The startup culture has bloomed across India and achieved spectacular growth over the years. Today, the saying “for every problem, there’s a solution” could be rephrased as, “for every problem, there’s a business opportunity as a solution” and startups are living up to it. From buying and selling stuff online to home delivery of food from our favourite restaurants; from getting groceries at the doorstep within minutes to consulting a doctor on a video call; and many more, startups have transformed the world around us dramatically by leveraging new-gen technologies. These ambitious initiatives are not only contributing to the country’s economic growth but also boosting innovation and creating employment opportunities. On this National Technology Day, let us take a deep dive into how technology transformed businesses and reshaped India’s startup scenario.
In 2016, the number of startups reported was less than 500 across India. However, with the onset of advanced technologies like IoT, automation, blockchain, cloud, etc. the number of startups rose to around 73,000 in 2022. Moreover, the Economic Survey reported India as the third-largest hub for startups after the US and China. These numbers portray a glorious growth story of businesses and technology in India. And, these ventures are still on the go for bigger achievements.
The pandemic conundrum & industrial resurrection through technology
Yes, the Covid pandemic brought the major economic sectors to a standstill. This marked a transformational moment for industries across the globe. The era witnessed many companies shut down businesses and many got shelved. However, some viewed the glass half full and leveraged this as a life-changing opportunity. These businesses displayed excellent resiliency, leveraged technology, and devised new business models and strategies to stay afloat. In fact, the country became home to 100 unicorns just a year after the pandemic.
Although the global crisis hit hard, it accelerated the adoption of digital rapidly and widely. This behavioural change reshaped the course of IT adoption and the growth of startups. The IT-led companies witnessed an upswing during this period of disruption and this led to the adoption of IT tools and digital interfaces by other sectors as well. Hon’ble Prime Minister of India Narendra Modi also addressed the transformation in one of his ‘Man ki Baat’ monthly podcasts saying, “Even during the pandemic our startups trailed the path to growth and created wealth and value.”
The evolution of the Indian startup ecosystem
Today, it would not be wrong to say that Covid opened doors to a plethora of opportunities for the IT sector. IT was an enabler earlier, then it became the backbone of businesses, and today IT is the business. With some renowned names like Cred, Vernacular.ai, Zoho, Dream11, Zerodha, and more, Indian startups have shown exemplary use of new-gen technologies.
From e-payments, online insurance policies to digital disbursal of loans; from e-commerce websites to video conferencing applications; from virtual labs to metaverse; IT has redefined businesses across industries in multiple ways.
Meanwhile, to facilitate the startup culture in India, the country’s top-of-the-line institutions like IIIMs and IITs came up with Incubation Hubs. This approach went trending quickly and multiple such hubs came into existence across the country. These hubs made it easier for startups to set up operations and prepare a strong foundation for their business under expert guidance.
One such facility is IIM Bangalore’s startup incubation arm NSRCEL. Anand Sri Ganesh, Chief Operating Officer of IIMB NSRCEL says, “Today most entrepreneurs interpret their market innovation through a technology lens. Technology is either encapsulating an IP or it is translating a business model. Tech-enabled business models help embed scale-thinking even early on in the venture’s journey.”
The industry perspective
Looking at the brighter side, there are numerous startups that leveraged technology as their driving force and evolved into unicorns and are still trailing the path to growth. IT did give a makeover to businesses across the globe while such successful startups are evidence of the potential technology holds.
Kuppulakshmi Krishnamoorthy, Global Head – Zoho for Startups, Zoho Corporation, says, “We’re in an era where technology has become that invisible and invincible co-founder in the startup scene. Today, India houses over 100 unicorns, and there are hardly any among these that became profitable without the use of technology. The push in digital transformation has allowed technology to be fused widely and deeply across all business operations, and also helped startups build scalable models serving customers from any part of the world. Moreover, technological advances in AI, for instance, have transformed operational efficiency and customer success strategies for the better, while connectivity is helping lay down the fundamentals of the future of work. Similarly, the potential outcomes of leveraging technology are boundless and it is in the hands of the founders to work everyday on being technology-led, thereby freeing up their time and mental bandwidth to do the one important thing they should be doing—focus on building a powerful and inclusive future, and this applies to all the verticals of startups.”
While Greg Moran, CEO and Co-Founder, Zoomcar says, “As a car sharing platform, we have witnessed firsthand how technology has reshaped the Indian startup scene. The proliferation of affordable and accessible IT infrastructure has created a level playing field for entrepreneurs, enabling them to innovate and scale their ideas at an unprecedented pace. With advancements in cloud computing, big data analytics, and artificial intelligence, startups can now leverage these technologies to drive business growth and enhance customer experiences. From fintech to healthcare, IT has disrupted traditional industries and created new opportunities for startups to thrive. As we continue to embrace digital transformation, we believe that the Indian startup ecosystem will only continue to flourish and drive innovation across all sectors.”
Laying emphasis on how the emergence of new technologies had a significant impact on the startup ecosystem, Vivek Gupta, CTO of CoinDCX states, “The blockchain industry has the potential to solve a range of problems across various sectors, and the Indian startups are leveraging this technology to create new business models and use cases that benefit the end users. One of the key advantages of blockchain technology is its ability to provide a secure and decentralised system for transactions and data storage. This eliminates the need for intermediaries, reduces costs, and enhances transparency.”
In India, for example, there are now over 450 Web3 startups that have raised US$ 1.3 billion in funding over the past two years, with a focus on decentralised finance (DeFi), non-fungible tokens (NFTs), and the metaverse. These startups employ around 75,000 professionals and are benefitting from India’s large pool of digitally skilled talent and a young population. Additionally, the country has the right economic and demographic elements to become a high-growth Web3 market. The global crypto user base is also expected to grow from 320 million to 1 billion by 2030, providing ample opportunities for Web3 companies. As per a NASSCOM report, India’s Web3 industry is projected to add $1.1 trillion in economic value to India’s GDP by 2032, Gupta added.
Karthik Venkateswaran, Co-Founder and CEO of Jumbotail highlights, “At Jumbotail, we are proud to leverage technology as a key driver in transforming the food and grocery retail value chain in India, standing at the vanguard of this exciting transition.”
This era heralds a generational shift, where emerging technologies such as 5G, Artificial General Intelligence (AGI), Web3, blockchain, Mixed Reality, and IoT will converge, creating unparalleled opportunities to exponentially advance our society. The Indian tech industry is set to lead this innovation wave, both in global applications and in driving transformation within large domestic markets, he adds.
Adding on to the changing startup scenario with the onset of advanced technologies, Praful Poddar, Senior Vice President, Product Management, Shiprocket points out, “India’s startup ecosystem is on a hyper-growth trajectory, fueled by the power of modern technology. Startups are transforming the game with affordable and user-friendly IT tools like cloud computing, automation tech, and generative AI. Thanks to the availability of plug-and-play options, companies can outsource tech handling to experts and concentrate on their core competencies. Technology has become the most important element across the value chain, from top to bottom, enabling brands to optimise workflows and create innovative solutions tailored to the market’s needs.”
Ashwin Chawla, Founder and Managing Director, Escrowpay says, “IT has emerged as the game-changer in reshaping the Indian startup scene, and fintech platforms are leading the charge. With innovative solutions that leverage cutting-edge technologies, fintech platforms are transforming the way businesses operate and revolutionising the financial landscape in India. By bridging the gap between traditional banking and digital finance, fintech platforms are empowering entrepreneurs and enabling them to scale their businesses faster than ever before. With its ability to democratise access to financial services and fuel the growth of the startup ecosystem, IT is truly transforming the Indian economy and paving the way for a brighter future. Our escrow platform is proud to be at the forefront of this transformation. By providing secure and efficient payment solutions, we are empowering startups to focus on innovation and growth, without the worry of financial risks.”
Sharing his perspective on the rise of accessibility technologies, Shrutiranjan Satpathy, CTO, Porter highlights, “Over the last few years, the Indian logistics industry has gone through a much-needed overhaul, with new-age platforms championing and contributing to the digitisation of the sector. Disciplines like machine learning, data analytics and, of course, AI, have been rapidly changing the landscape of logistics. GPS and real-time tracking have improved by leaps and bounds as well, which have contributed to the further penetration of tech-enabled logistics. In fact, certain workflows, such as payments and accounting, have become exclusively digital and reduced the paperwork while simultaneously offering all stakeholders greater control and view over their data points. With innovations such as quick commerce and hyperlocal delivery models coming up so rapidly, customer habits and expectations have also morphed dramatically.”
“Technology has managed to streamline many processes, most of all, the matchmaking between supply and demand. The mastery of this, especially at an intracity level in major Indian cities, has made logistics far more accessible to users of all kinds in recent years. As we further explore and integrate AI into tech-enabled logistics, we expect to see more nuanced algorithms in the near future. Accessibility technologies such as voice typing, nudges and intuitive text can help even the less technologically savvy to utilise a tech platform to their advantage. Automation and robotics are also seeping their way into warehousing, which should improve efficiency and mitigate human error,” Satpathy added.
The flip side
However, the entire picture is not rosy and there are multiple challenges that arose due to changing global economic scenario. With the US economy taking a hit due to the closure of Silicon Valley Bank and the impact on the European economy with firms like Credit Suisse dwindling and finally shut, investors have become highly careful of investing in IT-based startups.
Shedding light on this, Amar Deo Singh, Head Advisory at one of India’s leading investor firms Angel One says, “Indian IT sector employs 5.4 million and generates more than half its revenues from the US markets, with a major chunk of the business coming from the BFSI segment. And, with rising macroeconomic worries in the US and Europe, coupled with the recent collapse of big financial institutions like the SVB & Credit Suisse, investments in the IT sector have taken a hit. Many US companies have hit a pause button on various IT projects and putting on hold new projects, which is bound to impact the IT sector, but the hit would vary from company to company, as to how well their revenue streams have been diversified. Rising interest rates and soaring inflation in the US and Europe, have led to investors taking a cautious view on the IT sector in the short-term, till clarity emerges with regard to the health of the US economy.”
Epilogue
In a nutshell, the massive potential of technology is as clear as day, and industries across have invested heavily to reinforce their existing IT infrastructure. It is indeed inevitable as going digital is no more an option but a necessity. Therefore the dawn of the ‘technology age’ is here and forward is the only way to go. “On National Technology Day, we take a moment to celebrate the extraordinary power of technology which has transformed our lives. It reminds us of the importance of investing in the talent and expertise needed to expand the capabilities of the industry,” says Michael Hurlston, President and CEO, Synaptics.
Furthermore, the myth that ‘technology can replace humans’ can be proved wrong in every age and time. It will be the human brain that will feed the artificial intelligence to stay intelligent throughout and command the machine on what to learn. Nevertheless, we know that ‘change is the only constant’ and evolving with the changing time is necessary to stay relevant. Therefore, automation and AI-based tools taking up monotonous jobs will open up newer avenues for low-skilled workers and push them to get re-skilled and involved in more strategic and intellectual roles.
