NASSCOM forecast: Tech start-ups to create more jobs

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Better access to initial funding is responsible for the spurt in Indian tech start-ups, leading to more jobs…

The National Association of Software and Services Companies (NASSCOM), in a publication titled Tech Start-ups in India: A Bright Future, reports that with the rise in the number of start-ups in the country, India could be leading the next wave of hiring.

According to the report, more than 800 new businesses were established in India in 2014 on the back of new business opportunities, more capital and a large network of mentors to guide them. More than half of these start-ups came up in Bangalore and the Delhi-NCR region.

The publication also points out that Indian technology start-ups—over 3000 in number—make India the third largest base for start-ups. The number is expected to touch 11,500 in the next five years, and employ nearly 2.5 lakh people. With funding aspects within the technology ecosystem maturing, those starting out have better access to venture capitalists, private equity firms, angel investors, incubators, financial institutes, and even banks willing to invest in ideas. In fact, in the period 2010–2014, NASSCOM estimates that close to $US 3 billion have been invested in Indian start-ups. Nearly 300 of these came up via the venture capital and private equity (VC/PE) route and another 250 had angel investors who promoted them with a total investment support amounting to $US 2 billion. This period also saw over 20 mergers and acquisitions amounting to $US1 billion.

Speaking about the growth in start-ups, Mr R Chandrashekhar, President, NASSCOM, said, “The Indian start-up ecosystem is rapidly evolving, driven by an extremely young, diverse and inclusive entrepreneurial landscape. This is leading to the emergence of focussed domain solutions for verticals like healthcare, agriculture and education. An additional driving force is a four-fold increase in access to capital through VCs, angel investors and seed fund. This is allowing Indian entrepreneurs to work on building tailor-made products for their customers.”

NASSCOM itself has an initiative called ‘10,000 Start-ups’, aimed at promoting entrepreneurship. The initiative, supported by Google for Entrepreneurs, Microsoft Ventures, Verisign, Kotak and Intel, has been instrumental in promoting digitalization, faster innovation cycles, as well as the rise of young and ambitious talent.

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