India added 1600 tech startups in 2020, making it one of the largest tech startup hubs in the world with 12 unicorns and 12500 tech startups. According to the National Association of Software and Services Companies (Nasscom), India added 1600 tech startups despite the pandemic in 2020. This is the highest addition that has been experienced by the Indian tech ecosystem in the last three years. Today, India is one of the world’s largest tech startup hubs with 12 unicorns and 12500 tech startups.
As a result of Covid-19, global output shrunk by 3.2% in 2020 but the technology sector in India witnessed growth by 2.3%. The tech startup base in India experienced 8-10 percent year-on-year growth and increased digital adoption. This led to the growth of new tech startups, who capitalized on the opportunity. The technology sector in India contributed 8% share to the GDP even amidst the whirlwind of Covid-19. Although 2020 saw a dip in investments as compared to 2019, healthcare industry and Banking, financial services, and insurance (BFSI) grew exponentially during 2020.
Increase in Digital and Deep-tech Adoption
In 2020, organizations enhanced their capabilities to align themselves with the latest digital trends. Digital adoption witnessed exponential growth due to the government’s initiative of Atmanirbhar Bharat (self-reliant India). Re-balancing their spending on technology, organizations, prioritized digitization which led to an overall 10% shift in outcome-based pricing. Driven by hardware-led demand, the Indian domestic market scale grew at 3.4% in 2020. With innovation being the key focus of 2020’s Atmanirbhar Bharat, it is expected that the Indian tech ecosystem will experience increased growth and revenue in the years to come.
With most organizations focusing on deep-tech such as AI and ML to build their product competencies, 2020 witnessed that out of the total investments made, 14% was made in deep-tech-based startups. This has pushed organizations to incorporate deep tech in their DNA. The industry also saw the rise in cloud adoption across different enterprises. Innovation and accelerated digital adoption has positioned tech startups as a key contributor for India’s economic growth.
Towards a trillion-dollar digital economy
NASSCOM said that India’s tech industry, while focusing on digital upskilling, continues to be the net hirer. It is expected that approximately 138,000 new hires will happen in FY2020-21, which will boost the employed base and increase the talent pool to over 1.17 million. As per NASSCOM’s CEO survey, around 95% of CEOs across India believe that hiring will increase, and the Indian tech industry will grow further in 2021.
Tech startups in India not only managed to stay afloat but converted the crisis into opportunity amidst uncertainties of the pandemic. With positive news of Covid-19 vaccination, it is expected that the tech startup space in India will further witness a transformation journey and march towards a trillion-dollar digital economy goal.