February 16, 2023
India maintains its position as the world's third-largest tech startup ecosystem after the US and China
In 2022, India added the second-largest number of unicorns globally
2022 also saw significant investment in non-unicorns and unique startups
Tech startups are expected to continue to increase innovation and deep-tech adoption
India added more than 1,300 active tech startups in 2022, increasing the total number of active tech startups to 25,000-27,000, according to a report by the National Association of Software and Services Companies (Nasscom) in collaboration with Zinnov.
The report stated that India maintains its position as the world’s third-largest tech startup ecosystem after the US and China. In 2022, India added the second-largest number of unicorns globally, with over 23 added. Additionally, the report highlighted that the potential pipeline of unicorns increased to over 170, growing at a pace equivalent to 2021.
Despite a decline in total funding of 24% compared to 2021, annual investments of US$ 18.2 billion in Indian tech startups were higher than the pre-pandemic levels of US$ 13.1 billion in 2019. According to the report, 2022 also saw significant investment in non-unicorns and unique startups, with almost 1,400 unique startups receiving funding, which was 18% higher than in 2021. Early-stage and seed-stage investments also grew between 25-35% last year compared to 2021, with tech startups in the seed stage securing 1,018 investments.
The report mentioned that late-stage investments had a decline of 41% in deal sizes greater than US$ 100 million, mainly due to a considerable correction in global public markets.
Nevertheless, the ecosystem’s maturity was noteworthy, with founders prioritising profitability overvaluation and investors showing trust, despite macroeconomic variables.
The report also stated that tech startups are expected to continue to increase innovation and deep-tech adoption, particularly in areas related to SDGs (Sustainable Development Goals) that require complex solutions.
Experts mentioned that even with current challenges, innovative companies can leverage emerging technologies to create actionable impact by prioritising business fundamentals.
Source: Economic Times