VSP blog and FivethirtyEight live blog: India has one of the most innovative tech ecosystems in the world, with some companies even setting up their own virtual platforms.
The country is also home to some of the world’s largest and fastest growing startups, including Flipkart, Ola, Flipkarn, Paytm, and Ola Payments.
In addition to being home to a strong talent pool, India is also an economic powerhouse, with GDP growth averaging 6.5% per annum.
“In terms of investments, Indian startups are more active in India than American startups,” said Vishal Sharma, Partner, EY India.
“We’re also seeing more investments in the Indian market than the US market, and that’s really exciting for investors and investors alike.”
Sharma added that India is still a relatively young market for technology startups, with only around 10% of startups globally actually operating.
“In a recent survey, nearly one-third of the startups that responded said they were not even actively involved in the country,” Sharma said.
“That’s very significant, as there are so many companies that are not operating in India yet.”
The startup community in India is more diverse than in the US, where most of the country’s tech startups operate in a relatively small group.
Sharma believes that this has a big impact on the way that startups operate and the types of startups that are launched in India.
“It’s a very diverse community in the way they operate,” he said.
“I think the way a startup is run is a big driver of whether it will succeed or not.
India has a lot of startups out there, and they all operate very differently from one another.”
Sharma said that the Indian startup ecosystem is also more mature than that in the United States.
“The Indian startup scene is much more mature, more mature in terms of its ability to scale, to attract investment, to grow, and to get out of the early stage and into the middle stage of growth,” he added.
According to Sharma, the success of startups in India depends on the culture of the company and the leadership that the founders have.
“When you’re in India, the culture is very different.
If you’re not comfortable with it, you’re going to struggle.
If the founders are not comfortable, they’re going not to succeed,” he explained.”
So, it’s very important for the leadership to be able to work with the founders to figure out how to scale and how to attract the right talent to start their companies in India.”
In addition to India, Sharma said he believes that technology investments in India are also a big part of the reason why India is the world leader in the growth of software companies.
“It’s an incredible ecosystem, and I think India has one the fastest growing tech ecosystems of any country,” he remarked.
“If you look at the number of companies that have been acquired in the last 10 years, India alone has one or two or three of those.
In fact, the country has over 1,000 startups, so I think it’s a really great ecosystem for companies to operate.”
The number of startups operating in the startup ecosystem in India has grown from 2,500 in 2012 to more than 5,000 in 2017.
Sharma said the number is growing at a much faster rate than in any other country.
“The fact that we’re in the top spot in the global startup ecosystem, I think, speaks to the fact that Indian companies are very mature and are going to continue to grow and expand,” he concluded.
The number and types of tech investments in Indian startups will likely grow significantly in the future, as India’s tech ecosystem continues to evolve.
Sharma added: “There’s no doubt that India has the ability to sustainably grow.”
More from VSP Blog: The Biggest Problem for India’s Tech Scene “When I say sustainably, I mean sustainably in the sense that the economy is growing, but not growing fast enough to support the growth,” Sharma continued.
“So, we have a problem with our infrastructure, with our connectivity, and we have to get back to the business of growing the economy.
We have to grow the economy by investing in infrastructure, investing in connectivity, investing more in research and development.”
He added that the country is not immune to the effects of climate change and other factors, and he believes this will continue to be an important factor for the future of the startup community.
“India is very resilient in terms to this climate,” Sharma added.
“This is what makes us an attractive place for startups to come from.
So, there is definitely a lot that can be done, but there is still work to be done.”