India has experienced a boom in new emerging startups in the past few years. This year, 2016 has been different, though. So is India’s startup bubble about to burst?
First the bad news
Despite being the world’s 3rd largest ecosystem for the startup industry, India has seen a massive fall in investment in new startups. Compared to the same period in 2015, investment decreased a staggering 40{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} in the first half of 2016, to the tune of $2.1 billion. This fall in investment has impacted startups and new businesses in one of two ways:job losses and sadly the closing of some.
In July this year, Flipkart showed 700 of its employees the door, following in the footsteps of Snapdeal, Zomato, Grofers, Housing, TinyOwl and others who have also been forced to lose staff due to financial difficulties or failure to meet forecast goals.
Unfortunately, for some companies and startups, job cuts were not enough, and 2016 has been witness to the folding of some big players in the startup industry; including Peppertap, Amber Wellness, and Tooler, with many others set to follow suit.
Now here’s some good news for entrepreneurs
It’s not all bad news, though. This year saw the second year of the annual Startup India Rocks Competition – A competition run by Scaale’s global group. The competition provides entrepreneurs with the opportunity to win prizes which range from mentorship, funding and corporate connections.
Last year’s event in Goa was so successful that the idea was expanded into the global market, now known as Startup Global Rocks.
Startup Global Rocks features:
- Over 100 companies from more than 15 countries
- More than 60 global investors
- The involvement of at least 50 global media outlets
- More than $2 million invested so far
Scaale global group are a company growth consultancy group with connections in over eight countries worldwide. The group has more than ten years of experience, connecting startups and small businesses with funding, corporate contacts and investors they require to grow their business.
So what’s the Government planning for startup companies?
In January of 2016, Prime Minister Narendra Modi presented the Startup India action plan, to a collection of startup founders. The Startup India action plan is a 19-step plan that aims to put entrepreneurship and innovation at the forefront of the Indian economy, by relaxing policies and providing funding and training opportunities for the country’s entrepreneurs. Key players in the startup industry such as Girish Mathrubootham, founder of Indian startup Freshdesk, applauded the government’s recognition of startups as legitimate businesses.
The Startup India action plan proposes many things from funding to tax breaks, training centres and easier company registration to name a few.
And with over 80k jobs being created by the startup industry alone in 2015, it’s hardly surprising that the Indian government wishes to bolster and aid the industry. However, many feel that the action plan doesn’t go far enough.
|
The Startup India action plan does lack a few things As with most new government programs, there have been a few voices of discontent since the announcement made at Red Fort, Delhi in January. While many agree that the Startup India action plan will make life easier for new startups and investors, others feel the terms of the plan fall well short of what India’s startup industry needs. Forbes India, highlighted some of the good, and not so good aspects of the Startup India action plan. The graphic depicted here enumerates the pros and cons of this plan. |
 |
Some blame the atrocious gender gap in India for India’s struggling startup industry, with only 10{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} of startup founders being female, compared to 37{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616} in the US. While others, including Alok Goel, managing director at SAIF Partners, suggested that India’s old-fashioned laws and policies are to blame.
Nobody can deny, though, that this is a very exciting time in India to be launching a startup. It remains to be seen how far the newly launched plan is going to survive, though.
How are the startups shaping up in India?
In a new economic climate where innovation and entrepreneurship have been pushed to the forefront, India could see a real upsurge in the number of startups around, and this is of vital importance for a country like India.
The problem-solving minds of entrepreneurs are important in tackling some of India’s biggest problems such as health care and education. This is where Indian startups differ from those in the rest of the world. India is not exporting cheap labour like in bygone years; they are developing solutions for Indian people in India.
The government’s development of the Startup India action plan demonstrates that they are becoming increasingly aware of the importance of startups in India. So, while the new policies may come too late for existing fledgeling startups, there may still be a few creases that need ironing out. Hopefully, we will see an increase in new ideas and innovations as a result.
What are the proposed Startup incubators
One of the biggest aspects of the government’s plan is the formation of Startup incubators, centres of excellence around the country where entrepreneurs and innovators can come together to share ideas.
With the sole purpose of helping new businesses grow, incubators are developing to be more industry specific in India so that startups can focus on the right areas. Assistance ranges from basic business etiquette and connecting startups with industry partners, to simply providing office space.
The future for Indian startups
With the Startup India action plan now in full swing, the government has proposed many options which should make setting up a startup easier. But it is important to remember that despite this investment, many of India’s top 200 startups choose to base their headquarters in countries such as Singapore and the US, in order to experience more business freedoms. So the next big question is, once we encourage all these new startups in India, how do we get them to stay?
Primary Keyword: startups
LSI Keywords:
Variants: Indian startup, India’s startup industry, global startup, startup India rocks, startup India action plan
Antonyms/Synonyms: entrepreneurs, new business, businesses, investors, entrepreneurship, innovation, mentorship,
Sources:
http://qz.com/819873/the-one-word-that-sums-up-indias-startup-sector-in-2016-unimpressive/
https://yourstory.com/2016/07/funding-roundup-indian-startup-h1/
http://startupindia.gov.in/actionplan.php
https://in.linkedin.com/in/girish1
http://timesofindia.indiatimes.com/trend-tracking/startup-layoffs-continue/articleshow/53465457.cms
http://www.topmba.com/blog/what-startup-incubator
