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ECOSYSTEM MATURING
Edition 2016
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Google for Entrepreneurs
INDIAN START-UP
ECOSYSTEM MATURING
Edition 2016
Supported by
Google for Entrepreneurs
Copyright 2016
Published by
NASSCOM
Disclaimer
The information contained herein has been obtained from sources believed to be reliable. NASSCOM disclaims all
warranties as to the accuracy, completeness or adequacy of such information. NASSCOM shall have no liability for errors,
omissions or inadequacies in the information contained herein, or for interpretations thereof.
The material in this publication is copyrighted. No part of this report can be reproduced either on paper or electronic
media without permission in writing from NASSCOM. Request for permission to reproduce any part of the may be sent to
NASSCOM.
FOREWORD
India is maturing as a start-up hub with the number of new start-ups expected to grow
by 8-10%. Investors and start-up founders are getting cautious and focusing on
profitability, thus optimizing spends. Since 2011, there has been a noteworthy growth in
the number of technology start-ups, with India expected to cross 4,750 by the end of
2016. Given this momentum, India may host over 10,500 start-ups by 2020, employing
over 210,000 people.
Multiple indicators point to the fact that this ecosystem continues to remain attractive.
The total funding is estimated to reach nearly USD 4 Bn in 2016. Initiatives taken by the
Indian government, growth in academic incubators, rise in the number of start-ups
funded in 2016, ongoing interest from investors, and growing digital consumer base will
continue to drive the start-up landscape.
R Chandrashekhar
Chairman, NASSCOM Several start-ups are leveraging emerging technologies such as Cloud, Big Data &
Analytics, Internet of Things, and Machine Learning to establish some of the best in class
technology start-ups. This maturing ecosystem is contributing to the Indian economy in
multiple ways. In addition to employing 100,000 people and enhancing the lifestyle of
citizens, start-ups are creating innovative technology solutions that address key
problems that India as a country face-around education, healthcare, financial inclusion,
energy/ utilities etc.
We hope this report is useful to you and we welcome your feedback and comments at
Pari Natarajan research@nasscom.in
CEO, Zinnov
Mr. Pari Natarajan Mr. R Chandrashekhar
CEO, Zinnov Chairman, NASSCOM
Acknowledgement
This report has been co-developed by NASSCOM and ZINNOV MANAGEMENT CONSULTING
through a comprehensive four month study to understand the Technology Product & Digital Start-up
Landscape in India.
The preparation of this report has been facilitated by a number of organizations and people who have
extended great help to the research team. We wish to sincerely thank all of them for their valuable
contributions without which this report would not have been possible. Mentioned below are the
names of the research team members that developed this report.
NASSCOM
Sangeeta Gupta
Achyuta Ghosh
Manishree Bhattacharya
Rajat Kohli
Mohit Gupta
Sweta Shanker
Rahul Katyal
Indian Start-up Ecosystem
05 Maturing - Edition 2016
Table of Content
Start-up Landscape
Objective
This report analyzes Start-up India
Stand-up India Funding
Current scenario and emerging
Policies
trends that define the Indian start- Indian Start-up
up ecosystem
Ecosystem
Gauge India's position as a global
start-up hub that is becoming Maturing
attractive for investors, start-ups, &
corporates Edition 2016
Role played by Investors,
Incubators/ Accelerators, Vertical & Tech
Government of India Talent Focus Areas
Incubators/
Accelerators
01 02
Companies Founding members
incorporated/registered should be of Indian
in 2011 and beyond origin
03 Company
04 Intellectual Property
backed technology
headquartered in
product OR technology
India or outside with platform OR
product development
eCommerce OR
centre largely in India
Aggregators considered
In the midst of several debates and contentions over the bursting of start-up bubble, the Indian
entrepreneurial spirit is ever rising, with the landscape evolving in a way like never before. Most people will
say the environment is stochastic the question is which industry is not? With ups and downs in funding, re-
valuations and de-valuations, and emergence of new sectors, India is at a very crucial juncture, chalking out
its own growth trajectory. As thought leaders highlight,
India is paving its own growth path - learning from its successes and failures. The global best practices and
success KPIs are necessary, but important it is to adjust as per Indian landscape. We have unique and ever-changing
market dynamics. Less than 10% of India lives in tier 1 cities. In fact, India has such huge discrepancies in income levels,
it is fair to state that India is not 1 single market but many markets (customer segments) put together. On the brighter
side, we have one of the largest manpower; the government is growing strong on digital initiatives; our biometric system
is the world's largest, and so on, which is prompting the Indian Tech Start-ups to foray in its own unique ways!
It will be fair to state that the ecosystem is maturing, and that the year of 2016, and the next 2-3 years henceforth, will be the years of rationalization,
sustainability, and the unique evolution of the sector. How the industry is shaping-up, and where it is leading to are some of the questions that we
have been able to address in our 4-month NASSCOM-Zinnov rigorous study. The findings are exciting like never before.
Start-up Landscape
Key highlights
rd
India, the 3 largest start-up
Start-up India
ecosystem globally Stand-up Funding
India Policies
4750+ total tech start-ups in 2016
~1400 new tech start-ups
incorporated this year
~100K talent employed in start-ups
Bengaluru, NCR, Mumbai account
for ~70% of the total start-ups
USD 3.8-4.0 Bn funding1 in 2016 Vertical & Tech
Talent Focus Areas
Incubators/
Accelerators
~2000
~1400 Overall tech start-up base in India expected to cross Total Talent in Indian Start-ups
4750, having grown at 10-12% YoY
~1300
8-10% Talent employed in start-ups
1400 new start-ups expected in 2016, up by 8-10% from continues to grow
last year. Indian start-up ecosystem is becoming prudent
with both investors and start-up founders focusing on 210-250K
Note: P = Projected E = Estimated ; 1. Presented numbers for 2016 based on data from Jan-July 2016, 2. Global growth rate based on data for US, UK, India, Israel, and China.
Source: Zinnov Research & Analysis, Yourstory, CrunchBase, Angellist, Deal curry
2014 2016 Central Govt. Action Plan State Govt./ UT Start-up Policies
Govt. of India launched Action Plan for 13+ States/UTs have formulated state level
encouraging start-ups by giving them benefits start-up policies with key features such as
Ease of Doing such as self certification, patent filing fee rebate, incubation of start-ups, funding support,
Business tax exemption mentoring support
Notes: Deals worth USD 2.01 Bn already closed by end of Q2-2016 Legend: Low Focus High Focus
Source: Zinnov Research & Analysis, Yourstory, CrunchBase, Angellist, Deal curry
Distribution of Indian Start-ups by Cities (4,700-4,900) Harbor ~70% of the total start-ups
L
E Financial Institutions (RBI), Stock Exchange
A (NSE, BSE)
70% D MNC/start-up headquarters
E Home to Angel Investors/VCs
60% R
Leaders S Top educational institutes like IIT, IIM
Better connectivity internet, rail, air
Distribution of Funding (%)
50%
3
Bengaluru
40% E Harbor ~20% of the total start-ups
M
Delhi-NCR Home to many IT firms, engineering, medical
E
30% & management institutes like IIT-H, ISB, AFMC
R
G Leveraging the advantage of available talent
20% E
Mumbai Emerging as next major hub
Aspirants N
Upcoming cities T Presence of state-level initiatives/policies
10% Hyderabad
S New incubators coming up
Overseas 2
Chennai Pune
Emergents
0%
0 200 400 600 800 1000 1200 1400 1600
A
4
Number of Start-ups S Harbor 8% of the total start-ups
P Although limited corporate/industry support,
I upcoming cities like Kochi, Kolkata, Jaipur etc. the
R advantage of low operational cost, cheaper
A workforce, along with the support from Central
3
N Govt., are aspiring towards developing their start-
Size Number of Start-up funding deals T up ecosystem
S
Notes:
1. Upcoming cities (Kochi, Kolkata, Jaipur, Chandigarh, Indore, Bhopal, & Kanpur, etc.), 2. Overseas start-ups ((USA, Canada, Singapore, Germany, etc.) include the ones founded by Indians and catering to the India market, 3. Presented data is based
on funding received by start-ups in till Q2- 2016, 4. Estimated based on a sample of 1750+ companies formed from 2011-2016
Sources: Zinnov Research & Analysis, Yourstory, CrunchBase, Angellist, Deal curry
Enterprise SaaS Solutions Big Data & Analytics Big Data & Analytics
Big Data & Analytics Enterprise SaaS Solutions Machine Learning/ Artificial
Electronic Health Record Supply Chain (Logistics) Intelligence
Technology Focus Areas (EHR)
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Aug 2016 ; Source: YourStory, Trak.in, Zinnov Analysis
-
Indian Start-up Ecosystem
Maturing - Edition 2016 16
Start-up Geographical Clusters The Emergents
Receiving similar funds, while Hyderabad becomes Cyberabad, Pune an emerging
Health-Tech hub, and Chennai the B2B storehouse
Infotech advantage - Cyberabad Emerging Health-Tech hub B2B dominance
Presence of technology MNCs like 4 out of 10 funded start-ups are health-tech 55-60% start-ups are focusing on B2B
Microsoft, Google, Facebook Several tech companies like Infosys and with more than 45% product start-
Largest incubation center T-Hub Syntel have their healthcare vertical ups among them
headquartered
Emergents
Hyderabad Pune Chennai
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Aug 2016 ;3. Kolkata is also emerging as new start-up destinations, housing around 30-50 start-ups Source: YourStory,
Trak.in, Zinnov Analysis
ALTHOUGH LIMITED SUPPORT, UPCOMING CITIES ARE EVOLVING AS AN EARLY STAGE HUB
70-80% start-ups are focusing on B2C Multiple support programs such as
Indias first PPP model technology RAIN & partnership driven incubators
incubator, 'Start-up' Village with with more than 50% aggregators
capacity of 10,000 start-ups among them Less rental & operation cost, cheap
Aspirants workforce
3 3 3
Kochi Kolkata Jaipur
<USD 350 Mn
2
Funding Amount in 2016
~6 4-5 3-5
Incubators/Accelerators2
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Aug 2016 3. Kochi, Kolkata. Jaipur, Indore leading cities based on the overall
start-up ecosystem in these cities (# of start-ups, funding deals, incubators/ accelerators, etc.); Source: YourStory, Trak.in, Zinnov Analysis
Start-up Landscape
Key highlights
Start-up India
~8% growth in number of funded start- Stand-up Funding
ups1 in 2016 India Policies
USD 3.8-4.0 Bn funding1 in 2016, down
by 20-30% YoY
Incubators/
Accelerators
Notes: 1. Estimates based on average deal size and number of deals (extrapolated based on number of deals in first two quarters). Deals worth USD 2.01 Bn already closed by end of Q2-2016.,
2. Presented information is based on data available till Aug 2016
KEY TAKEAWAYS
Number of deals up, whereas More interest around seed B2B funding growth outpacing Fin-Tech and Edu-tech
ticket size reduced by 20-25% investments that of B2C Gaining Traction
Indicative of the risk Accel Partners, Reliance Jio, B2B funding growing at 18-22%, 70% of Fin-tech funding in B2B
diversification appetite of Kalaari Capital, Blume Ventures whereas B2C witnessing a start-ups, highest across all
investors etc. raised ~USD 2 Bn corpus for decline of 25-30% verticals -majorly driven by
Average ticket size reduced from deployment in seed and early-stage Average ticket size for B2B financial lending & online
USD 8 Mn to USD 6 Mn in 2016 start-ups in 2016-17 (~USD 4 Mn) remained payment start-ups
Investors are trying to mitigate unchanged; however, B2C Edu-tech start-ups to raise USD
risks by investing smaller amounts (~USD 7 Mn) reduced by ~30% 170 Mn+ funding, up by 3X from
in multiple companies 2015
The decrease in funding doesnt mean that the interest has gone down but more of rationalization has set in. Overall, the interest will remain in the next couple of years.
- Investor Speak.
Notes: 1. Estimates based on average deal size and number of deals (extrapolated based on number of deals in first two quarters). Deals worth USD 2.01 Bn already closed by end of Q2-2016.
2. Extrapolated based on data recorded till Aug 2016. 3. Based on multiple rounds of funding in start-ups funded in H1-2016
Sources: Trak.in, YourStory, VCCircle, Zinnov Analysis
RY S
O ES
S T CC
Investors Investments (USD Mn) Key Verticals (Messenger app offering
SU
HIKE services such as messaging,
Top VC Firms
Notes:1: highest single investments made by leading investor along with a group of investors, 2: Fund raised till September 2016; 3. Presented data is from Jan-Aug 2016;
4. To calculate average investments, single investments worth >USD 100 Mn have not been considered
Sources: Deal curry, Yourstory, Trak.in, Zinnov Analysis
B2C B2B
2016
Top Funded
USD 3.8-4.0 Bn
Total Funding
(USD Mn) (175) (150) (100) (100) (35) (30) (25) (23)
3.4 Mn 7-9%
0.4 Mn 4-6% Ups and downs happen in every industry. India opportunity has not really
shrunk. VCs are just readjusting their strategy. At the same time, angel and
seed funding are going up big time. Focus on technology, stronger unit
Expansion Growth Early Seed economics, significant addressable markets, and long-term business models
(>USD 20 Mn) (USD 5-20 Mn) (USD 1-5 Mn) (<=USD 1 Mn) are what investors are seeking
- Investor Speak
Notes: Extrapolated on the basis of funds raised by end of Q2- 2016
Sources: Trak.in, DealCurry, VCCircle, Yourstory, Zinnov Analysis
Peer to Peer/
Bootstrapping Crowdfunding
Business Lending
Operate on a limited budget incurring Raise small amount of money from a Verified borrowers can seek unsecured personal
optimal expenses large number of investors loans with competitive interest rates
Avoiding unnecessary expenses Avoid accumulating debt or give up Quick and easy application process with
Avoid office rent in beginning; utilize home space equity competitive interest rates
for meetings & discussions
Free PR/ Marketing Tool Entire funding process is digitized and
Staying lean Introduce start-ups overall mission and vision transparent
Try to do coding, product development, sales & to the market Captures and processes over 200 parameters
marketing on your own Easy way to reach various channels incl. media about borrowers digitally
Look for free & low cost resources Proof of concept Low late payment fees and no prepayment
Take support from low cost freelancers Get market validation at an early stage fees
Find free marketing sources and techniques
Avail discounts for start-ups, free hosting No hidden cost
services Minimal fee charged to raise funds. Easier than
getting a bank loan or raising funds from VCs
M&A Spree
U SE
Y
ST CA
D
Funding
80+ M&A deals expected in 2016 eCommerce
2015: USD 5 Mn
2016: USD 23 Mn
1 (Fashion & Lifestyle)
M&A ~60 already successfully executed Investors: Sequoia
Capital + 5 others
5 Acquisitions in 20161
M&A by Region of Acquirer Companies M&A by Business Focus of Acquired To Enter into Premium Men & Women Fashion Segments
Companies
M&A TRENDS
We definitely expect to see more consolidation this
year driven by a few factors acquisitions that are
complementary and synergistic; consolidation to
take out competition; consolidation of cap tables;
and acqui-hires.
Build Technological Product Line Enhance Customer Increase
Capabilities Expansion Experience - Investor Speak
Market Share
Source: Deal Curry, News Articles ; Notes: 1. Data presented is from Jan-Sep 2016
10% Acqui-hire3 8%
Build Technological Capabilities 17% Enhance Customer Experience
Notes: 1. Data presented is till September 2016 2. Customer segment of the acquired company 3. Acqui-hire is buyout of a company for its talent pool
Source: Deal Curry, News Articles, Zinnov Start-up Database, Zinnov Analysis
Acquired a 2 year old start-up, within ~7 months To leverage FabFurnishs online platform and
of its own incorporation delivery model for business expansion
Strengthen market foothold by diversifying its vertical Merged offline Hometown (furniture retail unit) with
portfolio online Fabfurnish
Acquired about 1,000 user base Helps positioning of Future group in online retail
business
M&A
Case Studies
Indian Unicorns Acquiring Global Corporates Acquiring
16% 5%
Indian Start-up Indian Start-up2
To strengthen its online fashion & lifestyle To build solutions in Machine Learning & Artificial
business Intelligence, Conversation as a Platform
Addition of Jabongs 1,500 international brands, To build technology capabilities on chat bots &
strengthening its fashion segment intelligent agents
Continue its dominance in Indian eCommerce market Acqui-hire Wand labs team to develop Microsofts
M&A Share 1 engineering & platform group
Notes: 1. Data presented till September 2016 2. Start-up founding team are Indians
Source: Deal Curry, News Articles, Zinnov Start-up Database, Zinnov Analysis
0%
NCR Mumbai Bengaluru Hyderabad Pune Chennai Tier 2/3
Tier 2/3 cities have maximum mortality rate due to lack of VC funding, Majority of Food-Tech start-ups
and incubation support, which leads to either shut down or relocation
facing stability issues
We had to go to Bengaluru at least thrice a month to meet VCs
Logistics is a low margin process
which is why we preferred to relocate to Bengaluru itself. High discounts led to high cash burn; which imposes burden on unit cost
- Start-up Founder Speak were not focussed on operations & Lack of experienced talent leads to
logistics costs high growth, high risk phenomenon
No. of Failed Start-ups (with Founding Year)
Founding Year (2011) Founding Year (2012)
~140 ~160
Funding challenge for eCommerce firms
Founding Year (2013) Founding Year (2014)
Reduction in funding ticket size
~300 ~250 Cut throat competition from
established unicorns like Flipkart, A fashion eCommerce
Founding Year (2015) Amazon, Snapdeal, Shopclues firm shuts down due to lack
of funding
~120
Start-up Landscape
Key highlights
Start-up India
eCommerce and Aggregators Funding
Stand-up
leading the space, more than 180+
new start-ups2 in 2016 India Policies
Edu-Tech is the fastest growing
vertical in terms of funding1 with
3x YoY growth
Significant disruption in Health-
Tech and Edu-Tech with 100+ &
2
40+ new start-ups respectively
Cloud, IOT & ML/AI are the core Vertical & Tech
technologies disrupting almost Talent Focus Areas
every vertical
Incubators/
Accelerators
Notes: 1. Estimates based on average deal size and number of deals (extrapolated based on number of deals in first two quarters). 2. Extrapolated based on data for ~1750 start-ups recorded till Aug 2016
1.8+ Bn
E EMERGING
VERTICALS M MATURE
VERTICALS
M MATURE
VERTICALS
Established start-ups that have been
1.5 Bn
eCommerce
eCommerce disrupting the market leaving limited
scope for new entrants
Companies backed by deep-pocketed
1 Bn investors
500 Mn
Fin-Tech
Aggregators
E EMERGING
VERTICALS
Edu-Tech Aggregators
Start-ups already challenging the
250 Mn
Health-Tech status quo and partnering with
incumbents to offer future solutions
High interest from investors
Growth in the number of new start-
100 Mn Fin-Tech ups in 2016
Health-Tech
NASCENT
50 Mn N VERTICALS
Start-ups that have started gaining
traction
25 Mn
X-Axis: No. of Start-ups that received
Edu-Tech funding in 2016
10 Mn Y-Axis: Start-up Funding Amount1
(in USD Mn)
5 Mn
N NASCENT
VERTICALS
Lighter color represents 2015 scenario
2015 2016
10 20 30 40 50 75 100 125 150 200
1. Total Start-ups
1 Fastest growing eCommerce market in the world in 2016
Total Start-ups Incorporated in 2016
1500+ 180+ 76% Online shoppers belong to top 8 Indian metro cities
2. Customer Segments1
65% eCommerce sales are generated by mobile/tablet
B2C: 85% B2B: 15%
Niche categories are the key focus for start-ups as Across category hits a plateau
3. Funding2
Categories Illustrative Examples Key highlights
Total funding:
USD 1.8 Bn+ in 2016, Popular Niche Segments
down by ~12% YoY Start-ups are forging exclusive partnerships with fashion brands,
Fashion & Retail leveraging M&As to acquire technology to offer enhanced customer
experience
Food and Grocery Though raised significant funding for growth, biggest challenge for this
4. Top Investors 2 segment is to deal with low profit logistics/delivery of food
Travel & Hospitality Using different strategies such as offering end-to-end tour
customisations, travel audit services, or using fleet of electric vehicles
Home & Decor Emerging sub-segments within home & decor like furniture rentals,
AR/VR4 tech start-ups to get more funding opportunities
Contribute over 20% of the overall funding
Nascent Niche Segments
5. Start-up HQ1,3
1% Key challenges
Healthcare
Licensing, regulatory clearances, approvals to deliver medicine & get
74% 15% 10% doctors on board
Consumer Services (Plumber,
Leaders
Leaders Emergents
Emergents Aspirants
Aspirants Overseas
Overseas Electrician, etc.) High cost of acquiring customers & getting skilled workers
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Q2-2016 3 Leaders: Bengaluru, NCR, Mumbai; Emergents: Hyderabad, Chennai, Pune; Aspirants: Upcoming Cities/Tier-2/3 Cities,
4. AR = Augmented Reality, VR = Virtual Reality ; Source: NASSCOM report , Zinnov Analysis
Living rooms,
bed rooms Baby boys & girls exclusive licensing
furniture shop clothes shop Flipkart is entering into exclusive licensing
agreements with brands like Provogue, Swiss
Military, Carlton London and Chemistry
Rise of eCommerce Enablers1
60+ eCommerce enablers, majorly in logistics and customer engagement going rural
From customer targeting, logistics to Payments, eCommerce enablers are driving
next level of ecosystem growth & gaining investor attention
Partnerships with Store King and Payworld to
reach 300,000 offline, small stores in rural India
Multi channel Enables apps, processes, Digitize merchants with mobile merchant banking,
inventory content & portals to go auto management solutions
management multilingual in real-time
Notes: 1. eCommerce Enablers support eCommerce players in business related operations like supply chain management, logistics, inventory management, predictive analytics, etc.
Sources: YourStory, Zinnov Start-up Database, Zinnov Analysis
1
1. Total Start-ups
Emerging Use Cases Focus Areas of Indian Fin-Tech Start-ups
Total Start-ups Incorporated in 2016
250+ 70+
Mature segments expanding businesses
2. Customer Segments1
Geographical penetration
Payment & Expansion into tier 2/3 cities - creating new
B2C: 49.6% B2B:50.4% Maturing
Wallet
High
Segments user awareness
Lending Tailored go-to-market models - simple user
Platform interface, content in local language
3. Funding2
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Q2-2016 3 Leaders: Bengaluru, NCR, Mumbai; Emergents: Hyderabad, Chennai, Pune; Aspirants: Upcoming Cities/Tier-2/3 Cities;
Source: NASSCOM report , Zinnov Analysis
OPPORTUNITIES
Developing product and services, closely aligned
with governments vision and support system like
Dominating B2B Space Aadhaar enabled payments
Customized value added offering for rural areas
~70% funding received by start-ups offering B2B solutions Microfinance, lending etc.
Robo-advisory & Blockchain
could gain prominence over the
Received a funding of USD 25 Mn in Jan16 next couple of years
Provides ATM services to large banks in the country
CHALLENGES
1
1. Total Start-ups
Total Start-ups Incorporated in 2016 Highest number of deaths during India s healthcare Global Median
child birth expenditure
250+ 100+
Deaths in India are due to chronic 5.2%
2. Customer Segments1 60% diseases 4% of GDP
of GDP 1.2%
of GDP
Dual burden of communicable and
B2C: 76% B2B: 25% Rank Among 190 countries in healthcare 2015 chronic diseases, lack of adequate
2013 2015
112 ranking health infrastructure, and ageing
population create huge opportunity in
3. Funding2 the healthcare space
Start-ups are setting up platforms and addressing the pain points of the industry
Total funding:
USD 130 Mn in 2016,
up by ~60% YoY Key Categories of start-ups Examples What they enable
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Q2-2016 3 Leaders: Bengaluru, NCR, Mumbai; Emergents: Hyderabad, Chennai, Pune; Aspirants: Upcoming cities/Tier-2/3
Cities ; Source: Zinnov Analysis, WHOs Global Healthcare Expenditure Database
1
1. Total Start-ups 24% Gross enrolment ratio, higher education (%)
Total Start-ups Incorporated in 2016
180+ 40+
400
2. Customer Segments1 Mn
Citizens to be provided skill trainings
4 by 2022
3%
62% 20% 16% The Indian Edu-Tech market is highly We face dual challenge, first competition
fragmented, with not a single provider from offline rivals and second availability
Leaders
Leaders Emergents
Emergents Aspirants
Aspirants Overseas
Overseas owning more than 2-3% of the market of free online content
Start-up Founders Speak
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Q2-2016 ; Amount contributed by lead investors alongwith a group of other investors 3 Leaders: Bengaluru, NCR,
Mumbai, Emergents: Hyderabad, Chennai, Pune, Aspirants: Upcoming/Tier-2/3 Cities 4. To be trained under the PMs Kaushal Bharat, Kushal Bharat initiative ;
Source: NASSCOM report , Zinnov Analysis
High
Reasons for growth of core technologies
1
Reducing price, scalability, offer customised solutions, effective
customer targeting, improve process efficiency
Number of start-ups1
Notes: 1 Extrapolated based on data for ~1750 start-ups recorded till Aug 2016; 2. Extrapolated based on data recorded till Q2-2016; Source: NASSCOM report , Zinnov Analysis
Fin-Tech
A cloud-based platform for Real time dashboards using Cloud based SaaS
community learning and cloud platform for measuring applications to efficiently
Edu-Tech CLOUD flow, temperature etc. manage loan portfolios
study material exchange
Health-Tech
Indias competitive advantages will help Indian SaaS companies see strong growth and create USD 50 Bn in value
Energy over the next 10 years, Investor Speak
Media-Tech
Manufacturing and Energy are the early adopters of The commitment from our investors validates the belief in the growth story of Altizon as a leading innovator in the
new technologies Industrial IoT space. Start-up cofounder
"As robotics and artificial intelligence continue to improve, in the future bots will surely replace most conventional
jobs. Start-up cofounder
Solving Energy Providing Quality Improving Health Making India Financial Easy Loan
Problems Education Access Cashless Inclusion Accessibility
Smart monitoring, Online education Access to Digital payments, Inclined with Alternate lending,
energy analytics platforms, healthcare, wallets for Pradhan Mantri Jan- financing
platforms, smart mentoring, rural affordable transactions DhanYojana
transportation, accessibility diagnostics scheme for
solar energy solutions comprehensive
financial inclusion
Provide IOT solution for K12, competition coaching like Portable product that can Mobile platform for Provides prepaid payment Online SMB lending
clean energy CAT, GMAT be used on field for cashless transactions for solutions with Yes Bank platform
healthcare diagnostics micro merchants
Cloud solutions Providing tablet- Portable product Enabled 2,000+ Served 3,00,000 Disbursed INR
for operational based quality that can be used merchants customers per 500 crore in
efficiency, education to on field for month and each 2 years
predictive 2Mn+ students healthcare remits an average Plans: INR 2,000
maintenance, diagnostics, stores of INR 4,000 by crore in 2016
smart grid and data in digital EZdhan service
connected health format, and allows
industries real-time sharing
Start-up Landscape
Key highlights
140+ incubator & Accelerators Start-up India
across India Stand-up India Funding
Policies
Over 40% YoY growth over 2015
with 40 new additions this year
Incubators/
Accelerators
Notes: Incubators provide seed funding, incubate ideas, help in product development whereas Accelerators help start-ups having at least one version of the product in scaling up the business.
Source: Zinnov Research & Analysis
Incubators
Accelerators
Notes: Incubators provide seed funding, incubate ideas, help in product development whereas Accelerators help start-ups having at least one version of the product in scaling up the business.
Source: Zinnov Research & Analysis
Technology: Cloud,
Corporate
2012 No working Cloud storage, CEO coaching, Microsoft alumni Do Not Big Data, ML/ AI
Bengaluru space provided developer tool, team culture program, VC disclose Vertical: Fin-tech, Hi-
software development connect Tech, eCommerce,
Health-tech
Independent
2012 Inter GSF Local & global VC USD 30K- Technology: Cloud,
Co working tools, International firms and angel 60K Big Data, IOT
Gurgaon space provided software's, mentorship investors connect Vertical: eCommerce,
in Delhi-NCR shared
resources M&E, Edu-Tech
Academic
2013 Quality 10 Mbps Frequent visit of 50+ start-up USD 35K Technology: Big Data/
Bengaluru infrastructure broadband, mentors, one on events, annual 300K Analytics, Cloud, IOT
with AC, chair software kit one investor awards, Silicon Vertical: Across
& other (cloud credits) meetings valley road
logistics show
Opportunities Challenges
Start-up Landscape
Key highlights
Proportion of B2B founders
Start-up
increase with age - have at least 6-7 India, Stand-up Funding
years of industry experience India Policies
1 in every 10 entrepreneurs is a
woman
Start-up ecosystem continues to
attract talent from start-ups,
traditional industry & investors
Incubators/
Accelerators
Demographic Overview
Educational
Start-up Founders Proportion of B2B
Qualification of Student Start-ups
Age Distribution Start-ups
Start-up Founders
>50% of start-up founders % of B2B start-ups increase Every 2nd Entrepreneur has Student start-ups to grow
gain corporate experience with founders age as it an Engineering/ MBA with increasing support from
before starting their own demands specific domain background incubators & accelerators
ventures expertise
Graduate
~25%
31% 54%
26-30 MBA 23% YoY Growth Rate
40%
31-45 44% 36% 32%
Professional 35 new institutional
Courses 3%
>45 6% incubators planned under
<25 26-30 31-45 >45 governments 'Start-Up India'
Age (Years)
Others 26% initiative
Median age of start-up founders has reduced marginally from 32 years in 20152 to 31 years in 20162
Notes: Analysis based on a sample size of >1750 Start-ups Sources: LinkedIn, YourStory, Zinnov Analysis ; 2. Median age for 2015 calculated on the sample of 700 start-ups and for 2016
calculated on the sample of 4000 start-ups
Key Challenges
Women Entrepreneurs-2015)
empoWer 15 Total
USD 15 Mn
1st Indian Women Start-up Tech Start-ups Corpus
Accelerator Program Incubated Work-Life Demands Frequent Lack of Investors
India Angel Network invested ~USD 1 Mn in Imbalance Travelling & Focus
4 women based start-ups Networking
Other
Catalyst for Women Info Edge (India) Ltd invested ~USD 2 Mn in
Accelerators
Entrepreneurs 2 women based start-ups
Notes: Analysis based on a sample size of >1250 Start-ups, 1. % of start-ups with women as founder or co-founder, 2. includes 'Others include graduate, science post graduate etc.,
Professional Courses includes Doctors, Journalist, CA etc. ; Source: Zinnov Product/Digital Start-up Database
Employee base in less labour intensive B2B Start-ups in search for seasoned >70% hiring through internal referrals &
1
start-ups expected to grow by ~30% in professional for HR, Finance, Corporate employee networks
2016, while overall start-up talent expected Affairs & Legal functions Required skills include innovative
to grow by ~18% YoY in 2016 mindset, risk taking attitude, cross-
functional expertise & flexible to working
New hirings by eCommerce companies New-age employees require a lot of new-age
hours
1 practices and the key for these practices is
expected to reduce by 50% due to
resource optimization & increasing sustainability. There is a need for matured and
adoptable professionals in all facets of a start-up,
cautiousness among founders
including finance and HR
Shikha Taneja, Senior HR Director, ShopClues.
% Employee Share by Vertical Talent from all Industrial Facets contribute significantly to the Ecosystem
Source: 1Belong (Bengaluru), Data recorded during Nov, 2015 to April, 2016
Start-up Landscape
Key highlights
Action Plan declares 19 guidelines
Start-up
such as self certification, tax India, Stand-up Funding
exemption, patent fee rebate India Policies
13+ states have developed start-up
policies to develop state level
ecosystem
Incubators/
Accelerators
Start-up India Stand-up India A Central Government Action Plan
Funding corpus of USD 1.5 Bn; tax exemptions coupled with other initiatives to boost the
start-up ecosystem
To meet the objectives of Start-up India initiative, Central Government announced an Action Plan that addresses
all aspects of the Start-up ecosystem
Industry-Academia
Simplification and Funding Support and Partnership and
Handholding Incentives Incubation
1 2 7 12 13
Start-up Hub Funding Support through a
Organizing 500 Tinkering
Self-certification Fund of Funds with a Corpus of
Specified 19 guidelines India to act as Start-up Fests Labs with 3D Printers
for compliance USD 1.5Support
Bn (INRthrough
10,000acrore)
a Single Point Funding Fund of in Universities
for start-ups with Labour & spread overof
ofINR
4 years
of Contact Funds with a Corpus 10,000 crore
Environment laws
14 15
8 9 35 Public Private 31 Innovation
3 4
Register 80% Incubators Centres
I see start-ups, through App in Credit Guarantee Tax Exemption on
Rebate on Fund
technology and One Day Capital Gains
Patent Filing 16 17
innovation as exciting Fee
and effective 7 New Research Biotechnology
instruments for 6 10 11 Park Setup Sector Start-ups
5
Indias Relaxation in Faster Exit Tax
No Income Exemption on
transformation. Public (90 days to exit Tax on Profit for 18 19
Procurement business) Investments
3 Years Above Market Value Annual Incubator Focused Programs
Shri Narendra Modi Grand Challenge for Students
Prime Minister of India
To foster innovation and to promote start-up ecosystem, NITI Aayog plans to set up 100 incubation centres across the country
States are aligning with Central Governments Karnataka Government is leading the wave of Indian start-up ecosystem
Start-up India mission and formulating
dedicated state level Start-up policies A dedicated Start-up cell to Start-ups registered with the Start-up
implement Karnataka cell will get software tools, cloud
governments start-up policy credits & other resources
Karnataka's Grand
Challenge to start- Start-up Cell Booster Kit Online portal to
ups to solve enable & educate
Bengaluru's start-ups on State
sewage problems Govt. policies
Key initiatives
Grand Challenge Start-up Portal
www.startup.karnataka.gov.in
Start-up Policy Established
Mo
nth
Start-up Policy work in ly O
progress
ing Ho pen
Yet to frame a policy und use
F
To address issues,
Financial support of grievances, obtain regular
~USD 75 Mn to be feedback. Will be chaired
13+ States/ UTs have already formed start-up policies provided in the form of Bengaluru is one of the top by Karnataka IT Minister
grant/equity 15 start-up cities in the
world. Our aim is to break
Follow up Initiative into the top 10 start-up Along with NASSCOM, Govt. will set
An electronic hardware cities in the world up a 50,000 Sq. ft. Start-up
park in Mysore for Warehouse with a capacity of 100+
Govt. organised first states conference in which states like Priyank Kharge
incubating 25+ start-ups start-ups
Gujarat, Telangana, Karnataka, Rajasthan and Kerala have been Karnataka IT Minister
called to present the work they have done on the start-up
ecosystem, so that other states can follow eHardware Park Start-up Hack-celerator
To meet these objectives, the program brings together key stakeholders of the ecosystem including
start-up incubators / accelerators, angel investors, venture capitalists, start-up support groups,
mentors and technology corporations. We operate as the knowledge base of start-ups' working
models, vertical interest etc. From 15 partners initially, we've grown to a network of 70 partners
today. The program is supported by foundation grants and corporate partnerships.
FUNDING ACCELERATION
From seed capital to growth capital, the By applying to the 10,000 Start-ups program,
10,000 Startups programs helps the startups startups can work with the top accelerator
shortlisted in its program to raise money programs - going through the 10,000
from a wide range of investors- angels, startups program gives you a wider
micro VCs and Government funds. selection of opportunities to choose from
and a quicker route to get accepted into any
of these programs.
Innotrek Its a global connect access program, that gives the brightest tech start-ups a
chance to go to Silicon Valley, get access to global VCs and connect with some of the biggest
and most renowned tech giants of the world.
Hosted by NASSCOM 10,000 Startups, the third edition of Innotrek 2016 commenced on May 02, 2016. It showcased 39
promising startups working through diverse domains like consumer tech, e-commerce, IOT & Cloud, Fintech, Mobile, Multimedia
etc.
The week long immersive program provided an opportunity to the tech startups to engage and interact with global giants and
encouraged them to gain disruptive knowledge from the top entrepreneurs, besides learning the ropes to scale up globally and
forming alliances for competitive advantage.
In a bid to provide maximum exposure and knowledge-sharing, the program kicked off with workshops and discussions by industry
experts covering topics such as legal, fund raising, term-sheet hacks, biz dev and sales, product management among others. Some of
the speakers included Julie Zhou, Facebook; Geoff Baum, Startup Advisor; Anil Advani, Inventus Law; Sumit Gupta, Piazza Venture
Labs; Dinesh Katiyar, Accel Ventures; Ashish Gupta, Helion VC; Ash Lilani, Saama Capital; Ankur Jain, Inclusive Capital; Vera
Shokina, Managing Director, Silicon Valley Bank; David Emerson, Harvard Angels; Jim Connors, SandHill Angels; Indus Khaitan,
Sequoia.
With NASSCOM Product Conclave organised for a day, the startups were exposed to potent sessions with Valley investors and
corporate executives. The highlight of Innotrek 2016 came in the form of campus visits to tech industry powerhouses - Apple,
Google, Facebook, Amazon, IBM and Microsoft where the startups met the product leadership and development teams, and gained
insight on platform capabilities.
With over 46 speakers, 19 sessions, 7 panel talks, 39 startups over 7 days, Innotrek 2016 ended on a high note.
Time taken to
set-up a new 15-30 4-8 4-6 10-15 30-40
2
business (days) United States also has the highest
number of angel investors 300,000.
Nearly about USD 24.1 Billion was
34% invested last year with ~80% of this
Corporate Tax Rate (3 yearsexemption 39% 20% 26% 25% funding invested in seed and early stage
for Indian start-ups)
start-ups
Number of
300+ 800+ NA 200+ NA
VC Firms
2
Number of 3
1,800 300,000 18,000 600+ NA
Angel Investors
China ranks #1 in number of
Number of
3 incubators and accelerators across the
2400+ world due to government driven
Incubators/ 140+ 1,500+ 50+ 130+ (1600 in the last
initiatives.
Accelerators 2 years)
Source: 1. The Global Innovation Index ranks the innovation performance of 128 countries and economies around the world, based on 82 indicators. This edition explores the impact of
innovation-oriented policies on economic growth and development.
Leaders: 74%
Media Tech 150-200 75-90 25-30% 70-75% 40-60 Tiger Global, IDG,
Emergents: 10%
Unilazer Fund
Aspirants: 16%
Harmony Partners, RB
Leaders: 70%
Investments, Abraaj Group,
Food Tech 300-400 50-60 5-10% 90-95% 600-700 Emergents: 12%
Zodius Capital, Lightspeed
Aspirants: 18%
Venture Partners
Leaders: 54%
Matrix Partners India,
Manufacturing 110-140 15-25 70-75% 90-95% 15-25 Emergents: 20%
Idein Ventures
Aspirants: 24%
Notes: 1 Based on startups funded in 2016 and overall number of startups.2. Presented data for funding and number of start-ups funded from Jan-July 2016 3. Leaders: Mumbai, NCR, Bengaluru,
Emergents: Hyderabad, Pune, Channai; Aspirants: Tier-2 Cities. ; Sources: Zinnov Start-up Database, Yourstory, Vccircle, Trak.in
2010 2013
Zero money spent on advertisement, newspaper inserts, The company made a profit of ~USD 9 Mn on revenue
google ads etc. of about ~USD 17 Mn in 2015-16
Focused on product development for both desktop & Winner Bootstrap champ
mobile (customer centric solutions)
Prioritised client satisfaction, got the advantage of word-of-
mouth advertising by our clients
Zinnov Repository:
Zinnov tech product start-up
database
Intellectual Property (IP) backed technology product/ platform/ eCommerce/ aggregators using digital platform for customer
engagement only considered
Start Incorporation Year: Companies incorporated in 2011 and beyond
ups Founder: Founding members should be of Indian origin
Headquarters: Company headquartered in India OR outside with product development centre largely in India
Product: Intellectual Property backed technology product OR technology platform OR eCommerce OR Aggregators
considered
Incubators help start-ups in idea Accelerators support start-ups in building prototypes, scaling by
development, developing prototypes. providing help for fundraising, brand building, customer growth.
They typically offer: They typically offer:
Office space
Shared resources
Incubators/
Accelerators
Research Labs
Developer tools
Library
Co-creation/co-innovation
Start-up boot camps/ e-summits
Client-specific solution
Alumni Support
Investor Connect/ VC Sessions
Faculty & Industry Mentorships
Business Mentorship
Selling of goods & Provide product/ services Support in several Enables financial services Provide learning solutions
services on the internet from multiple sources business related and payments through & services through
operations technology technology
Across, Fashion & Lifestyle, Grocery, Home Travel & Transport, Food, Coupons, Supply Chain Management, Logistics, Payments, Crowdfunding, Financial Lending, eLearning, Course Tutoring & Training, Test
Dcor, Industrial, etc. Events, Real Estate Inventory etc. Financial Service aggregator Solutions, Marketplace
Electronic Discovery, Electronic Health Cloud, Big Data/ Analytics, IOT, Hyperlocal Food Delivery, Restaurant Technology Physical Devices, Smart Sensors,
Record, eCommerce ML/ AI, 3D Printing, Robotics aggregator, Deal Search Areas Wearables, Industrial Automation
Cloud Machine Learning/ Artificial 3D Printing Robotics Big Data & Analytics
Intelligence
Helps in data storage Develop programs to Technology enabled Designs & manufactures Provide solutions to
and accessibility over automate machine in deep 3D modelling to create robot for industrial collect and analyze
the internet learning, pattern recognition solid objects application data
etc.
Software as a service, Infrastructure as Data to text, Predictive Analytics, Printers, Prosthetics, Prototype Industrial Automation Business Intelligence, Marketing Analytics,
a service, Platform as a Service Image Recognition, Decision- Making Workflow Management
Alphapay.in