2019 In Review: Key Milestones That Indian Startup Ecosystem Achieved This Year

This article is part of Inc42’s special year-end series — 2019 In Review — in which we will refresh your memory on the major milestones for Indian startups this year such as the major funding deals, their impact on various stakeholders from entrepreneurs, to venture funds and VC investors. Find more stories from this series here.

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Indian tech startups raised the largest amount of funding, this year, according to the upcoming Indian Tech Startup Funding Report 2019 by Datalabs by Inc42 . The year 2019 has surpassed 2018 stats in many aspects, with many new milestones and achievements.

In 2018, if the Indian tech startups had raised $11 Bn in funding across 743 deals with more than 637 Indian startups raising funding, in 2019, 660 unique startups raised a whopping $13.16 Bn funding through 800 deals. This is comparable to 2017, numbers. The record though still held by 2016, when 1,002 deals were recorded across the year. Despite a good start to the year, 2019 was not able to clear those milestones.

Startups That Entered The Unicorn Club

In contrast to 2018, when according to Inc42 DataLabs, 10 startups entered the unicorn club, only seven Indian tech startups have turned unicorns, this year. While this could also be a sign of Indian tech startup ecosystem stepping into 2.0 with more stability and maturity, analysing the growth curve and potential soonicorns, DataLabs also predicts that by 2025, India will have over 100 unicorns.

Startup India Milestones

Launched in 2016, Startup India has sensitised the Indian ecosystem about entrepreneurship, innovation and the business value, startups bring in to the country. While most of the states have now dedicated startup policies, the central government’s flagship Startup India programme registered a parabolic growth instead of an exponential one. However, it crossed plenty of milestones in 2019.

Interestingly, out of INR 10K Cr Fund of Funds for Startups (FFS) committed to disburse by 2025, only INR 695.94 Cr has been disbursed to the startups. The government of India doesn’t directly invest in the startups but through Alternate Investment Funds. The investment made by the government varies from 20% to 30% of their funds. The catalysed fund that’s been invested in startups currently stands at INR 2,669.83 Cr.

In 2018, 541 recognised startups were registered on GeM with over 281 products being published. The total startups registered on GeM is currently 2,263.

Policy Developments

Policy-wise, 2019 has been a landmark year for Indian startups, as the finance minister in July, this year announced the angel tax abrogation for Startup India-recognised startups completely. FM Nirmala Sitharaman also stated that the decision will be equally applicable for startups which have already been notified.

This year, while the government passed laws to prohibit e-cigarettes completely, it also implemented new national policies on software products as well as electronics with little change to the previous ones.

Electric Vehicle Growth

Among the other major milestones for the startup ecosystem, the developments in the EV industry have been promising. According to FAME India stats, around 28K vehicles were sold out under the FAME subsidy this year. This includes Phase I as well as Phase II of the FAME scheme.

This year, we saw the implementation of Phase II of FAME India scheme after Phase I extension expired on March 31, 2019. With a budget allocation of INR 10K Cr, the Phase II subsidy scheme will be active for three years and will mainly focus on supporting electrification of public & shared transportation.

The scheme aims to support through incentives about 7000 e-buses, 5 lakh e-3 wheelers, 55000 e-4 wheelers passenger cars and 10 lakh electric two-wheelers.

In addition, a budget provision of INR 1000 Cr has been made for setting up of charging infrastructure under the Scheme and Department of Heavy Industry had issued an Expression of Interest (EoI) inviting proposals for the establishment of 1000 charging stations under this phase of the Scheme.

According to the official updates, out of about 500 charging stations sanctioned under Phase-I of FAME-India Scheme about 230 charging stations have been installed. PSU EESL has already deployed 65 public charging stations for EVs in the country. EESL is also tasked to deploy around 300 AC and 170 DC captive chargers across government offices in the country.