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Analysis and Interpretation

Governments Startup India initiative has certainly made the terms


entrepreneurship and startups well known across India. It has made doing a
startup cool and respectable, and has certainly highlighted entrepreneurship as a
possible career option. On the basis of the study the analysis of this study is as
follows:
India has become the fastest growing ecosystem in the world and if this
all goes well, next year by this time we should be the second largest.

The total value of VC and PE deals in 2014 was $15.2 billion, with the
largest investments in consumer technology, real estate and banking/
financial services/insurance. Likewise, India-based investors prefer to
make a few relatively large investments of around Rs.3 crores to Rs.5
crores rather than spreading smaller investments across a large number of
firms.

Angel investments is emerging but still very limited in India, making up


only 7% of early-stage investment compared to 75% in the US. Innoven's
India Angel Report suggests that median angel round has grown from
Rs.52 lakhs to Rs.138 lakhs from 2014 to 2015, based on 47 angel
investments 19of a total value of Rs.702.5 million in 2015 across the
private equity and venture capital spectrum. While many angels invest
considerably less per deal than that, the lack of early stage funding is
evident given that startups state the major gaps are funding below Rs.50
lakhs.

With over $5 billion worth investment in 2015 and three to four startups
emerging every day, India has paved its way to secure the third position in
the world in terms of the number of startups, 4200 and counting, a growth
of 40%, by the end of 2015.

The latest report by industry body NASSCOM and Zinnov, analyzes the
current scenario and emerging trends across the various dimensions that
define the Indian startup ecosystem, and gauge Indias position as a global
startup hub that is becoming attractive for investors, startups, &
corporates.

As per the statistics given in the report, the number of active investors in
the ecosystem has grown from 220 in 2014 to 490 in 2015, depicting a
2.3X growth. Further, 8 out of every 10 top VC/PE Firms in India are
foreign, and global investment in the Indian economy.
The total funding in 2015 has grown by 125% over 2014. Similarly, the
number of accelerators grew by 40% from 80 in 2014 to 110 in 2015.

The boom in the startup ecosystem has generated employment for around
80,000 to 85,000 people in total. More than 65% of the startups are located
in NCR, Mumbai and Bangalore.

The stats on the demography of the ecosystem says that 72% of the
founders are less than 35 years old making India home to the youngest
entrepreneurs in the world, with gender breakup of 91% male and 9%
female.

Majority of the 1200 new startups are B2C, primarily present in 3


segments namely e-commerce, consumer services and aggregators
followed by hyperlocal, health-tech, edu-tech and analytics.

More than 50 per cent of the 1,200 startups focus on e-com, consumer
services and aggregators; and female founders and co-founders in startup
ecosystem is around nine percent.
The boom in the Indian startup ecosystem has made a conspicuous impact
on certain critical areas such as education, healthcare, employment,
agriculture etc. On the macroscopic level, the ecosystem has contributed
majorly to the Indian economy by enhancing citizens life, building
innovative solutions and generating scope for opportunities for
stakeholders.

Today, India stands as one of the major technology hotbeds offering


fascinating opportunities for emerging companies to thrive and establish
themselves in the world with their innovative ideas and disruptive
approaches

The number of female tech-entrepreneurs has doubled in the last five


years, but the percentage of female founders is only 9%. A study that
surveyed 200 female entrepreneurs in Bangalore reveled that half of the
companies were knowledge intensive and located in office spaces while
only 14% 7focused on manufacturing and 18% were located in industrial
areas.

Sectors with most funding are:

In 2014, 43 startups were acquired; so far this year the number has been
41, with startups themselves being the most acquisitive of the lot. Of the
41, merely two deals were struck by large corporates, with Godrej and
Mahindra & Mahindra as the buyers.
Key Findings of This Study are:
The major growth drivers like large domestic market, access to
capital/mentors, whitespace opportunities and increased M&A activity are
accelerating the start-ups growth. Indian startups, with their unique
solutions, are witnessing increased traction in global whitespace
opportunities such as internet of things, augmented reality, smart
hardware, big data & analytics, cloud computing, etc.

India currently boasts of over 4400+ start-ups and that employ close to
85000 employees. If the landscape continues to evolve at this pace then by
2020 more than 11,500 start-ups would get established in India, generating
employment opportunities for over 250,000 people

Domain solutions emerging Ad-Tech, EduTech and Health-Tech and


other niche solutions emerging for healthcare, agriculture, etc.

Bengaluru and NCR are the top 2 start-ups destinations and


cumulatively these two geographies account for over 50 per cent of the
start-up base. Looking at recent rounds of funding, NCR tops as the
investment destination. Over 59 per cent of start-ups are focused on B2C
categories which is dominated by e-commerce and online marketplaces;
B2B segments are dominated by big data & analytics, ERP & marketing
solutions

Young entrepreneurs dominate the start-up landscape with over 73 per


cent of founders in the age bracket of less than 36 years. Most of these
founders with a strong consumer-centric approach, have come up with
some of the best-in class B2C start-ups. Women entrepreneurs have also
started to leverage the innovation economy.

Scaling up and growth hacking-are key priorities for start-ups. Start-ups


are able to hire best-in-class talent from the industry by offering above
average compensation, stock options, enhanced growth opportunities and
flexible work culture.

Start-ups today have access to multiple sources of funding from VC/PE,


angel investors, banks and financial institutions as well as incubators.
Funding is maturing significantly in deal value and in diversity of focus
areas. Total funding till 2015 in startups is estimated to be $6.5 billion.

The innovation imperative leading to a rise in collaboration and


partnerships product firms with platform players, IT services, global
MNCs, CIOs.

Given the vibrancy in the ecosystem, the M&A activity is on the rise in
India. Acquire-hiring, technology acquisition, market consolidation and
customer acquisitions are the primary drivers for increase in M&A of
Indian start-ups.

While start-ups are betting high on the ecosystem, there is constant need
to nurture this ecosystem. Demand for supportive government policies
(ease of doing business, tax incentives, participation in government
contracts, availability of risk capital, etc.) continue to exist. While the new
government has made the right announcements, there is a need for
directional efforts to see them implemented.

Future of products devices at the edge, logic at the core, fusion of IOT,
SaaS, mobile solutions, data analytics are leapfrog opportunities for India