSCOM report on the ‘Indian Start-Up ecosystem – Approaching Escape Velocity’ on the sidelines of the 15th-anniversary edition ofNASSCOM’s Product Enclave-2018 in the city. More than 1,200 startups came up in 2018, including eight unicorns, taking the total number to 7,200 startups, NASSCOM reported.
However, the seed stage funding of Indian startups has declined from $191 million in 2017 to $151 million in 2018. “In terms of overall funding, it is a good story. However, we are seeing a continuous decline in seed stage funding of startup companies. If you fall at the seed stage, innovation is hit.
It is the area, which needs protection,” Ghosh said. The report said there was a 50 percent increase in a number of advanced tech startups since 2017. According to it, the startup ecosystem has regained momentum after the slowdown in 2016-17. These companies created 40,000 new direct jobs while there was three-fold increase in indirect jobs.
“Post 2017, investment into startups has increased by over 100 percent, from $2.03 billion in 2017 to $4.2 billion in 2018. The total number of startup funding deals, especially in the late stages, witnessed a massive growth of around 250
The key growth drivers were enterprise software, fintech, healthtech marketplace and edutech. Data analytics, Artificial Intelligence and IoT startups have been witnessing fastest adoption across industry verticals.
There was 120 percent funding growth for AI startups with $150 million investments made in this field in 2018. The report said more than 400 plus startups expanded globally including travel and hospitality company Oyo, cab aggregator Ola, edutech Byju’s, Zomato and Wittyfeed.