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India to have 100 unicorns by 2025: Rajan Anandan, President, TiE, Delhi-NCR

There was a dip in overall funding by 50% during the lockdown as compared to pre-COVID levels, around 40% of start-ups were negatively impacted, and 15% of Indian startups were forced to discontinue operations due to COVID-19.

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The year 2020 started with the Indian startup ecosystem being the world’s third-largest, growing rapidly on the back of a spectacular 2019. However, COVID-19 jolted the startup ecosystem across multiple dimensions and the impact was severe during the lockdown period from March to June 2020. There was a dip in overall funding by 50% during the lockdown as compared to pre-COVID levels, around 40% of start-ups were negatively impacted, and 15% of Indian startups were forced to discontinue operations due to COVID-19.

Despite those turbulences, India is expected to be home to 60,000-62,000 startups, including 100 unicorns, by 2025, despite the huge impact of covid-19 on India’s startup ecosystem, said a report jointly prepared by TiE- Delhi, a not-for-profit promoting entrepreneurship, and Zinnov, a global management and strategy consultancy. The report, titled ‘COVID-19 and the Antifragility of Indian Startup Ecosystem’, has also claimed that the sector has seen a quick turnaround as the pace of funding has nearly recovered to the pre-Covid levels in the July-September quarter, led by seed and late stage investments. The report is supported by Cisco Launchpad, NetApp Excellerator, and Lowe’s Innovation Labs.

While presenting his views, Rajan Anandan, President, TiE Delhi-NCR, maintained, “We exited 2019 as the third largest start up ecosystem in the world with 38,000 companies in that space. But then we all know what happened after that starting on 20th March when the Covid happened. Within a few months of the lockdown imposition, more than half of the industry players were struggling to raise funds with an estimated 15% having halted operations. We also witnessed a decline by 48% of overall investment phase from 2.6 billion dollars in Q1 CY 2019 to 1.3 billion in Q2 CY 2020.”

Anandan, who is also the Managing Director of Sequoia Capital (India and Southeast Asia), added, “Although the immediate impact of the lockdowns on the Indian startup ecosystem was severe, we have been amazed to witness how quickly Indian founders have acted to reimagine their businesses. What has been most impressive is how many startups have reduced burn and improved their unit economics very rapidly. Digitally-led segments have recovered much faster than anyone expected and, in many spaces, demand is well ahead of pre-COVID levels.”

“Investor sentiment has also recovered quickly and we expect the Indian unicorn club to steadily expand through 2020 and 2021. Although COVID-19 has been a major setback for the ecosystem, we believe that the changes that the pandemic has brought on will make our ecosystem much stronger, across every dimension. India is on a path to have 100 unicorns by 2025,” Anandan, who was the former Country Head of Google India, further added.

Speaking about the report, Pari Natarajan, CEO, Zinnov, said, “Despite setbacks due to COVID-19, the Indian startup ecosystem has risen to the challenge, as evidenced by its faster than estimated recovery. In the initial days, the startups reduced cash burn and redeployed existing capabilities to focus on tiding over the uncertainty. The shift to digital consumption certainly provided an opportunity. By being nimble and rapidly responding to different challenges, looking at them as an opportunity, the Indian startup ecosystem has displayed its antifragile nature. Despite the trying times, and the death of many startups, the ecosystem has played a key role in employment generation and is expected to create ~15-16 Lakhs direct jobs by 2025. There is clear evidence that India’s future is about technology, policy, innovation, and entrepreneurship.”

Madhurima Agarwal, Director – Engineering Programs and Leader, NetApp Excellerator, said, “Resilience, hardiness, and adaptability are inherent traits of startups that allow them to succeed despite all odds. COVID-19, a black swan event, wreaked devastation in its wake, both on the societal and the economic fronts. The manner in which startups responded to the challenges posed by COVID-19, is a testament to the antifragile nature of this ecosystem. While certain sectors were impacted worse than others, it drove positive change in key areas like automation and digital transformation. In every challenge lies an opportunity; the mantra is to survive these turbulent times and prepare for the opportunities that follow.”

Sharing her perspective on the report, Sruthi Kannan, Head, Cisco Launchpad, said, “COVID has shaken the world, causing disruptions across a multitude of parameters. Despite all negativity and bottlenecks, the Indian startup ecosystem has been able to hold its firm grip – courtesy of its antifragile nature. Startups have been nimble, despite the challenges, in converting this crisis into an opportunity. We are witnessing an inspiring response – from harnessing tailwinds in select sectors to business pivots, to repurposing capabilities to new or adjacent markets. We continue to be positive about the impactful change that Indian startups can make, both locally and globally.”


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