Indian Tech Start-up Ecosystem Study

What’s in the news?

NASSCOM (Indian non-governmental trade association) and Zinnov (a management consulting firm) have released a new study titled ‘Indian Tech Start-up Ecosystem: Year of The Titans’.

Highlights of the Study

- Start-ups raised a record $24.1 billion in 2021, a two-fold increase over pre-COVID-19 levels.
- More that 2,250 start-ups were added in 2021, over 600 more than what was added in the previous year.
- In comparison to 2020, there was a three-fold increase in the number of high value deals (deals > USD 100 million), demonstrating investor confidence with a pool of active angel investors of 2400+ and a readiness to take significant risks.

An angel investor is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. Angel investors usually give support to start-ups at the initial moments and when most investors are not prepared to back them.

While the U.S. remains the leading source of foreign direct investment (FDI) in start-ups, worldwide involvement is also growing. About 50% of the deals had at least one India-domiciled investor.
In the last decade, the ecosystem has played a key role in growing direct and indirect jobs, providing 6.6 lakh direct jobs and more than 34.1 lakh indirect jobs.
The industries that saw the most net new job creation were BFSI (banking, financial services and insurance), ed-tech, retail and retail tech, food-tech, supply chain management, and logistics and mobility.
On the back of Internet commerce, freelancers, and service industries, indirect jobs have also recovered.
When compared to the U.K., U.S., Israel and China, 2021 has been an outstanding year for the Indian startup ecosystem, with the highest growth rate in terms of deals, both in seed stage and late-stage funding, and the number of startups.

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