Industry veteran and former Infosys director TV Mohandas Pai has made a crucial statement concerning Indian startup ecosystem, as he said that 60% of startups in India may fail owing to lack of market and other factors. He, however, also added that all startups have bright future.
India has about 30,000 startups employing about 3.5-4 lakh people and every year about 5,000-6,000 such ventures are sprouting. “Last year, Indian startups received about $13.65 billion in funding. Today they have created about U$95 billion of value,” Pai, also a chairman of Manipal Global Education, told PTI in an interview.
Earlier, Pai had also said that India will have 1 lakh active startups by 2025, employing about 32 lakh people.
According to Pai, startups mortality rate is very high and about 60 per cent of them will fail, explaining that this is the nature of the industry. He then added that most startups may not scale up or get a market as they are all started by first time entrepreneurs. To recall, in a recent EDII report on situation of entrepreneurship and business, business discontinuation in India is among the highest in the world at 26.4%.
“First time entrepreneurs may not know how to tackle the business but the good news is that even if they fail the experience they get from building a business or becoming a problem solver is enormous,” Pai said.
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A year back industry body FICCI, in its report suggested that startups in India need government support to lessen the number of failures and revealed that startups success rate is not up to the mark in the country.
Also, few days back we reported that in 2018’s Asia’s startup-friendly countries list, India stands at 8th rank — behind China and even — Malaysia because of the very fact that it is still the poorest country in Asia with GDP per capita of $1,710, in 2017 and a high unemployment rate.