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Global Threat from Indian Start-ups

Recently, India ranked among the top 3 countries in the world, with the highest numbers of global firms in ‘Unicorn Club’. 65 companies from US, 13 from China, 8 from India, 5 from UK and 2 from South Korea and 2 from Israel have made their entries to the Unicorn Club.

India is also the youngest startup nation with more than 70% of the founders aged 35 years or below. The most interesting factor is the remarkable participation of female entrepreneurs. There has been 50% rise in the share by women in the year 2015 when compared to that of 2014.

Indian economy has gained full momentum and the subcontinent sees large numbers of emerging enterprises. Such progressive shift in Indian entrepreneurship is seen to be a threat to global firms.

There are multiple growth factors for such a dynamic transformation in Indian economic and entrepreneurial ecosystem.

The major ones are:

  1. Transition of business models: The adoption of digital technology has transformed the way businesses operate in almost every sector including BFSI, healthcare, IT & ITes and entertainment industries. Most of the successful start-ups are online based or e-commerce companies. Digital India initiative launched by Government of India is going to further uplift the IT scenario in the nation. The internet offers an opportunity to establish a store with lesser capital investment than a brick-mortar store.
  1. Adoption of Funding: Earlier venture capital funding in India was not so popular. Many of the successful corporations in India started their ventures by borrowing capital from family and friends. But, the things have changed today as now early stage investments are quite popular. People are chasing their dreams and making things happen.
  1. Competition: India’s IT outsourcing companies have been providing cheaper IT skills and back office services to global MNCs for years. Now the competition has increased and companies are required to offer technology as well as add-ons to survive the competition. Actually, smaller organizations are rising up in the market with venture capital funding. The well trained and experienced engineers have quit their jobs and have started their own companies as well.