Page 43 - Banking Finance August 2022

ARTICLE

consumers has brought about 500 million new users and,
thus, increasing internet penetration by 12 per cent.
Integrating a tech-platform, connecting doctors and
patients, has also led to a significant rise of 8 per cent in
Health Tech space. Over 500 startups in this domain have
come up, comprising online pharmacies, wearable solutions
for fitness tracking and coaching, health monitoring devices,
consultation platforms etc. In the same way, the technology-
induced educational solutions for the new generation of
learners and the wide level of acceptance in the ecosystem,
has resulted in the creation of over 400 startups implying a
growth rate of 6 per cent in the last five years. Industry
verticals like logistics and transport, industrial &
Council held in April 2021, it was found that startups
manufacturing, consumer software, food-tech, HR-tech and
have the potential to become the World's largest and
retail-tech witnessed a growth rate in the range of 2-5 per
most innovative startup ecosystem. As a first step, there
cent.
is a need to sow the seeds of entrepreneurship even at
school level to encourage students to innovate. The
The others including automotive, travel, media &
Council also calls upon the successful entrepreneurs to
entertainment, ad-tech, real estate, gaming, security, etc.
take initiative to share their knowledge, experience,
have a collective growth rate of 24 per cent. Thus, the
ideas and mentor the other entrepreneurs.
number of startups incorporating advanced technology in
their business has soared and is constantly expanding at 40
Progress of Startup Scheme in India: per cent CAGR. These include artificial intelligence, block-
As per the Startup India web-site, the number of startups chain, 3D printing, drones, automation vehicles etc.
stood at 41,061 in December 2020 which provided jobs to
4.7 lakhs persons. These provide jobs with an average of The report of Pilot Survey of Startups, conducted by RBI in
11 employees per startup. Encouraged from this 2019 shares additional information relating profile of
development, a Fund of Fund for startups (FFS) is created startups. A total of 1,246 startups participated in the survey.
with a total corpus of Rs. 10,000 crores. Among the startup As per the survey findings, the startups are mainly in six
industries, the Indian pharmaceutical market is the fastest- sectors, viz., agriculture, data & analytics, education,
growing and the most competitive amongst all in the world. health, IT consulting/solution and manufacturing. According
The revenue generated in 2020 amounted to $55 million, to them, market/industry demand and team experience
clearly indicating that there is enough scope for profit in the have been the major enabling factors for setting up the
domain. startups.

Location wise, startups are set up in 492 districts in 29 states Almost half of them informed that they were in an early
and six Union territories. Startups are spread and far wide stage of revenue generation while 31 per cent of the same
since these seen in Tier 1, Tier 2 and Tier 3 cities with the were in a growing stage. The average annual turnover for
percentage share in the total startups of 55, 27 and 18 over one-fourths of the respondents was up to Rs 10 lakhs
respectively. Gender wise, nearly 15 per cent of them are whereas around 20 per cent startups did not report any
set up by woman entrepreneurs. Regarding growth in revenue generation. Less than one-fifths of the respondents
different segments, Enterprise Software witnessed a growth reported that their average annual turnover exceeded Rs.
rate of 16 per cent with over 1100 ventures and, so did the 1 crore. Only 14 per cent of startups had more than 10
FinTech segment with a growth rate of 14 per cent. More employees in the first six months of their operation but as
than 900 startups are due to the onset of innovative the sector matured, the number of employees increased to
technology in payment, lending and banking. 40 at the time of conducting the survey.

Similarly, the seamless digital transaction process for Lastly, it is shocking to note that just 36 per cent of the

BANKING FINANCE | AUGUST | 2022 | 43