The last decade has seen a shift in the business interest of the youngsters in India. Now, after completing education, instead of running after a high pay job, joining the family business or commencing a tradition business, the focus of the youth is more on startups. A startup is an idea with an individual or group of individuals. It is then, they start working on it to make it a commercial success and then turn it into a cash-generating entity for its investors and founders.

India has always been seen as a country where traditional business-like, trading, construction etc. thrive. But what has changed over the last decade, and why has there been such a shift? What is the startup ecosystem in India? Let’s find out about it.

Traditionally, the startups in India were formed in the field of developing and providing software services to cater the Indian IT needs. Later on, they expanded themselves beyond the boundaries and made a global presence for themselves. TCS formed in the year 1968, Infosys formed in the year 1981 are the examples of the first startups. Even though there were some of the startups in the ecommerce segment in 90s, but still the scene was dominated by the tech startups.

India being the 2nd most populated country in the world and 7th largest country by area, is always a center of attraction for foreign investors and startups. With such a huge consumer base and India being a developing country, large number of investors see it as a promising market place. It has also been seen that techies from Silicon Valley see a promising future in India for their product and in the last decade have decided to move here.

Over the years, the focus of startups in India has also shifted towards products and providing solutions. Now, the software solutions are not the only product which are offered by the startups. Various startups in India are now focused on providing an innovative product which can make a deep impact on our lives. Similarly, the startups also focus on providing solutions for our day to day needs. The focus is not just in B2B transactions but B2C segment is also under in the radar od startups.

India is the 3rd largest startup base in the world thanks to its startup ecosystem. Every day 3-4 startups commence in India and till date, more than 11,000 startups have been recognized. There is no denying the fact that there has been an inclination towards startups. The startup ecosystem has a vast number of factors and contributors in it:

1. Ease of doing business: Now I am not talking about the “Ease of doing business ranking” given by the world bank, but in past few years there have been various steps taken by the government for the startups in the form of relaxing licensing requirements, taxes, providing infrastructure for startups.
2. Internet penetration: In the last two years, internet usage in India has seen a boom. For any tech startup or any startup using the internet to reach its customer base or promote itself, has been the biggest beneficiaries of the internet revolution. Also, with internet penetration, providing services or products has become an easy task for these startups.
3. Size of the market: India has a population of more than 1 billion. It is a large market to tap. With the advancements in technology and outreach of social media, startups can now focus on other tier 1, tier 2 cities besides metros. Nowadays, life of a person living in tier 1 and tier 2 cities is also changing and people find it difficult to takeout time to solve their day to day problems. Startups are now advancing and trying to penetrate into these markets.
4. Areas to explore: While markets like eCommerce and aggregators are saturated, markets like fintech, edutech and healthtech are still unexplored. Startups are now focusing more on these segments to tap in the market share. The startup ecosystem in India is yet to explore markets in these segments.
5. Infrastructure: With the growth in the number of incubators and accelerators, the startup infrastructure has got a big push. Now all the facilities are provided by the incubators to the incubates so that their work does not hamper. Also, with the growth in the segment of co-working space, the ecosystem has seen a major change in the office culture and working culture.
6. Funding: Funding plays a very important part in the development and growth of any startup. There are various investors, both governments formed institutions and private institutions, that provide the funding to the startups. Both central and state government have their own bodies to promote startups and provide them funds and infrastructure. Not only government, investors across globe search for the quality startups in which they can invest. They include global investors like softbank, Alibaba. Various institutions in India are also ready to fund these startups.
7. Corporate connect: CEOs and other high-ranked officials in the corporate world are ready for the idea to associate themselves with the startups. They get involved in ways such as, providing them with funds, acting as a consultant in exchange for the equity. In both the cases it is beneficial for the startups and the corporate giants.

So, these are some of the factors which comprise in the startup ecosystem. As the number of startups increase, so do the factors that participate in the startup ecosystem increases. The startup ecosystem in India looks very promising and can accelerate in the growth of the economy in the long run.