Except the pandemic year, the funding inflow into the Indian startup ecosystem has consistently remained above $10 billion every year since the Startup India initiative was launched in 2016.
Over the last nine years, the Indian startup ecosystem has made great strides, becoming the third-largest ecosystem in the world. Since the launch of the Startup India mission on January 16, 2016, which aims to transform India from a nation of job seekers to a country of job creators, Indian startups have raised around $131 billion in funding, according to YourStory Research, turning the country into an innovation powerhouse.
Also, since 2016, Indian startups have consistently secured more than $10 billion in annual funding. While the total funding raised in 2016 was $3.8 billion, it dramatically increased to $13.5 billion in 2017. This was the year when SoftBank turned on the tap and poured capital into companies such as Flipkart, Ola, Paytm, and OYO.
The other prominent change over the last nine years has been the ballooning number of deals. Since 2021, the number of deals each year has averaged over the 1,000 mark, an improvement from an average of 800 in the previous four years. Funding for Indian startups also had its ups and downs. Over the last nine years, it touched a high of $32 billion in 2021 but never sunk below $10 billion, except in 2020, when the pandemic dampened the total funding to $9.9 billion. According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), the number of recognised startups has crossed one lakh. In 2016, 30,000 recognised startups touched 1.25 lakh as of March 31, 2024.
Although startups are dominated by the country’s top metros, their roots have spread to other locations, especially in Tier II and III locations. According to DPIIT, over 670 districts have at least one startup. According to the Startup India portal, this ecosystem has created more than 12.42 lakh jobs. The government of India has also developed funding schemes to support startups.
The key one among these is the Fund of Funds Scheme, managed by SIDBI. It has disbursed Rs 10,805 crore to alternate investment funds (AIFs), which invested Rs 18,000 crore into 1,030 startups. Over the last nine years, the Indian startup ecosystem saw over 100 unicorns, i.e., startups valued at $1 billion and above. However, the ecosystem has lost momentum over the last year. However, this has been adequately compensated by another vital benchmark, as most startups become publicly listed companies. The year saw 13 startups getting listed on the Indian stock exchanges.
