How the start-up ecosystem is thriving in India with the help of private capital

Economic growth over the last few years has truly spurred the Indian start-up ecosystem.

The India stack of digital assets and digital public goods and services has laid a sound foundation, on which the start-up businesses are innovating and growing. It is the development of this digital infrastructure, which has fueled much of the growth of start-ups in India. A robust availability of private capital from Venture Capital and Private Equity funding in India has supported the boom in start-ups.

Start-ups often develop new products and services that address unmet or new needs and seed new industries. They bring in innovations, create new jobs and increase the competitiveness of the economy. Growth of start-ups has been remarkable over the last six years, with India emerging as the third largest ecosystem for start-ups globally after the US and China.

Supportive Venture Capital and Private Equity funding

While funding has gone to a variety of investments, for e.g., buyouts, real estate and infrastructure, the largest flow has been to support start-ups. In 2021-22, US$33.3b, approximately 40% of this funding was provided to start-ups.

Investment appetite has grown on the back of successful exits through both public markets and secondary sales.  In 2021-22, the value of exits for Private Equity and Venture Capital firms was recorded at US$42.5b demonstrating the value investors have been to create in India through their investments.