SUMMARY
The country's startup ecosystem has grown exponentially in recent years, with 106 unicorns and more than 100 soonicorns creating over 7.7 lakh jobs
Startup accelerators have played a pivotal role in this growth journey, from handholding and mentoring to funding and networking several seed-stage startups in India
By supporting startups at early and vulnerable stages, fostering a culture of innovation and promoting sustainable growth, startup accelerators can help startups go the long distance
As it enters its 75th year of independence, India is home to as many as 73,698 startups. The country’s startup ecosystem has grown exponentially in recent years, with 106 unicorns and more than 100 soonicorns creating over 7.7 lakh jobs. Startup accelerators have played a pivotal role in this growth journey, from handholding and mentoring to funding and networking several seed-stage startups in India.
They have assisted Indian startups in establishing a solid foundation and scaling up to advanced stages. Accelerators play multiple roles for a startup, but when viewed in a broader context, they foster an ecosystem that benefits the local economy and thus strengthens the national GDP. As the startup ecosystem continues to mature in scope and size, startup accelerators are also growing parallelly and catapulting the economy to lofty heights.
Providing Building Blocks For Scale Up
The path to success for a startup is fraught with difficulties, ranging from a lack of funding and mentorship to inadequate infrastructure and a network. Startups need support, coaching and education about changes in the market, process and technology, along with guidance on industry best practices. Startups also require funding, mentoring, office space and equipment, as well as a skilled workforce.
Accelerators bridge these gaps by providing startups with capital, market access, high-quality mentorship, networking opportunities, talent, co-working spaces, and professional services. Beyond that, accelerators connect startups with high-profile mentors and investors to help them overcome these obstacles.
Moving Beyond Metropolises
The breeding grounds for startups are no longer limited to metro cities like Bangalore, Mumbai and Delhi NCR. India now has several emerging startup hubs in Jaipur, Ahmedabad, Kochi, Kolkata, and Chandigarh. However, due to their infancy, startups in smaller cities often feel alienated from the culture of a startup ecosystem.
As accelerators spread across the country, innovation hubs are sprouting up in every town. Structured mentorship programs invite applications from across the country and help nudge startups in the right direction. Several accelerators are also constructing co-working spaces in non-metropolitan areas in order to expand the startup ecosystem.
Springboards For Success Stories
There is no denying that 2021 proved to be the watershed moment for Indian startups. Many of these startup success stories were shaped by startup accelerators. The top five startups developed through accelerator programs raised a total of $10 Bn, with a quarter of that amount raised in 2021 alone. Additionally, the total valuation of the top five startups from accelerators in industries such as fintech, hospitality, B2B retail, and social commerce is $26.1 Bn. Furthermore, 8% to 10% of India’s 106 unicorns have participated in accelerators at some point in their journey.
Mitigating The Risk Of Mortality
Despite a slew of unicorns, decacorns, and soonicorns sprinting towards success, many startups fail to see another day. The majority of them fail due to a lack of essential support and new ventures, more so than advanced-stage startups.
Accelerators play a crucial role in quelling the high failure rate among startups. The startup mortality rate in India came down to 1% in 2021 as against 16% in 2016. The mentorship of an accelerator helps to smooth the path for early-stage startups as they test the waters of the startup world.
Pushing Towards SDGs
Besides carving a sustainable path of growth for startups, accelerators are also contributing toward the Sustainable Development Goals (SDG) by supporting startups focused on key impact areas. Startups in critical economic sectors such as agriculture, healthcare, education and energy, in particular, require support during the early stages to reduce mortality and provide the necessary push for progress. Multiple accelerator programs are enabling startups in digital healthcare, edtech, agritech and renewable energy and increasing their mortality.
The Bottom Line
As India prepares for its economic leap, the startup economy will play a critical role in the coming years. Startup accelerators are an important step toward the Indian economy’s $5 Tn vision. By supporting startups at early and vulnerable stages, fostering a culture of innovation and promoting sustainable growth, startup accelerators can help startups go the long distance.
