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Start-ups in India – Past, Present and Future

India has become the third largest eco system for start-ups and has witnessed highest investment ever. This is the best time to articulately execute ideas and thoughts to add something in nation building. Everyone who has ideas wants to do something in start-ups. Over $125 billion was invested in the Start-ups in 2015 which is the highest investment in start-ups in India. The eager, enthusiasm, curiosity and hunger of doing something new is so high that many of the times the ‘Something’ is not defined properly.

The origin of Indian start-up ecosystem started with software services serving domestic needs and enlarging them to export software services. The next generation of Indian product startups had founders who had worked in these services start-ups, or having worked in product start-ups in the US. Venture Capitalists then came into the picture by TDICI (Technology Development and Information Company of India), a government entity. And third generation is dot-com era, including marketplaces, e-commerce etc. The fourth wave started around 2007-08, and comprised e-commerce, logistics, marketplaces, and advertising start-ups etc. where each and everything is digital.

In 2015 over $125 billion was invested in India but start-up ecosystem had to bear difficulties to successfully sustain in a market in more than 85% cases. Many of the start-ups think that money is a key to flourish in market, so they go for an additional capital investment to cover up their losses, restructuring, etc when they start sinking down due to various reasons. Today, some of the start-ups like Amazon, Uber are making their profits while many of them like Flipkart, Snapdeal are facing troubles to stand and go for mergers, more capital investment, acquisition etc. to expand their business and to extend period of sustainability which helps them most of the time for short term period. Those who are standing firm in the market has found ways to keep innovating themselves and keep an eye on fast changes happening in day to day life which helps them to sustain. Some start-ups like Ladyblush, DoneByNone are copycats of other fashion e-commerce which is the reason that they failed as they could not meet up the expectations and demand by customers which they were already getting from Amazon, Flipkart etc. Start-ups like Byju, to complement its apps it uses coaching centres also. It shows, you have to see what customer demands. Only online app might not have helped Byju to succeed. In two rounds in 2016 alone it raised $149 million, including US$125 million and Mark Zuckerberg is one of its supporters. AJIO, a fashion ecommerce is a subsidiary of Reliance Industries Ltd launched in 2016. Unlike other fashion e-commerce Ajio made its own clothes which helped it in branding.

Take an example of Amazon, it established in India in June 2013. As foreign e-commerce companies were not authorized to sell their inventory directly to consumers in India so Amazon came up with an idea which allowed third party sellers to sell their product. Since 1994, Amazon has managed to keep innovating itself, fulfil customer’s demand in more efficient way than before; therefore it could manage to be most innovative and popular ecommerce. Recently, Amazon has developed Amazon echo- a smart speaker. This device connects to voice-controlled intelligent personal assistant service. This device is capable of many things like voice interaction, music playback, making to-do lists, setting alarms and also providing weather, traffic and other real time information. 

Indian start-ups have really managed to make its place in competing with foreign start-ups. There is a lot to learn from each failure and each success of a start-up. If start-ups want to maintain their place on top they have to keep learning at every stage of firm’s lifecycle. Keep innovating is one of the most important parameter to stand firm. Copying ideas from other start-ups will not be helpful every time even if investment is huge. Acquisition-Hiring, technology acquisition, market consolidation, and customer acquisition are the main drivers for increase in mergers and acquisition of Indian start-ups.

By: Shriya Khanjode



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