The last two years saw a tectonic shift across sectors, brought about by the pandemic and ensuing lockdowns. Thanks to the rapid advancements in the field of deep-tech and digital technologies, our lives didn’t come to a standstill, and these played a pivotal role in helping us move forward.
Deep-tech companies and startups are expected to create a much bigger impact in the coming year. Innovation, collaboration, and entrepreneurship are the three key pillars that make the Indian startup ecosystem as vibrant and dynamic as it is today. Although 2022 promises to be a year to remember, the lessons learned in the last two years will become key as startups navigate through the new normal.
Here are some trends that the startup ecosystem in India will see in the coming year.
1. A larger investment pool
Technology-led startups and their solution offerings played a vital role when the pandemic caused billions of businesses to digitally transform their operations. Among the key technologies adopted, cloud computing proved to be the clear winner. It quickly became the primary infrastructure for millions of people having to work and learn from home. The surge in demand for cloud software led to big returns, which is expected to continue well into 2022. As cloud computing continues to be the preferred mode of operations, VCs will look to increase their investments in B2B tech startups that are driving cloud solutions across sectors. Indian SaaS companies are likely to touch $30 billion in revenue, capturing eight to nine per cent share of the global SaaS market by 2025, according to the Indian Saas Report 2021. In a way, this points to a growth in interest that will be generated amongst the investor community.
2. A transformed deep-tech ecosystem
A new Indian deep-tech ecosystem is emerging, driven by innovation, and fueled by investors who have pumped in significant funds in the sector. This year, the Indian startup ecosystem outdid itself, with startups raising as much as $26 billion within the first eight months of the year. With a young population and increased connectivity, the emergence of companies going public, and startups building deep technological solutions, India’s vantage points are unique. The use of deep tech has become more of a need than an option. As sectors such as healthcare, education, industry, manufacturing, and others have increasingly adopted its use in their operations, it is safe to say that India is the next deep-tech hotspot.
3. A bigger and stronger unicorn club
India is becoming the world's fastest-growing startup ecosystem. In a recent Mann ki Baat episode, Hon’ble Prime Minister Narendra Modi stated that there are over 70 unicorn startups, as of 2021. These organizations are valued at approximately $168 billion and India now has the world’s third-largest unicorn ecosystem after the United States and China. It is said that fintech, SaaS, and e-commerce will continue to grab the bulk of investments and 2022 can expect many more such startups joining the unicorn club.
4. Collaboration between corporates and startups
Partnerships between startups and large global corporations are critical to the advancement of technological innovations and this association is important for the long-term growth of businesses of all sizes. With more B2B startups eyeing global expansion, it is important for them to have access to a high scale of infrastructure and support. To a great extent, this can be provided by large corporates that will help these startups access the pool of data they have. Validating this, a recent report by Zinnov stated that the relationship between large corporates and startups will be further strengthened, basis the need for the latter to ramp up their team and optimize the resources that corporates offer through their accelerator programs.
As we move into the new year, innovation will continue to drive the startup ecosystem. 2022 will be a fruitful year for new-age technologies, as they make a stronger impact on society. India’s startup space is driven by a passion to build cutting-edge solutions. We have a lot to look forward to, and through collaboration between corporates and startups, we can expect to see the business landscape in India transform before our eyes.