Startups in India see 108% growth in funding in 2018, says NASSCOM

Image for representational purpose only

Image for representational purpose only

Nasscom president Debjani Ghosh Thursday said cryptocurrencies were illegal and asked players to obey the law and seek clarification from the government if they are unhappy with it. Ghosh said from Nasscom perspective, it was very clear that cyptocurrencies were illegal.

However, Nasscom noted that funding at the seed stage is in decline.

The IT industry association, whose remit includes safeguarding technology startups in India against regulatory and legal hurdles, has instead urged the nascent crypto sector to take up any grievances directly with the government.

India added 1,200 new technology startups in 2018 against 1,000 added past year, retaining its position as the world's third largest start-up ecosystem, a report by Indian software alliance Nasscom said in a report.

"The genesis of this problem, however, lies in the failure of policy-making not keeping pace with rapid technological changes", Debjani Ghosh added.

As per a Nasscom report titled the "Indian startup ecosystem - approaching escape velocity", over 1,200 startups came up in 2018, including eight unicorns, taking the total number to 7,200 startups.

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The number of deep-technology startups are growing at 50% every year even as the overall startup ecosystem grows at 12% annually, according to NASSCOM's report.

Seed stage funding fell in 2018, while late stage funding increased by 259% to $3 bn in 2018 from previous year, as per a startup report by industry association Nasscom. Early-stage funding registered near-flat growth of 4 percent with $1 billion. Unicorns are privately funded companies that have a valuation of more than $1 billion. The number of new tech startups had fallen for the first time in five years in 2017 with a slowdown in funding. Last year, seed-stage funding had dropped 53%. We have to think about an alternative for seed stage, where the government can play a role, as in China and Japan. "If you fail at the seed stage, innovation is hit". Indian startups also witnessed rapid expansion, with a number of startups foraying into the worldwide markets.

Most of these startups were in the business-to-business (B2B) segment, which contributed to 43% of the total startups founded in 2018, the report said.

Last month, OYO raised $1 billion in funding from Softbank, valuing the hotel chain at $5 billion. IoT, data analytics and AI contributed one-fourth each of the total startups founded.

There was 120 percent funding growth for AI startups with $150 million investments made in this field in 2018.

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