The Indian Startup Story: Milestones Along the Way On National Startup Day 2023, we take stock of key landmarks that have shaped India's startup story thus far
By Soumya Duggal •
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Home to more than 77,000 registered startups, including over 100 unicorns, the Indian entrepreneurial landscape has undergone a revolution in the last few decades, riding on the back of an explosion in information technology, consumerism and innovation. On National Startup Day 2023, we take stock of key landmarks that have shaped India's startup story thus far.
1968: Tata Consultancy Services Founded
Known as the 'father of the Indian IT industry', Padma Bhushan awardee FC Kohli set up a team of US-returned IT professionals at Tata Group's TCS to provide downstream computer services. Through the 70s and 80s, software companies such as TCS, Wipro and Patni Systems facilitated a full-scale IT boom in the country—one that was initiated by IBM in the 50s—and cultivated tech talent, many of whom would go on to found their own companies, including Infosys. Over the years, IT giants have continued to produce techpreneurs who've established their own startups, such as Urban Ladder and Mindtree.
1991: Liberalisation, Privatisation, Globalisation
Prior to the 1991 LPG Reforms' implementation, resources were monopolised by a handful of big industrialists, with very little scope for the ease of doing business for local traders and producers. Once the Indian economy was liberalised through delicensing, reduction in customs and excise duties, and other measures, entrepreneurship flourished in the country. Further, large businesses were allowed to step out into foreign markets and small businesses were empowered to offer good quality products at competitive prices through the aid of foreign investment. The 90s also saw the launch of various top private banks such as ICICI Bank, HDFC Bank and Axis Bank, which would go on to formalise private credit flow in the country, paving the way for private equity and venture capital financing's entry into the startup ecosystem.
2004: Govt Approves Broadband Policy
India's internet revolution began with the government setting up the Educational Research Network (ERNET) in 1986, followed by state-owned VSNL making internet available to the general public in 1995. Internet made several more strides in the new millennium: arrival of cable internet (2000), launch of Airtel's broadband services (2003), issuance of centre's broadband strategy (2004), launch of Reliance Communication (2004), launch of BSNL's broadband services (2005) and so on. However, it was the unveiling of Mukesh Ambani's 4G mobile network, Reliance Jio, that broke (or made) the internet, boosting the growth of many ecommerce businesses such as Zomato, UrbanClap, Flipkart and so on. Cut to today, both Jio and Airtel are planning to roll out 5G pan India by 2024, which would further bolster the country's startups.
2016: Launch of United Payments Interface
The United Payments Interface (UPI), launched by the National Payments Corporation of India, took on the mantle to turn India into a cashless economy by promising 'secure' real-time online payments. Consequently, between 2015 and 2020, several startups using UPI as rail rose to prominence as they provided a variety of fintech solutions such as digital payments (e.g. Paytm, PhonePe, BharatPe, Razorpay), alternative lending (Zest, InCred, LendingKart), wealthtech (Zerodha, Paisabazaar, Groww), insurtech (Policybazaar, Acko, Digit), neobanking (Jupiter, Finin) and so on. Other government programs, including Jan Dhan Yojna, Startup India and Digital India programme, have also been instrumental in accelerating the digitisation of India, particularly in finance.
2021: Annual VC Funding in India Reaches $38.5 Billion
Beginning in 1986, venture capitalism in India received formalisation two years later with the Securities and Exchange Board of India (SEBI) issuing a set of guidelines. Although initially limited to subsidiaries set up by IDBI, ICICI and the IFC, VC funding in India has exploded over the years on account of a maturing digital infrastructure and easy data access, with Sequoia Capital, Rabobank, Google Venture and IFC being among the top investors at present. According to Bain & Company, investments in India grew 3.8 times over 2020, faster than China's (1.3 times), and 44 unicorns were minted in the country, exceeding China's 42 unicorns that year.
