More than 80,000 startups are currently have been registered with the Union government
Goyal stated that Indian startups directly engage more than a million people directly and engage’many millions more indirectly
The amount of funding for the first three quarters of CY22 is down more than 20% , to $21.7 Bn. This is down from $27.3 Bn for the same time frame last year.
In announcing homegrown startups, Union Minister PiyushGoyal stated it was the Indian startup ecosystem is currently valued at about three INR Lakh Cr.
“…the the fact that we’re probably 110+ unicorns, around 75 or so youngicorns who are on the journey to becoming unicorns, is truly an amazing feat. The last time we conducted an assessment of the startup ecosystem it was about USD 368 billion. This is more than 3 lakh crores of rupees” the CEO was quoted by the news agency PTI.
He also stated there were more than 80,000 startup companies are currently registered with the government.
Goyal made the remarks while in front of a crowd of faculty members, students and alumni of the Indian Institute of Foreign Trade (IIFT), National Institute of Fashion Technology (NIFT), National Institute of Design (NID) and other.
In announcing that Indian startups were ‘directly involved’ with more than a million people Goyal added that “many millions more’ were involved indirectly in the entire ecosystem of startups.
He also stated that the government was seeking to strengthen patent offices and embark on a digitalisation campaign to ensure that all services are available online. He also spoke about the various initiatives being taken by government officials to support entrepreneurs across the country.
Far From Reality?
The comments of Goyal occur at a particularly moment in the life of Indian startups. Although India has the highest quantity of unicorns overall situation seems to be somewhat gloomy. In 2022, which began with a rousing celebration, looking to build upon the success of 2021, it hasn’t been quite as positive.
Although the Indian startup industry has produced record-breaking number of unicorns during 2021 but the count is (with 10 months to go) at just 21 in the first ten months of 2022. While 13 startups ascended to the impossible billion-dollar valuation during the first quarter of the year, the number dropped to just a third (4) in the second quarter of the CY22. Third quarter in 2020 calendar also witnessed only four startups become unicorns and pointing out the lack of investment made from Indian startups.
Funding figures have also slowed by a significant amount to $21.6 Bn during the beginning of the fiscal year 2022 in comparison to $27.3 Bn for the same time frame last year.
Starting with the first quarterof 2018, funding figures have steadily decreased in the subsequent quarters, signalling an steady decline of the Indian startup market. This is due to the cash shortage and tightening of monetary policies around the world the so-called winter of funding has seen companies put off expansion plans in order to keep cash in reserve.
The Indian startup scene is also shattered by massive layoffs. To increase profit, these startups have embarked on a spree of firings, and already ended the employment of over 15,200 employees.
A lot of these startups have been accused of not having a clear pathway to profitability, and also for having a high costs for cash. As the number of losses increase and the cost of acquiring customers increase the startups are forced to search for a boat to get them to get them out of the choppy waters.
While the government is praising its success, a number of startups have closed down and shut up operations, such as edtech giants Crejo.Funand Udayy, and the celebrity-engagement startup GoNutsamong other. Other startups , like BYJU’S has shut down its operations by closing its offices in more than 60 cities across the United States.
If this wasn’t enough, some players like Droom as well as PharmEasy have canceled plans to list on the market in the midst of market volatility that has scared investors and erased an enormous amount of investor wealth.
Despite the worldwide headwinds, Indian startups continue to progress. India is currently ranked third in the world when it comes to how many unicorns, just behind China and the US as well as China. However, the slowdown has forced startups review their strategy and search at sustainable growth.