• Recently, the government of India has stated that India ranks 3rd globally in Start-Up ecosystem and also, in terms of the number of Unicorns.
  • The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand.
  • These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalists.
  • A unicorn is any privately owned firm with a market capitalization of more than USD 1 billion.
  • It denotes new entities dedicated to offering creative solutions and new business models, among other things.
  • There are several categories like fintech, Edtechs, B2B (Business-to-Business) companies, etc.

State of Startups India

  • India has become the 3rd largest start-up ecosystem in the world after the US and China.
  • India is home to as many as 75,000 Startups.
  • 49% of start-ups are from tier-2 and tier-3 cities.
  • There are currently 105 unicorns, out of which 44 were born in 2021 and 19 in 2022.
  • Startups are also emerging in the fields like IT, agriculture aviation, education, energy, health and space sectors.


  • Increasing Investments Do Not Ensure Success of a Startup: The billions of dollars being invested in startups represent the large bets on distant outcomes, and do not value generation by way of revenues.
  • One cannot assume the high rate of survival of these startups with such investments, as it can be assured by profits.
  • India, still a Marginal Player in the Space Sector: Currently, the global space economy is worth USD 440 billion, with India having less than 2% share in the sector.
  • The reason for the lack of independent private participation in space includes the absence of a framework to provide transparency and clarity in laws.
  • Indian Investors Unwilling to Take Risks: The big investors in India’s startup sector are from overseas, Japan’s SoftBank, China’s Alibaba, and Sequoia from the US.
  • That’s because India does not have a serious venture capital industry with an appetite for risk.

Way Forward

  • The accelerated development of the start-up ecosystem needs significant funding and therefore the role of venture capital and Angel Investors are critical.
  • Apart from policy-level decisions that promote entrepreneurship, the onus is also on India’s corporate sector to foster entrepreneurialism, and create synergies to build impactful technology solutions, and sustainable and resource-efficient growth.


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