SUMMARY
The group has been formed to give voice to the global startup ecosystem by bringing together varied stakeholders on a common platform
Fintech, healthcare, and SaaS could be the three big areas where India can contribute as a leader
With 63 unicorns in the last two years, India has been at the forefront of building unicorns in recent times
The G20 Startup20 Engagement Group is all set to hold its inception meeting in Hyderabad this week (on January 28). The meeting is expected to create a global narrative for supporting startups and fostering synergies between startups, corporates, investors, innovation agencies, and other key stakeholders of the ecosystem.
The group has been formed to give voice to the global startup ecosystem by bringing together varied stakeholders on a common platform.
Set up under India’s G20 presidency, the Startup 20 Engagement Group will convene from January 28-29, anticipating a productive development of policy recommendations on entrepreneurship and innovation priorities of and across G20 countries for the years ahead, the Ministry of Commerce & Industry said in a release.
The meet will host delegates from G20 nations and nine special invitees from observer countries, representatives from multilateral organisations as well as the Indian startup ecosystem, it added.
Amid this, industry veterans are of the opinion that there is a greater need for all countries involved to be on the same page when it comes to defining what startups are and the policies under which they shall be governed.
“The Startup20 Engagement Group aims to harmonise the global startup ecosystem through consensus-based definitions and promote a global community of knowledge sharing among startup ecosystems. One of the key reasons behind startups’ failure has been the unfavourable market conditions regarding policy, understanding, and awareness. When it comes to startups, things are not clear. And we want this to get streamlined,” an Invest India consultant said, requesting anonymity.
“Since the startup businesses are global in nature, there is a need to develop an understanding of these businesses in terms of definition and policy frameworks. We are happy that the Startup20 Engagement Group is expected to discuss these points and make changes in its policies accordingly,” he added.
The consultant said, in India, DPIIT recognises a business as a startup when it is headquartered in India, is less than 10 years of age, and has an annual turnover of less than ₹100 Cr. However, this may not be the case in many countries.
Similarly, policy frameworks with regard to technologies vary. Until 2017, commercial drones were banned in India; however, now that the ban has been lifted, a new promising space has emerged within the country’s startup ecosystem. Given that drones are still banned in many countries, the idea of an inclusive collaboration is the need of the hour. Web3 is another area where policy frameworks vary drastically, the consultant added.
“Data privacy framework, cross-border payments, ecommerce policies, climate tech framework, and the list goes on. With India promoting ‘Vasudeva Kutumbkam’ as the theme of this year’s G20, the idea is to bring uniformity in these areas and provide a soft launch to startups across borders,” the consultant said.
As shown in the table, India is the third largest startup ecosystem in the world, after the US and China. Most of the countries mentioned in the chart above are far behind India.
According to industry experts, India’s UPI is currently leading the entire digital transactions worldwide. Having penetrated Nepal, Singapore, Bhutan, Malaysia, UAE, France, the UK and Oman already, UPI could soon replace the existing mode of digital transactions in other countries too. Thus, Indian payments startups have some unique offerings for the G20 market.
Similarly, Made In India SaaS solutions have been a lot cheaper and suit the MSME requirements across the world. Given the money constraint startups usually have, startups need a soft launch in other markets too. A uniformity in policy frameworks will further help keep their product and services as standard as possible.
Stakeholders Hail The Startup 20 Group
With 63 unicorns in the last two years, India has been at the forefront of building unicorns in recent times. To further promote the startup ecosystem, India has signed bilateral agreements with numerous countries and created bilateral platforms for startups.
Some of them are: India-Netherlands StartUpLink, India-UAE Startup Corridor, and TechXChange between India-UK.
In such a scenario, what’s different about the Startup 20 Engagement Group?
Speaking with Inc42, the partner of Aarin Capital and a former CFO of Infosys, T.V. Mohandas Pai, said, “Under Startup20, many countries can join together, and work on a common framework to allow access to each other’s startups. The best thing to do is to create a platform for startups from all countries to share ideas and pitch their businesses.”
Prasanth Prakash, a partner at Accel India tweeted, “As part of G20 India Presidency 2023, Startup20 has been established, which aspires to create a global narrative for supporting startups and enabling synergies between startups, corporates, investors, innovation agencies & other key ecosystem stakeholders… Startup20 would provide a platform for startups from G20 member countries to develop actionable guidance on various fronts.”
As the primary goal of Startup20 is to support startups through strategic collaboration among G20 nations, one of the pillars India has identified for this group is foundations and alliances.
“Through this collaboration, while we gain access to learnings of scale and capability of mature markets, they gain access to innovative technology, plus an incredible talent pool. Together, this collaboration allows us to solve problems that humanity faces and collectively build businesses that dominate,” said Manu Rikhye, a partner at Merak Ventures.
So, Which Sectors Should The Startup20 Group Focus On?
As the Startup20 Group meet is scheduled to be held on January 28, 2023, industry experts have said that there needs to be a preferential list of segments while engaging with other member countries.
“Fintech, healthcare, and SaaS could be the three big areas where India can contribute as a leader,” Pai said.
“With the onset of this programme, some critical deep science sectors like deeptech, life sciences and genomics would greatly benefit from the resources that the government would provide,” said Rikhye.
