The entrepreneurial spirit in India is booming at an unprecedented rate, thanks to promising governmental initiatives like Startup India, MSME Market Development Assistance (MDA), NIDHI Scheme (National Initiative for Development and Harnessing Innovations), and many more, which empowered the innovative minds and provided room for experiment in the conventional business landscape.
Not just that, several other factors have provided the breeding ground for small-scale businesses to thrive, such as the technological boom, increasing FDI, expanding middle class, etc. In the past few years, we have seen some regional low-budget businesses becoming unicorns by overcoming the obstacle of limited budget and funding.
In this blog, let’s learn about some of the small Indian businesses that overcame budget constraints and secured their place among the country’s successful entrepreneurs in addition to the factors fuelling the Indian startup landscape.
What Are The Factors Fuelling The Growth Of Booming Indian Startups?
Digital Transformation
The increasing adoption of digital technologies across various industries has created opportunities for startups to innovate and disrupt traditional business models. E-commerce, fintech, health tech, edtech, and other sectors have grown significantly.
Government Initiatives
Initiatives such as “Startup India” have provided support and incentives for startups, including tax benefits, funding, and ease of doing business. These policies aim to create a favourable environment for entrepreneurial ventures.
Investor Interest
A surge in domestic and international investments has fueled the growth of Indian startups. Venture capital firms, private equity, and angel investors have shown a keen interest in supporting promising startups.
Young Demographics
India has a large and young population, which provides a ready market for products and services, especially in sectors like education, entertainment, and consumer goods.
Rising Middle Class
The growth of the middle class has led to increased consumer spending, driving demand for various goods and services. This trend benefits startups in sectors like e-commerce, food delivery, and lifestyle products.
Technological Advancements
Access to advanced technologies, such as artificial intelligence, machine learning, and cloud computing, has enabled startups to develop innovative solutions and scale their operations more efficiently.
Entrepreneurial Culture
There has been a cultural shift with more individuals opting for entrepreneurship, encouraged by success stories of startups and a growing acceptance of risk-taking.
Fintech Innovation
The Fintech sector in India has seen significant growth, driven by digital payments, lending platforms, and other financial services. This growth is facilitated by the increasing penetration of smartphones and internet connectivity.
Here Are Some Of The Indian Startups That Overcame Budget Constraints
- Zomato
Following the dotcom crash in the early 2000s, Zomato’s 12-year journey under the direction of two IIT graduates, Deepinder Goyal and Pankaj Chaddah (who departed the company in March 2018), served as an inspiration for several other second-generation internet entrepreneurs in India.
The idea of finding restaurants online in India was introduced by Zomato. It goes without saying that with the aid of several original marketing and brand-building initiatives, it quickly forged a relationship with consumers between the 25 and 35 age group, who would often end up hopping on the internet from one portal to another for food options.
Zomato’s growth journey is unmatched, with over 1.4 million restaurants listed, 12,000 restaurant partners, and 285,000 delivery partners operating in over 1,000 cities.
- Paytm
Established in August 2010 by Vijay Shekhar Sharma with a $2 million seed investment, Paytm has expanded rapidly. It is predicted to be worth over $6.3 billion in 2020, placing it among India’s top 10 most valuable brands.
In 2013, Paytm expanded its services to include postpaid mobile, data card, and landline bill payments, even though it was initially only a prepaid mobile and DTH recharge platform. After that, in January 2014, it introduced the Paytm wallet, which Uber and the Indian railways ultimately decided to use to their advantage. Paytm subsequently began offering online ticketing, bus, and eCommerce services.
- BYJU’s
Byju Raveendran established BYJU in 2011. Byju first began instructing kids on arithmetic fundamentals through in-person coaching sessions. However, he quickly became aware of the shortcomings of teaching in a classroom and recognised an opportunity to use technology to improve the literacy experience. Through the integration of technology and his teaching expertise, Byju set out to create an online learning platform that would transform education.
In 2016, BYJU became the first Asian startup to receive money from the Chan-Zuckerberg endeavour, a charitable endeavour by Facebook founder Mark Zuckerberg and his wife Priscilla Chan. When BYJU became a unicorn back in 2018, it was the first Indian edtech business to be accepted into the esteemed unicorn club of Indian startups.
- Purplle
Ever since its establishment in 2011 by Manish Taneja, Rahul Dash, and Suyash Katyayani, Purplle has grown to rank among India’s largest e-commerce companies for beauty products. Through 14 funding rounds, the company has raised over $296 million from investors including Blume Ventures, JSW Ventures, and IvyCap Ventures. With over 30,000 goods from over 650 brands as of 2021, Purplle is associated with some of the most well-known names in the market, including Lakme, Maybelline, L’Oreal, and Neutrogena.
- Livespace
In December 2014, Anuj Srivastava, Ramakant Sharma, and Shagufta Anurag established Livspace. Building and developing online businesses was familiar territory for the trio, who had previously collaborated at eBay, a global e-commerce platform.
The Livspace company launched its modular kitchen and wardrobe private label in December 2015, initially offering its services in Bengaluru, New Delhi, and Mumbai. In addition to announcing its design partner community programme, Livspace introduced its home design automation platform for interior designers in 2016. Later on, the business built four offline design stores in Bengaluru, Delhi, Mumbai, and Gurugram, each equipped with a virtual reality setup.
- Zepto
Zepto claims to be the fastest grocery delivery service available in India, with delivery speeds of less than ten minutes. Following a preliminary period that lasted from June 2020 to March 2021, the app was introduced in April 2021 by Zepto’s masterminds, Aadit Palicha and Kaivalya Vohra.
Zepto offers doorstep delivery of over 3,000 essential and non-essential items, ranging from fresh fruit to health products. Zepto’s user base increased by an astounding 946% between December 2021 and March 2022, surpassing the growth rates of rivals Blinkit, BigBasket, and Dunzo, which were 18%, 58%, and 94%, respectively, according to Bobble AI Data Intelligence Division.
It became the first unicorn startup in India in 2023 when it raised $200 million in Series E funding, backed by StepStone Group. This allowed Zepto to increase its valuation to $1.4 billion.
Several other unicorns in the year 2023 like Molbio Diagnostics, PhysicsWallah, XpressBees Logistics, Fractal, BlinKit, BharatPe, Droom, OneCard. and many others were some of the startups which expanded from low-budget businesses to giant global platforms, overcoming the money barrier.
What’s The Way Forward For Indian MSMEs?
Indian MSMEs account for 37.5 % of GDP, employing about 111 million. The Union Budget 2023-2024 looked promising for MSMEs with comprehensive schemes like the Emergency Credit Line Guarantee Scheme(ECLGS), the launch of the Udyam Assist Platform(UAP) for Informal Micro Enterprise(IMEs), etc.
While the governmental policies and schemes are aimed towards the development of low-budget businesses in India, innovation in the logistics and shipping sector in India is also one of the reasons why transportation and connectivity are at their peak. Leading logistics companies in India like NimbusPost are the best examples of tech-enabled shipping service providers all over the country and the globe.
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