India ranks fourth globally among startups with over $50 million disclosed VC funding, report finds
India ranks fourth globally among startups with over $50 million disclosed VC funding, report finds
In the latest edition of the Startup Genome’s Scaleup Report, India has achieved a notable ranking, securing the fourth position globally among startups that have received more than $50 million in disclosed venture capital (VC) investment. The report, conducted by a prominent policy advisory and research firm, sheds light on India’s standing in the global startup landscape.
According to the report, only three countries have surpassed India in terms of disclosed VC funding for startups, and these are the United States, China, and the United Kingdom. Out of the 12,400 startups surveyed across 80 cities in 40 countries, the United States led the way with 7,184 scaleups, followed by China with 1,491, the United Kingdom with 623, and India with 429.
However, when it comes to the total VC investments received by these scaleups and their cumulative tech value investment, India surpassed the United Kingdom. Indian scaleups were associated with VC investments worth $127 billion, while the total value of tech investment reached an impressive $446 billion. This data reflects India’s growing prominence and attractiveness in the global startup ecosystem, as it continues to attract substantial VC investments, indicating a thriving and dynamic startup landscape in the country.
The Scaleup report highlights India’s impressive scaleup rate, emphasizing that over 50 percent of India’s startup outreach extends beyond Asia. This significant global outreach is explained in the report by noting that, in large countries outside of the United States, startups tend to focus on scaling effectively within their domestic markets first.
The rationale behind this approach is that these domestic markets are substantial in size, which justifies delaying global expansion efforts. For example, numerous Business-to-Consumer (B2C) startups in India have achieved unicorn status without the immediate need to target a global audience.
The report introduces the concept of the “local connectedness index,” which measures the quality, density, and size of a startup’s local network. It suggests that startups in their early stages experience higher revenue growth when they have a higher local connectedness index. This underscores the importance of building strong local networks and relationships for emerging startups, as these connections can contribute significantly to their growth and success.
The report provides additional insight into the relationship between a startup’s local connectedness index and its scale-up rate. According to the findings, startups with a local connectedness index of six or higher experience a notably higher scale-up rate of 5.1 percent. In contrast, startups with a lower local connectedness index, ranging from two to four, achieved a slightly lower scale-up rate of 3.8 percent.
This data underscores the positive impact of strong local networks and connections on a startup’s ability to scale and grow. Startups with a more extensive and robust local network tend to have a higher likelihood of achieving scale and success in their early stages. Building and nurturing local relationships and partnerships can be a crucial strategy for startups aiming to expand and thrive in their initial growth phases.
