Even though the Indian startup ecosystem witnessed subdued funding in 2016, the year-on-year growth of startups getting funding grew by 8% in the same period, states a report by IT industry body Nasscom and research firm Zinnov.
The report ‘Indian Startup Ecosystem Maturing — 2016’ states that there is slight slide in the startup funding in 2016, to $3.8 billion, to $4 billion, compared with $4.9 billion in 2015.
Interacting with reporters while releasing the report, Nasscom President R Chandrashekhar said the total quantum of funding has come down to 30% during 2016.
“India has emerged as the third largest startup base and such ventures are poised to grow 2.2 times to reach 10,500 by 2020, despite a perception that the ecosystem in the country has slowed down in the last year,” said Chandrashekhar.
The report states that the number of tech startups in India is expected to grow by 10-12%, to over 4,750 by the end of 2016, and will give employment to over 2,10,000 people.
“Technology startups are creating a new identity for India, and its technological prowess. Besides, solving India-centric problem these startups are also coming up with cutting edge solutions which are making a global impact,” he said.
When asked about the low ranking of India in the ease of doing business ranking, Nasscom President said it is a hugely worrying issue for the growth of startup ecosystem in the country. India ranks 130th position in terms of ease of doing business.
Revised growth guidance
Taking into account the muted second quarter results by IT behemoths in the country, IT industry body Nasscom said it is fairly clear that it will have to revise downwards its export revenue growth guidance.
Chandrashekhar said that he had mentioned earlier that Nasscom would revisit the guidance post the Q2 results. “We expected the growth between 10% and 12% for 2016-17. Two of the country's largest outsourcing companies, TCS and Infosys, have posted muted numbers in Q2 and said they were witnessing softness in the banking and financial services sector and client spending,” he said.
Chandrashekhar said that it is fairly clear that Nasscom will have to revise the guidance downwards. “But what exactly is the revised guidance is something that we will be able to share after two weeks,” he said.