Indian Startup Ecosystem Valued At INR 3 Lakh Cr: Piyush Goyal

Touting homegrown startups, Union Minister Piyush Goyal said that the Indian startup ecosystem was currently valued at around INR 3 Lakh Cr. 

“…the fact that we are probably 110-plus unicorns, about 75 or so soonicorns which are on their way to become unicorns, is truly a remarkable achievement. The last time we did a valuation of our startup ecosystem, it came to about USD 368 billion, that’s nearly three lakh crore rupees,” he was quoted as saying by news agency PTI.

He also said that more than 80,000 startups were currently registered with the government. 

Goyal made the comments while addressing a gathering of students, faculties and alumni of Indian Institute of Foreign Trade (IIFT), National Institute of Fashion Technology (NIFT), National Institute of Design (NID) and others.

Noting that Indian startups ‘directly engaged’ over a million people, Goyal further added that ‘many million more’ were indirectly involved in the entire startup ecosystem. 

“We have about over a million people directly engaged by them. Must be many million more who are indirectly involved in the entire startup ecosystem,” he added.

He also said that the government was looking to strengthen patent offices, and would undertake a digitisation drive to make all services available online. He spoke about various initiatives taken by the government to promote startups in the country.

Far From Reality?

Goyal’s statements come at a peculiar time for Indian startups. While India does boast of a record number of unicorns, the ground situation appears to be a little morose. While 2022 began with a cheer hoping to build on the positive momentum of 2021, things have not emerged quite the same way. 

While the Indian startup ecosystem minted a record 44 unicorns in 2021, the number stands (with ten months over) at just 21 so far in the ten months of 2022. While 13 startups achieved the elusive billion-dollar valuation in the first quarter, the number fell to a third (4) in Q2 CY22. The third quarter of the calendar year 2022 also saw a mere 4 startups turn unicorn, pointing to the abysmal funding raised by Indian startups. 

Funding numbers have also fallen with a big thud to $21.6 Bn in the first nine months of the calendar year 2022, down from $27.3 Bn during the corresponding period last year. 

Beginning with the first quarter, funding numbers have successively halved over the next couple of quarters, pointing to the ongoing slowdown in the Indian startup space. Led largely by a cash crunch and a tightening monetary policy across the globe, the purported funding winter has seen startups shelve expansion plans in a bid to conserve cash. 

The Indian startup ecosystem has also been marred by mass layoffs. In a bid to churn profitability, these new-age companies have gone on a blitzkrieg of firings and have so far terminated the employment of more than 15,200 workers. 

A good number of these startups have also been criticised for not having a clear path to profitability and for high cash burn. As losses pile up and customer acquisition costs zoom, these startups have been left scrambling, looking for a lifeboat out of these choppy waters. 

Even as the government touts the success, many startups have shut shop and wound up operations, including edtech players Crejo.Fun and Udayy, celebrity engagement startup GoNuts, among others. Other startups such as BYJU’S has dialled down operations, shutting offices in around 60 cities across the country. 

As if this was not enough, players such as Droom and PharmEasy have dropped plans for a market listing amid the ongoing market volatility that has spooked investors and wiped off a big chunk of investor wealth.

Despite the global headwinds, Indian startups continue to march ahead. The country currently stands third globally in terms of the number of unicorns, behind the US and China. However, the ongoing downturn has forced startups to rethink their strategy and look for more sustainable growth. 

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