National Startup Day is observed annually on January 16 to honour the critical role that startups play in promoting innovation, economic expansion, and independence in India. started by Prime Minister Narendra Modi in 2022 to commemorate the Startup India initiative, this day serves as a reminder of how entrepreneurial spirit can change a country's future.
India's startup ecosystem, which is the third largest in the world with over 1.6 lakh government-recognized startups, has become a potent driver of economic development as the nation commemorates the ninth anniversary of its Startup India initiative in the form of National Startup Day. The commerce ministry's data shows that the businesses have generated more than 1.6 million jobs nationwide.
As on June 30, 2024, DPIIT has recognized 1,40,803 entities as startups. Since the launch of the Startup India initiative in 2016, the DPIIT-recognised startups have created over 15.53 lakh direct jobs as on June 30, 2024.
The State/UT-wise total number of DPIIT-recognized startups during the past two years in 2022 is 26,596, and in 2023 it is 34,842.
National Startup Day History:
When the Startup India Scheme was introduced in 2016, the idea of recognizing startups gained traction. Since then, the Indian government has launched a number of programs aimed at encouraging innovation and creating a welcoming atmosphere for new businesses. In 2022, Prime Minister Narendra Modi proclaimed January 16 to be National Startup Day in recognition of the economic contributions made by startups in India. The announcement, which highlighted the importance of entrepreneurial endeavours, was made during the inaugural Startup India Innovation Week.
National Startup Day has evolved into a forum for praising exceptional startups and encouraging cooperation between business owners, financiers, and legislators.
Major reasons for the failure of Startups in India
Market problems: Many startups fail in India when they do not solve an existing market problem. This is one of the main reasons why startups fail in India. On average, 42 per cent of startups fail because they are not able to solve market needs.
Wrong business model: One of the common causes, why startups fail in India, is that entrepreneurs are too optimistic about how easy it will be to acquire customers. They just think building an attractive website, or service will open up the doors of success for them.
Ignoring customers: Ignoring your customers is a tried and true way to fail. Many startups do not find the time to get interacted with their users. They do not know the opinions of their customers about their products. This is where they start losing the game & the reason why startups fail in India. They fail to pay attention to their customers and adapt to their needs.
Insufficient funds: Almost 29% of startups fail in India due to a lack of funding.
Challenges with the development team: Statistics show that almost 23% of startups fail due to the wrong team.
Strong competition: Almost 19% of startups fail due to their competitors.
Lack of passion: Many entrepreneurs come up with great ideas but they do not sustain them in the business ecosystem due to a lack of passion. The lack of knowledge in their particular domain is the main reason to lose passion for the business. If you have the passion and proper planning, it is possible to build a product and market it successfully.
Legal challenges: Nobody wants any legal problems in their business. But by misfortune, such kinds of problems are very common in the world of business. Sometimes, a startup might face a lot of legal complexities and this can be the cause of failure. The legal challenges can create a big mess if you do not sort them out on time.
Pricing issues: Pricing is a major factor when it comes to startup success. Many startups set the prices of their products high to cover the costs. But it affects the number of customers.
Scaling too early: Many startups are in a hurry to scale. Scaling refers to hiring new people, releasing new products, entering new markets, getting funded- and growing too much too soon. In reality, 70% of the startups scale up too early and get failed.
Government Schemes for Startups in India
The role that startups play in fostering innovation and economic expansion is acknowledged by the government. As a result, numerous ministries and departments have launched schemes to give startups financial, infrastructural, and regulatory support. Technology, industry, agriculture, healthcare, and many other industries are covered by these schemes.
- Atal Innovation Mission (AIM) with the aim to promote Innovation.
- Startup India Seed Fund Scheme to support relatively early-stage enterprises.
- Startup India Initiative with the aim to provide tax benefits to entrepreneurs for a little more than 5 years.
- The Aatma nirbhar Bharat App Innovation Challenge aims to support Indian startups in their collaborative efforts to produce solutions that benefit people worldwide.
- Infosys' Ebiz Portal is a platform for business-government (G2B) collaboration that aims to help modernize the nation by acting as a communication center for all investors and entrepreneurs.
- Software Technology Park (STP), is a system that is solely dedicated to exporting, with the goal of growing and exporting computer software and technical services via physical media or communications infrastructure.
Number Of Indian Startup initial public offering (IPOs) To More Than Double In 2025:
With at least 23 cutting-edge tech startups already on track to go public, the Indian startup scene is set for a historic IPO boom in 2025. This would nearly double the total from 2023, when 13 cutting-edge tech companies went public. As startups seek appropriate valuations from public markets investors, the trend of smaller initial public offerings (IPOs) is expected to persist in 2025.
With companies like PhysicsWallah, Ather Energy, BlueStone, CarDekho, OYO, and OfBusiness anticipated to go public this year, the total amount of INR 29,000 Cr ($3.4 Bn) raised by listed companies from the public markets in 2024 may double. The increase in public listings is a result of tech startups' increasing confidence in their readiness for public markets as well as retail investors' strong interest in cutting-edge tech stocks, as demonstrated by the overwhelming interest shown in MobiKwik and Swiggy at the end of 2024.
Startup Ecosystem in India
India has emerged as a leading hub for startups, ranking third globally in terms of the number of startups.
- Startup Growth: By 2023, more than 115,000 startups from a variety of industries, including technology, healthcare, agriculture, and education, had been identified.
- Unicorn Boom: India boasts more than 100 unicorns, each worth more than $1 billion, demonstrating the ecosystem's dynamism.
- Sectoral Expansion: Startups are bringing new ideas to vital fields like healthcare technology, fintech, edtech, agritech, and clean energy.
- The MAARG Platform helps early-stage startups by providing mentorship and advice.
- Government Programs: The startup-friendly environment is improved by programs like the Credit Guarantee Scheme, Fund of Funds, and tax exemptions.
