In one of our earlier blogs, I had talked about the top reasons why Indian startups fail, where I had cited that around 1000 startups have died in the past 2 years – that amounts to about 40% startups that were set up in the same period of time.
Surely, this is one of the key trends in recent times, which should be a reason for anxiety among entrepreneurs, and startup enthusiasts in the country. However, on further scrutiny and research, there are some other serious trends in the startup arena, at which startup aficionados should take a keen look at.
Let’s take a deep dive into 5 of the freshest trends that the Indian startup landscape are observing at present, and which can shape the realm in times to come.
- India is the 3rd Largest Startup Hub
I know the data is overwhelming, but you read that right, and we are not exaggerating any bit of it! According to Grant Thornton, India ranks among the top 5 countries, in terms of the number of startups – with a figure of over 10,000, out of which almost 800 startups are formed annually. Moreover – 4,300 out of those 10,000 startups (43%) are technology based ones, which is only slated to increase to 11,500 by the year 2020. Also, majority of the startups or its investors are from metro cities. The state of startups in the country can also be safely termed as young, as 28 years is the average age of startup founders. Woah! Those are some pretty impressive facts, which in all probabilities will give many a spike in adrenaline.
- India also Takes the 3rd Spot in Tech Startups Exits
In the first six months of 2016, India saw the 3rd highest number of tech startup exits, according to CB Insights. As a result, India witnessed 86 M&A’s among startups, down from 96 during the second half of last year. These exits took place the most in the mobile space – constituting 28% of the overall tech startup exits. This figure stands the highest among the top 5 countries in the world. One of the chief reasons why these exits are happening at lower valuations, is due to a funding slowdown. Some venture capitalists are of the view that a higher number of acquisitions is actually good for the startup ecosystem in India. Well, only time knows the correct answer!
- Average Investment in Indian Startups has Shot up Like Crazy!
In the year 2015, the average investment size in Indian startups stood at a momentous $2,213 million. This was a yearly growth of 153% over the period of 2013-15, as compared to 2011-13. What is more important to note is the last 2 quarters of 2015 witnessed the maximum investments. The average valuation of startups is $2.3 million in India, and 3/4th of the total investment goes to startups that are present in NCR and Bangalore. These two cities have also recieved more Series A funding than others, which means more upcoming Series B funding. NCR is the king when it comes to e-commerce startups, while Bangalore holds the crown for most enterprise startups.
- Mobile-First Strategy Has to be the Way Forward
There is no denying the fact that mobile is the way forward for all startups and emerging businesses. This means all brands have to treat mobile as the primary mode for customer engagement – now and in the times to come. This holds true especially in India because there has been phenomenal growth in mobile data in the country, as divulged by Google – 245 million mobile data subscribers, out of which 145 million are on 3G, while 5 million are using 4G. Plus, the intensity of smartphone usage has also observed a steep climb this year – the smartphone user base stands at 250 million, growing at a massive 50%. Above everything else, mobile data usage in India is absolutely staggering – the average mobile data consumption of an Indian is 700 MB/month.