The Indian startup ecosystem is in a slump. Once an industry bustling with numerable startup debuts every hour, it is now losing its sheen every succeeding year.

According to latest statistics made available by Bengaluru-based startups tracker Tracxn, as against 10,906 startups founded in India in the year 2015, the number has now crumpled down to a disappointing 497 startups in 2017 so far. During the years 2014 and 2016, the figure was above the 5,500 mark. Hence, the 497 startups 2017 statistic points towards the fact that the Indian startup is possibly looking at its slowest year in terms of number of startups founded in last three years, and that too by a leaping margin.

In addition to the slowing number of ventures taking birth, the Indian startup industry is also going through a sluggish period of number of investment deals taking place in this year. The Indian startup industry, which was once the apple of every investor's eye is now seeing experienced investors tightening heir pursue strings and taking much longer than before concluding transactions.

The year 2016 wasn't a good one for Private equity (PE) and venture capital (VC) investments in India. After having a dream run in 2015 with $19.6 billion across 767 deals, 2016 saw this number come down to $16.2 billion across 591 deals. According to data provided by EY, it was 18 per cent decline in terms of deal value and 23 per cent in terms of deal volume year-on-year.

Unfortunately, the year 2017 has seen these numbers depreciating even further. VC investments in the Indian subcontinent hit a three-year low mark in the second quarter of 2017 with $275 million making its way into the industry through 78 deals. The figure is 25 per cent lower when compared investments locked in during the same period last year, and 7 per cent lower than the previous quarter of 2017, which saw 84 deals worth $349 million successfully going through.

While the overall environment when it comes to statistics is particularly glum in the industry, investors, however, feel that all is not lost. In fact, they feel the less number of startups and entrepreneurs entering the market mean that only quality products/services are now making their way into the promising sector. They also believe that even though the number of new startups has shrunk up, the number of market segments where startups are being formed has expanded beyond the over exploited e-commerce sector. This is giving VCs are wider choice to choose and invest their money only in startups and causes that they truly believe in.

While the number of startups taking birth has gone down drastically, the number of startups bidding adieu to the Indian startup ecosystem has gone up. According to data from Traxcn, while 437 startups shut down in 2015, this number increased to 450 in 2016 and in 2017, it is about 130 till date.

Read: 11 Promising Indian Startups that Shut Down in 2017 [January- July’17]

All the aforementioned figures point towards the fact that the Indian startup industry needs attention. More than schemes, programs and initiatives, it needs direction from the industry veterans and the government on what to do and what no to. In the race of World Startup Ecosystem, India might have begun strongly but it's slowly losing sight of the prize by following the copycat trend. It's the need of the hour for the industry to understand that uniqueness and innovation always go a long way.
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