India’s unicorns are racing ahead despite the pandemic

India’s unicorns are racing ahead despite the pandemic

Indian start-ups showed a remarkable resilience to the chaos of the Covid-19, with the number of unicorns increasing in number.

While the coronavirus pandemic continues to wreak havoc across the world, including India, one sector in the country has produced surprising results – the start-ups.

The Indian start-up sector was also badly hit by the pandemic with nearly 40 per cent of Indian tech start-ups being forced to halt operations. Despite these obstacles India’s start-ups not only managed to stay afloat amidst the crisis but also managed to overcome the odds and come up on top by converting the adversity into opportunity.

According to the NASSCOM Zinnov report titled Indian Tech Start-up Ecosystem – On the March to Trillion Dollar Digital Economy, the Indian tech start-up base is witnessing a steady growth at a scale of 8-10 per cent year on year.

In addition, over 1,600 tech start-ups were added to the ecosystem last year with a record number of 12 new unicorns – the highest ever added in a single calendar year.

So, what led to this leap in success?

Digital boom

While India has been no stranger to digital technology, the pandemic provided the much-needed impetus towards a large-scale implementation. According to the report, digital maturity of Indian enterprise has jumped almost 2X while the internet penetration has expanded to 750Mn+ subscribers.

This boom enabled start-ups to move towards SaaS, tap into both domestic and international markets online and leveraging deeptech to build solutions.

From customising existing innovations to delivering results to rapid experimentations that have shifted founder mindset, a new playbook is emerging for post-COVID world.
From customising existing innovations to delivering results to rapid experimentations that have shifted founder mindset, a new playbook is emerging for post-COVID world.

Innovation and experimentation

Necessity is the mother of innovation and this was certainly true for Indian start-ups. Already well known for their frugal innovations, the pandemic saw the very best of Indian start-ups coming forward with fast, affordable solutions to meet new, increasing and existing demand across sectors.

From customising existing innovations to deliver results to rapid experimentations that have shifted founder mindset, a new playbook is emerging for post-COVID world.

According to the report, collaboration, employee experience, frugality, and global expansion are key to founders today.

According to the NASSCOM Zinnov report: ‘Employee experience is now as important as customer experience, collaboration is becoming mainstream, and public partnerships have received a new lease of life altogether. The shift in playbook has created more optionality and we are a step closer in defining “Indian Way” of building fast-growing innovative companies.’

The power of partnerships:

The pandemic, disruptive as it’s been, has also given impetus to the benefits of collaboration and partnerships. According to the report peer-to-peer collaborations have intensified leading to fast and effective knowledge transmission. Nearly 66% of founders are now exploring partnerships as a post COVID-19.

The Indian corporate sector also played a huge role is extending a much-needed lifeline to Indian start-ups which proved crucial to the sector building resilience.

Investment

The start-up sector struggled initially in terms of funding, witnessing a significant drop in the Apr-Jun period, due to global lockdown. However, ss markets stabilised and start-ups leveraged tech, funding started flowing in with investments in H2 2020 were more than double of H1 2020.

Indian start-ups recorded a total funding of $11.5 Bn, which is just 10% lower than 2019. In fact, according to Inc. 42’s Indian start-ups, this year (2021) are estimated to record a total funding amount of $13.7 Bn across 1,044 funding deals.

Investment

The start-up sector struggled initially in terms of funding, witnessing a significant drop in the Apr-Jun period, due to global lockdown. However, ss markets stabilised and start-ups leveraged tech, funding started flowing in with investments in H2 2020 were more than double of H1 2020.

Indian start-ups recorded a total funding of $11.5 Bn, which is just 10% lower than 2019. In fact, according to Inc. 42’s Indian start-ups, this year (2021) are estimated to record a total funding amount of $13.7 Bn across 1,044 funding deals.

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