We have been experiencing the startup craze in the country since a long time now. With the zeal of solving a problem or be “different”, new startups are popping up every day. The startup journey so far has not been a bed of roses. With a number of lay-offs and repeated devaluations, even the maturity of investments is put into question. People, instead of being curious about the opportunities in startup, are now more curious to know if it is going to burst. Is there any bubble that is forming silently which is ready to burst in the near future?
While most of the startups in India start their journey from Bangalore, it is not a hard and fast rule. But at least we will have to agree that when an entrepreneur is given a choice, s/he will not choose any city other than Bangalore to build his/her startup. While this may be apparently true because Bangalore has always been compared to Silicon Valley, the scenario is taking a completely different turn.
Delhi has been successful to beat Bangalore and Mumbai to top the list for starting new ventures, consumer Internet and e-commerce being the most popular segments. In fact, tier-II cities like Kochi, Indore, Bhubaneswar, Ahmedabad are brimming with major startups of today’s era.
Also, other metropolitan cities like Hyderabad, Mumbai, Chennai, Kolkata etc are giving a neck to neck competition to Bangalore. While Chennai startups are more specifically related to SaaS, Hyderabad is encouraging more tech startups to come up. Mumbai is also not lying behind. Cloud/SaaS startups in Mumbai boast to have raised $2516.42 million in the last 5 years altogether. Read more about the startup opportunities in these cities here.
The “Indian Startup Outlook Report 2016’ released by InnoVen Capital”, a venture debt and specialty lending business, has come up with some proven results to catch our attention.
Opportunity for employment
Unemployment has been a problem in India since time immemorial. This is one of the major reasons why startups are gaining popularity. Startups are a new hope of the Indian youth which can disrupt the present situation to a major extent. A study has also found out that 130 startups are expected to create more than 5000 jobs in the next 12 months. About 97 per cent startups felt they were likely to hire new employees, with an average 28 per cent on the technology front.
Government Initiatives
Our Indian government is also not lagging behind and have mingled with the trend quite well. Policies, on behalf of building more startups are popping every day. With initiatives like “Startup India Standup India”, the startup ecosystem is gaining momentum in the right side of the curve. The InnoVen study found that 65 per cent of all companies felt current business and political conditions are better than last year and 76 per cent expect next year to be even more favorable for startups.
Challenges and Appeal
The health of the startup ecosystem is improving day by day and it seems that it is living purely on a balanced diet. Challenges and appeal are the two matrices which prove the above stated point. Regulation, human capital and taxation have emerged as the major challenges in the startup ecosystem. On the other hand, the favorability of starting a new venture is supported by things like cost of doing business, size of the market and the proximity with customers and vendors.
Startups funding
A report also says that in FY 2016 more than 50 per cent of bootstrapped startups and 45 per cent of angel-funded startups are expected to turn profitable, whereas only 22 per cent of VC-funded companies are expected to turn profitable. Challenges like taxation and regulation won’t be able to stop startups to raise funds. Devaluations have also proved to be a major challenge for startups recently.
All these facts and figures are an indication to just one thing- The curve is on the positive side and it is growing exponentially. It is sure to create more employment opportunities in the coming decade by solving major problems existent in the country since a long time. Moreover, the support from the government is like a cherry on top of the startup cake.
So, I would conclude saying that these might look like an opportunity for major celebrations; the fact is we are a long way to go. It is not just Bangalore but the whole country which has been affected by the startup virus. Startups just need to see opportunity in their idea and themselves and not in the city they belong to.
Hard work won’t pay off so early and startups need to get more serious about their functionalities. They should take full advantage of the scenario and boost their productivity in the right direction so as to eradicate the challenges and worse cases like layoffs.
