India, which is in a technology race with China, has a mission for its startups and unicorns to emerge as global giants and lead in futuristic technologies, by building a startup ecosystem which functions on ‘of the youth, by the youth and for the youth’ mantra writes SYBIL RODRIGUES
Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large-scale employment opportunities. The initiative aims to empower startups to grow through innovation and design. The initiative shifted the focus from major industries to startups and catalyzed the Indian startup ecosystem. This has helped Indian entrepreneurs build innovative solutions for Indian and global needs. Since the launch of the initiative, several programs have been undertaken to contribute to the Prime Minister’s vision of transforming India into a country of job creators instead of job seekers.
‘Startup India’ was launched on 16th January 2016 by Prime Minister Narendra Modi, with an objective to build a strong ecosystem for nurturing innovation and startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Indian startup ecosystem today is counted amongst the world’s largest startup ecosystems and is growing at an unprecedented rate, contributing to the innovation driven growth for the Indian economy. It has been 5 years since the launch of Startup India initiative, and this has played a pivotal role in spurring the spirit of entrepreneurship in every corner of the country.
PM Modi announces Rs 1000 startup fund to push growth of ventures
Prime Minister Narendra Modi launched a Rs 1000 crore startup seed fund at Prarambh: Startup India International Summit. This fund aims to help launch and grow new-age ventures with the initial capital for growth and operations. The two-day summit, marking the fifth anniversary of the Startup India initiative, brought together innovators, entrepreneurs, investors regulators, industry leaders, and academicians from India and across the world including BIMSTEC countries.
“Prarambh was an excellent summit. It provided a good view to the startups on all issues from the top practitioners. The summit attracted around 1.5 Lakh registrations.
The startup seed fund announced is a good start. However, it should be increased once this is utilised. The credit guarantee scheme is really welcome as startups have trouble getting credit as they don’t really have assets on the ground” AJAI CHOWDHRY, Founder, HCL
“To ensure that our startups don’t fall short of funds, our country has taken a lot of steps. In this series, I want to make another important announcement today at this event. To help startups get initial funding, the country will launch a Rs.1000 crore Startup India Seed Fund. This fund will help in setting up new startups and aid them in growth,” the Prime Minister said while speaking at the Prarambh Startup India International Summit in an online address.
“Going ahead, the government will provide guarantees to help startups raise debt-capital. We are trying to build a startup ecosystem which functions on the ‘of the youth, by the youth, for the youth’ mantra,” the Prime Minister elaborated.
During the address, Modi stated that the target for India’s startups over the next five years should be to become global giants in their respective service areas. The PM also said that future technologies and entrepreneurs should come together in Asia, urging Asian countries to join hands, collaborate and take responsibility for leading this effort.
As many as 1,20,000 registrations took place on the first day of the summit, which was inaugurated by Commerce & Industry Minister Piyush Goyal and hosted dignitaries and stakeholders from BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) member States. The Prime Minister also interacted with the founders of startups from BIMSTEC nations. BIMSTEC is an international organisation of seven nations of South Asia and Southeast Asia, housing 1.5 billion people and having a combined GDP of $3.5 trillion. The BIMSTEC member states include Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.
“Our startups should lead in futuristic technologies. If all BIMSTEC countries push for this, a large population would benefit from this,” the Prime Minister added.
“The Indian startup ecosystem has made big progress in the last five years and I hope this will usher in a new beginning, showcasing various aspects of the startup world” PIYUSH GOYAL, Union Minister of Commerce and Industry
Modi said that there is a huge change in terms of how young ventures are perceived and these changes are a major strength of BIMSTEC countries. He said this is the century of the digital revolution, new-age innovations and is also called the ‘Century of Asia’. And therefore, it is the need of the hour that the future technology emerges from the labs of Asia and entrepreneurs from this region. For this, the countries of Asia will have to come forward and assume responsibility, who can work together and for each other and have a sense of co-operation. He said the responsibility falls to the BIMSTEC countries. This is because centuries-old relationships, culture, civilization, and common heritage of relationships have kept these nations together.
“The vision of Hon PM Narendra Modiji and the implementation by the Startup India team has led to India becoming the 3rd largest startup ecosystem in the world already. We are now home to 30 unicorns. 40% of startups come from Tier 2 and Tier 3 cities, leading to job creation across Bharat. Startups and this culture of innovation have a multiplier effect on the economy. The recent announcement of the `1000 crore seed fund will help new startups. Hon Minister for Commerce and Industry Piyush Goyalji hosting the Global VC round-table late at night to make it convenient for global VCs shows the pragmatism. The future is bright for startups, the youth, and the nation” SHRINIVAS DEMPO, Chairman, Dempo Group of Companies
The PM noted that BIMSTEC countries were collaborating for promotion of startups in line with their co-operation in other areas such as digital connectivity, space, agriculture, environment and defence. “The more our startups will be strengthened, the more our economies will prosper,” Modi affirmed.
These collaborations would support startups and be beneficial for the entire sector. Sharing the 5-year experience of how young ventures have evolved in the country, Modi said India today is one of the largest startup ecosystems in the world. The country has more than 41,000 startups working on different missions. There are nearly 5,700 startups in the IT sector, 3,600 in the health sector, and 1,700 in the agriculture sector. He said these firms are changing the demographic character of business. In 2014, there were only 4 startups in the unicorn club in the country. But today more than 30 ventures have crossed the $1 billion valuation mark. “You would be surprised to know that, 11 startups have joined the unicorn club in the year 2020, amid the difficult year of the coronavirus pandemic,” exclaimed the Prime Minister
“Startups truly democratize entrepreneurship. Anybody can be an entrepreneur and startup capital and stair mentors are key parts of making this happen. 1000 crores announced by PM Modi is a good start but the bigger opportunity is to get the people of India to also start looking at startup investment and angel investment as an asset class. Imagine if 10% of the stock market capitalization went into angel investment. We would have a tsunami of startups and that would be a good thing” VIJAY THOMAS, CEO, Tangentia
The country started the ‘AatmaNirbhar Bharat’ (self-reliant India) campaign at a difficult time during the pandemic, with small ventures playing a big role. “During the pandemic, when the worlds big companies were struggling for their survival, a new army of startups were coming up in India,” said Modi.
These firms played a big role in the country, from addressing needs ranging from providing sanitisers, PPE (personal protective equipment) kits to building the supply chain. They catered to the local needs such as delivering kitchen essentials and medicines to the customers, providing transportation to frontline workers, and preparing online study materials for students. “These startups discovered opportunity in disaster and also built confidence amid calamity.”
Today, the success stories of new ventures are not limited to big cities. Many of them come from small cities and towns such as Lucknow, Bhopal, Sonepat, Kochi, and Thiruvanthapuram. He said about 80 per cent of the districts of India have joined the startup movement. Around 45 per cent of startups today come from tier-2 and tier-3 cities, acting as brand ambassadors for local products. There is also a huge awareness among people related to health and consuming healthy food. The Prime Minister said special growth is being given to the growth of the food and agriculture sectors in India. The country has also created an ‘Agri Infra Fund’ of Rs 1 lakh crore to modernize the infrastructure related to agriculture. This has opened up new avenues for small companies. Today, these firms are collaborating with farmers. Startups are also playing their role in delivering food products from farm to table, with better quality.
“As part of the Startup India programme, the government set up a fund of funds (FoF) with a corpus of INR 10,000 Cr, and the entire amount was planned to be disbursed by March 31, 2025. Until now, more than 41K Indian startups have been recognised by the government and only 10% of the entire courpus is disbursed. Despite the slow disbursement and the pandemic-led disruption, 11 startups turned unicorns in 2020, with over 30 startups in India today valued at over $1 billion. Prarambh is an awesome initiative. I hope the Goa Government stands committed to the IT and Technology industry which makes up the major chunk of Goa’s startup ecosystem” MANGIRISH SALELKAR, President, Goa Technology Association
Modi further added that whenever a new challenge comes in any field; startups come forward and say that they will solve those challenges. India is also working with this startup spirit. “Today, the country says that ‘we will do it’, “Be it digital payments, the solar energy sector, or AI (artificial intelligence) revolution,” the Prime Minister claimed with pride. Modi said that the biggest USP of the startup world is its diversification capacity and that it is guided more by passion than pragmatism. He cited the example of BHIM UPI which has revolutionised the payment system and last December, 4 lakh crore transactions took place through UPI in the country. Similarly India is leading in the solar and AI sector. The PM said that the startups are changing the demographic characteristics of businesses. Citing data, he said that 44% recognized startups have women directors and number of women working in these startups is only growing.
“The global stage is available for our startups and when we begin with our neighbourhood, invite startups from other countries in South Asia to engage with startups in India, we are going beyond government-to-government collaboration, and business-to-business or business-to-consumer engagement to a startup-to-startup collaboration,” said Piyush Goyal, Minister of Commerce and Industry.
“Terming the 21st century’s as ‘Asia’s Century’ wherein startups are going to play a special role in the digital era, the government is betting on the youth and startups to make a difference in the world by becoming global giants. Supporting startups with seed funding by committing 1000 crore is a giant step to achieve this” D S PRASHANT, CEO, Forum for Innovation Incubation Research & Entrepreneurship
The new seed fund for startups comes after the Ministry of Electronics and Information Technology had last year initiated a similar fund to identify startups and provide them financial help. In August, the Ministry had launched a fund to identify 300 startups which would be provided seed fund of up to Rs 25 lakh and other facilities as well. A budget of Rs 95.03 crore has been earmarked for the programme named ‘Chunauti’, to be utilized over a period of three years. The IT Ministry’s programme seeks to award startups in the fields of edu-tech, agri- tech, supply chain, logistics, and transport management, as well as medical healthcare, diagnostics, preventive and psychological care, among other areas.
“The Start Up India initiative has accelerated many startups and built a strong ecosystem for innovation and entrepreneurship in our country. The 1000 crore startup funding and Prarambh initiative, the largest startup confluence, will definitely script new chapters in India’s efforts towards becoming Atmanirbhar” ROHIR NAIK, Founder & CEO, Coderix
Apart from these seed funds, the Ministry has, over the last year, also conducted several other competitions to award startups working in several areas, such as video-conferencing, artificial intelligence, among others.
Last July, the Ministry of Information Technology had launched a challenge inviting Indian developers to come up with apps in a range of segments such as office productivity, social networking, e-learning, and news, games, health and wellness, agri-tech, fin-tech and entertainment, and speech translation, among others. A different challenge launched in April last year, which sought a world class video-conference solution, which could be an alternative to global apps such as Zoom, saw Kerala-based Techgentsia Software Technologies win a prize money of Rs 1 crore.
Modi also said that small firms are getting an opportunity at par with large businesses in government tenders on the GeM (Government e-Marketplace) portal. Till now, nearly 8,000 startups have registered on the GeM portal and carried out business worth about Rs 2,300 crore. The Prime Minister emphasised that the total business generated through GeM portal is touching nearly Rs 80,000 crore. “In the future, the share of startups in this would increase.”
The Government’s announcement of the Startup India Seed Fund is certainly good news for the startup ecosystem. With India and the BIMSTEC nations working together as partners, it will undeniably help take the world out of the dark period of the pandemic into a golden new era
The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India organised ‘Prarambh’-Startup India International Summit, in a virtual format.
‘Prarambh’ brought together top policy makers, industry, academia, investors, startups, and all stakeholders from across the globe. In addition to deliberating on good practices from the best of ecosystems across the world, the sessions of the summit were designed to showcase the spread and depth of entrepreneurship based on innovation in India. The idea behind the whole summit is to attain attention of global capital for startups in India, mobilize domestic capital, provide opportunities for accessing international markets for local startups and evolve enabling policy provisions.
• Encouraging and inspiring the youth for innovation and entrepreneurship
• Exchange knowledge on best practices on nurturing startup ecosystems
• Develop capacities of entrepreneurial ecosystem
• Mobilize global and domestic capital for investments into startups
• Provide opportunities to startups for entering domestic (private and public) and international markets.
• Showcasing high-quality, high technology and frugal innovations from India
• Enable ease of doing business for startups and investors