Advertisement

TCM Sundaram

The author is Founder and Vice President of Chiratae Ventures

More From The Author >>

We Need To Raise Kids With A Problem-solving Mindset For Startup Culture: Chiratae Ventures Founder

TCM Sundaram shares some of the key factors driving the Indian startup ecosystem. Furthermore, he suggests some of the do's to attract capital from investors amid the ongoing funding crunch in the industry

Photo Credit : Pic Courtesy: Pixabay,

Startups: Driving Economic Growth in the coming decade 

Indian startup ecosystem has witnessed a period of high growth where in the past decade and a half. Tech-driven solutions, that solve problems at scale, India has seen unprecedented growth. This is also seen in the investments and best investors have taken.  

Over the past 15 years, around 15,000 startups have been funded since 2007 by different types of investors such as angels, venture, growth and private equity capital. These companies are estimated to achieve revenue of $30 Billion in FY23. We at Chiratae estimate that by 2027 these companies will continue to grow at 40-50 per cent annually compared to the growth rate of about 7 per cent for the overall economy and achieve a revenue run rate of $200 Billion by FY27, which will contribute to 5 per cent of India’s estimated GDP in 2027 compared to the current contribution of 1 per cent of India’s GDP as of now.  

India has absorbed a total of $140 Billion investment by VC/PEs in the past 6 years till 2021, which is expected to grow to $350 Billion in the next 6 years.  

Next Couple Of Decades- Golden Age For Startups 

As technology start-ups disrupt every segment of the economy in India, it will significantly improve productivity and efficiency in the full industries, which will help accelerate the growth of India in the next couple of decades. We now see those born in this 3rd millennium enter the workforce, many of whom are also expected to do start-ups that will shape the future. This makes some of us with experience wish that we were born a few decades later into this era, as the next couple of decades will be the golden decade when India has the last chance to reap the benefits of the demographic dividend before its population stabilises and starts ageing.  

Do’s To Attract Investors For An Early-stage Startup 

Investors look for very large market opportunities that can be disrupted significantly (5-10x or more) and have one or more moats (business and/or technology) that will keep the competition at a distance. A key contributor to the success of any business is the entrepreneur or the management team of the business to orchestrate the successful execution of the business and scale very rapidly. This is mainly to assess if they can generate the required risk-adjusted return from the investments.

While the investors don’t invest if the businesses don’t make the cut on expected returns, it doesn’t mean the end of the world. Typically, only a small percentage of businesses get external investors’ funding and grow significantly to become potential IPO companies. Several other businesses were built without external capital but with internal accruals from the profitability of the businesses.  

Changes In Indian School Curriculum To Mould Entrepreneurs Of The Future 

As we advance, the disruption technology has unlocked will have to be clubbed with education. If we want to build a culture of entrepreneurship to ensure we don’t miss out on the opportunities the next few decades offer. In that case, we need to nurture the school-going kids into a problem-solving mindset by asking questions and exploring new initiatives. School curriculum, teaching and evaluation methods have to be significantly revamped to nurture a project-oriented “Do and Learn” approach instead of one-way communication from teachers. 

Another important thing is to inculcate the global mindset in the youngsters if India wants to realise its true potential in the world order. 

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


Tags assigned to this article:
investment venture capital funds Chiratae Ventures

Around The World

Advertisement