Since assuming power, the Modi government has taken and announced several measures/schemes in regards to promoting startups in the country. But, unfortunately, still, when it comes to funding, the Indian startups are still struggling to keep it together and make ends meet.
According to a recent dipstick survey done by the Internet & Mobile Association of India (IAMAI) of bootstrapping 2,925 internet startups, a large percentage of these internet-based startups are yet to receive any formal funding in the form of loans, business grants or lines of credit.
The IAMAI survey, which was carried out in the cities of New Delhi, Jaipur, Pune, Ahmedabad and Hyderabad, revealed that this shortage of funds persisted even though about 74 percent of these businesses have been leveraging mobile technologies in order to scale up their startups. Further, 12 per cent of the respondents in the survey are offering customers completely mobile-based products.
The survey found out that, “Very few of the respondents had any kind of formal funding in the form of business grants, loans or lines of credit, leave alone Angel or VC (venture capital) funding…it is no surprise that funding is considered to be the biggest challenge.”
According to the survey, to make things right, there’s a need for the Indian government to start funding startups through approved incubators. This will lead to the the startup ecosystem in the country, which is currently the third largest in the world, and the apps economy to grow exponentially.
The survey also threw light on the fact that despite having the second-largest population on Earth, 35 per cent of the surveyed startups believed that “manpower” is a major challenge that they have been facing in their journey to scale up their businesses.
In order to counter the manpower problem, the IAMAI survey suggests that there needs to be a special focus on skilling and retraining, and the government can help in this matter by creating a separate skills development council aimed at skills training particularly for the digital industry.
According to the dipstick survey, mobile is the key platform for new business generation/customer acquisition and customer retention and transaction completion, when it comes to closing a deal.
It also points that post demonetization, digital payment has emerged as a major factor for going the mobile way. According to the survey, “Many startups are in the field of mobile-specific services or into Internet of Things (IoT)-based products, like wearables and other gadgets, and hence completely based on the mobile platform for their products.”
So, the bottom line is, the Indian Startup ecosystem still has a long way to go from being number 3 in the world to being number 1.