How National Startup Day Highlights the Importance of Startups in India

How National Startup Day Highlights the Importance of Startups in India

National Startup Day is observed yearly on January sixteen to honour the vital position that startups play in selling innovation, financial expansion, and independence in India. commenced with the aid of using Prime Minister Narendra Modi in 2022 to commemorate the Startup India initiative, this present day serves as a reminder of ways entrepreneurial spirit can change a country`s future.

India’s startup ecosystem, that is the 1/3 biggest in the international with over 1.6 lakh government-identified startups, has come to be a robust motive force of financial improvement because the country commemorates the 9th anniversary of its Startup India initiative in the shape of National Startup Day. The trade ministry’s records indicates that the agencies have generated extra than 1.6 million jobs nationwide.

As on June 30, 2024, DPIIT has identified 1,40,803 entities as startups. Since the release of the Startup India initiative in 2016, the DPIIT-recognized startups have created over 15.53 lakh direct jobs as on June 30, 2024.

The State/UT-smart total wide variety of DPIIT-identified startups at some point of the beyond years in 2022 is 26,596, and in 2023 it is 34,842.

National Startup Day History:

When the Startup India Scheme become delivered in 2016, the concept of spotting startups received traction. Since then, the Indian authorities has released some of packages geared toward encouraging innovation and developing a welcoming environment for brand new businesses. In 2022, Prime Minister Narendra Modi proclaimed January sixteen to be National Startup Day in popularity of the monetary contributions made through startups in India. The announcement, which highlighted the significance of entrepreneurial endeavours, become made all through the inaugural Startup India Innovation Week.

National Startup Day has developed right into a forum for praising exquisite startups and encouraging cooperation among enterprise owners, financiers, and legislators.

Top Reasons for Startup Failure in India

Market Problems: Many startups in India fail because they are unable to solve an existing market problem. This is one of the main reasons why startups fail in India. On average, 42 percent of startups fail because they are unable to fulfill a market need.

Wrong Business Model: One of the most common reasons why startups fail in India is because entrepreneurs are overly optimistic about the ease of acquiring customers. They simply believe that building a compelling website or service will open the doors to success.

Ignoring customers: Ignoring customers has proven to be a path to failure. Many startups don’t find time to interact with their users. They don’t know what their customers think about their product. This is where they lose and why startups fail in India. They don’t pay attention to the customers and don’t adapt to their needs.

Lack of Funding: Around 29% of Indian startups fail due to lack of funding.

Development Team Challenges: Statistics show that around 23% of startups fail due to improper team composition.

Intense Competition: Around 19% of startups fail due to competition.

Lack of Passion: Many entrepreneurs have great ideas but are unable to execute them in the business environment due to lack of passion. Lack of knowledge in the respective field is the main reason for losing passion for business. With passion and proper planning, it is possible to develop a product and bring it to market successfully.

Legal Challenges: No one wants to have legal problems in their business. Unfortunately, such problems are prevalent in the business world. Startups may have to deal with a lot of legal difficulties, which can lead to failure. Legal issues can cause major disruptions if not resolved in time.

Pricing Issues: Pricing is a key factor for startup success. Many startups price their products too high to cover their costs. But it impacts the number of customers.

Scaling too early: Many startups rush to scale. Scaling means hiring new employees, launching new products, entering new markets, raising capital, and growing too quickly. In fact, 70% of startups fail because they scale too quickly.

Government Schemes for Startups in India

The role that startups play in driving innovation and economic growth has been recognised by the government. Hence, many ministries have launched programmes to provide financial, infrastructural and regulatory support to startups. These programmes cover technology, industry, agriculture, healthcare and many other sectors.

  • Atal Innovation Mission (AIM) aimed at promoting innovation.
  • Startup India is a seed fund scheme to support relatively young companies.
  • The Startup India Initiative aims to provide tax benefits to entrepreneurs for a little over five years.
  • The Aatma Nirbhar Bharat App Innovation Challenge aims to support collaborative efforts of Indian startups to develop solutions that will benefit people across the globe.
  • Infosys Ebiz Portal is a Business-to-Government (G2B) collaboration platform that aims to modernize the nation by acting as a communication hub for all investors and entrepreneurs.
  • Software Technology Parks (STPs) are export-only systems aimed at developing and exporting computer software and technology services through physical media or communication infrastructure.

Number of Indian startups going public will more than double by 2025:

With at least 23 cutting-edge technology startups already gearing up for an IPO, the Indian startup industry is set to see a historic IPO boom in 2025. This will be nearly double the total raised in 2023 when 13 cutting-edge technology companies went public. The trend of smaller initial public offerings (IPOs) is likely to continue in 2025 as startups seek fair valuations from public market investors.

With companies like PhysicsWallah, Ather Energy, BlueStone, CarDekho, OYO, OfBusiness and others expected to go public this year, the total amount raised could reach INR 29,000 crore. The INR ($3.4 billion) raised by listed companies in the public market will double in 2024. The rise in IPOs is due to growing confidence among technology startups about their market readiness and strong retail investor interest in cutting-edge technology stocks, as evidenced by the overwhelming interest in MobiKwik and Swiggy in the second half of 2024.

Indian Startup Ecosystem

  • India is emerging as a major startup hub and is ranked third globally in terms of number of startups.
  • Startup growth: By 2023, over 115,000 startups will be identified across industries including technology, healthcare, agriculture, and education.
  • Unicorn boom: India is home to over 100 unicorns, each valued at over $1 billion, demonstrating the dynamism of the ecosystem.
  • Expanding sectors: Startups bring new ideas to key areas such as healthcare tech, fintech, edtech, agritech, and clean energy.
  • The MAARG platform supports early-stage startups through mentoring and advice.
  • Government Programs: A startup-friendly environment is being strengthened through programs such as loan guarantee schemes, fund of funds, and tax exemptions.

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