Indian Tech Start Up Ecosystem 2019 Report PDF

Indian Tech
Start-up Ecosystem
- Leading Tech in the 20s
EDITION 2019
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About the Authors
The National Association of Software and Services Companies (NASSCOM®) is the premier trade body and chamber of commerce
of the Tech industry in India and comprises over 2800-member companies including both Indian and multinational organisations
that have a presence in India. Our membership spans across the entire spectrum of the industry from start-ups to multinationals
and from products to services, Global Service Centers to Engineering firms. Guided by India’s vision to become a leading digital
economy globally, NASSCOM focuses on accelerating the pace of transformation of the industry to emerge as the preferred
enablers for global digital transformation. Our strategic imperatives are to reskill and upskill India’s IT workforce to ensure that
talent is future-ready in terms of new-age skills, strengthen the innovation quotient across industry verticals, create new market
opportunities - both international and domestic, drive policy advocacy to advance innovation and ease of doing business, and build
the Industry narrative with focus on Talent, Trust and Innovation. And, in everything we do, we will continue to champion the need
for diversity and equal opportunity. NASSCOM has played a key role in not just the growth of the Industry to become a $180+Billion
industry today, but we have helped establish the Tech industry in India as one of the most trusted partners, globally. NASSCOM
continues to make significant efforts in contributing towards India’s GDP, exports, employment, infrastructure development and
global visibility. Our membership base constitutes over 95% of the industry revenues in India and employs over 4 million
professionals, and as technology blends into every aspect of the economy, we expect the industry to become key driver of growth,
development and inclusion for the country. Our mission is to make India a global hub for Innovation and Talent so when the world
thinks Digital, the world will think India.
Founded in 2002, Zinnov is a leading global management and strategy consulting firm, with core expertise in Product Engineering,
Digital Transformation, Innovation, and Outsourcing Advisory. Over the past 17 years, Zinnov has successfully consulted with over
250+ Fortune 500 customers to develop actionable insights that help them in their transformation journeys. Zinnov is committed to
empowering leading technology companies drive meaningful business outcomes, leveraging a combination of consulting and
platforms to deliver value.
Foreword
The year 2019 has been phenomenal for India and its vibrant start-up ecosystem. While the Indian start-up
ecosystem continues to be the third largest in the world, it saw 7 new additions to its incessantly flourishing Unicorn
club. There are multiple levers propelling this remarkable growth of the ecosystem that are bolstering the Indian
start-ups as well as creating an environment conducive for continued innovation.
What stands out most starkly in this report is how various elements of the ecosystem are coming together in
symphony to give rise to an orchestra of innovation – right from Government support (State and Central), evolution of
Debjani Ghosh
President, NASSCOM the investor landscape, increase in participation from the corporates, growth of national digital infrastructure, to
incredible global exposure. These factors are together fuelling the ecosystem, so much so that the cumulative
valuation of the start-ups has now crossed a massive $55Bn.
Start-ups are exploring newer sectors, leveraging deep-tech and tapping unexplored talent pools. The increasing
confidence of the entrepreneurs is also being enabled by various initiatives that the government, the corporates, and
the investors are taking. This report is a testament to this rapidly advancing ecosystem, as it dives deep into the ten
trends that are pushing the envelope. It also highlights some proactive measures that can help de-risk the growth and
accelerate the ecosystem further.
We hope that the insights from this report prove useful to you, and we welcome your feedback and comments
Pari Natarajan
at research@nasscom.in
CEO, Zinnov
Table of Contents
EXECUTIVE SUMMARY 6
OVERVIEW 10
KEY TRENDS 21
OUTLOOK 2025 92
RECOMMENDATIONS 94
NOTE FOR READER 99

Executive
Summary
Snapshot of Indian start-up ecosystem
8900-9300 # of Start-ups1 incepted during 2014-19, overall base growing at 12-15% y-o-y
1300+ # of Start-ups added2 in 2019; steady and sustained growth in new Start-ups
7 # of Unicorns3 added in 2019; total 24 unicorns are active in India
$ 4.4 Bn Total funding received by Start-ups1 in 2019 (Jan-Sep)
18% Share of all start-ups leveraging deep-tech4; 40% CAGR since 2014
390+ Active institutional investors5; up from 310+ in 2018
335+ Active incubators and accelerators; up from 320+ in 2018
60,000 New Direct Jobs6 created; 1.3-1.8 Lakh New Indirect Jobs6 created
Note: (1) Please refer start-up definition. This report only covers start-ups founded in 2014-19 (2) No. includes start-ups already incepted and expected growth till Dec-2019
(3) Figure as on 31-Aug-19, unicorn is a start-up with >$1Bn valuation (4) Deep-tech includes AI/ML, AR/VR, IoT, Blockchain, Cryptology, Robotics, 3D Printing, Big Data & 7
Analytics (5) Have invest at least once in 2019 (6) No. of estimated basis analysis of 1000 funded start-ups across funding stages.
10 key trends bolstering the Indian start-up ecosystem
Growth of new start-up hubs Built in India. Branded Global
• 27% of all start-ups are based in emerging and nascent start-up hubs • 21% of Indian start-ups are focused on market overseas
• 15% of all funded start-ups are based in emerging and nascent start-up hubs • 14% increase in global start-ups building products from India
Increasing depth and breadth in sectors Strengthening pipeline of potential unicorns

• Start-ups are active in 20+ sectors including likes of energy, agritech, automotive
• 50+ start-ups have > $50Mn in cumulative funding
etc
• 3X growth in the number of start-ups in 2019
• 57% of unicorns added in 2019 where from nascent and emerging sectors.
Diffusion of deep-tech 2nd Innings
• 18% of all start-ups are now leveraging deep-tech; up from 8% in 2014 • 55+ start-up founders (min. 3 investments) are actively investing in India
• Deep-tech club is growing at 40% CAGR since 2014 • 150+ start-ups founded by serial entrepreneurs
Building on India’s unique digital infrastructure Evolving Investor Landscape
• India Stack has significantly expanded the total addressable market in India • 390+ active institutional investors; up from 310+ in 2018
• Start-ups are leveraging stack to build innovative solutions and growing quickly • 1.5X increase in private equity investors from 2018
Serving the underserved Intensifying corporate participation
• 31% of start-ups are serving small and medium businesses; up from 25% in 2014 • 140+ unique corporates active1 in 2019; up 12-15% from 2018
• 47% of start-ups are serving low and middle income group; up from 43% in 2014 • 50+ unique corporates have active open innovation program; up 12-15% from 2018
8
With proactive action Indian start-up ecosystem can realize its 4X
growth potential by 2025
20191 Recommendations 20252
To enable revenue generation
• Provide institution support to tap into global markets

# of Unicorns5 24 • Ease norms and process for public procurement from
start-ups
To increase corporate participation
Cumulative Valuation3 $ 95-101 Bn • Expand CSR guidelines to increase capital availability

and pace of deployment
• Encourage setting-up for corporate innovation labs
4X
To increase seed-stage investments
# of Direct Jobs3 390-430k • Create seed stage co-investment fund for angel
investors
• Bring focus on capability over capacity in accelerators
and incubators
To strengthen support ecosystem

# of Indirect Jobs4 1400-1600k
• Build industry-specific world-class innovation clusters
• Build industry specific physical and digital sandboxes
Note: (1) Analysis of companies founded between 2009-19. Estimated numbers as on Dec 2014. Includes Flipkart in Unicorns. (2) Analysis of companies founded between
2009-25 (3) Calculated based on analysis of all funded and 500 unfunded start-ups. Valuation Est. is based on data model (4) Calculated based on DPIIT model with adjustment 9
for outliers witnessing strong growth (5) For Unicorns, start-ups founded in or after 2000 are considered.
The Indian start-up
ecosystem
continues to
expand
Indian start-up ecosystem continues to be the 3rd largest in the
world
China2 USA2 India U. K1 Germany1 Israel2
Number of Unicorns3 206 203 24 21 11 7
Avg. Time to Unicorn 4-6 6-8 6-8 7-9 6-8 5-7

(Years)
Avg. Valuation per ~3.8 ~3.5 ~3.2 ~2.4 ~2.0 ~1.3

Unicorn ($ Bn)
Innovation Clusters
18 24 5 4 4 4
with min. 1 Unicorn4
Notes (1) CBInsights – the complete list of unicorns (2) Hurun Global Unicorn List 2019 (3) Data as on Oct 2019 (4) Cities have been bundled into clusters. For example, Silicon
Valley includes Palo Alto, Menlo Park, San Jose, Mountain View, Santa Clara, Cupertino, Campbell, Los Altos, Los Gatos, Milpitas, San Mateo, Saratoga, Sunnyvale. Similarly, 11
Delhi-NCR includes Delhi, Noida and Gurgaon.
2019 was another remarkable year for the growth of Unicorns in India
Unicorns added in 2019

Overall In 2019
24 Unicorns 07 Location: Pune

Total Funding: $330 Mn
Cloud-based contract
management platform
Location: Pune
Backup & data loss prevention
solution for enterprises
44% % share of B2B 71% Location: Bangalore
Developer electric mobility
services & charging infrastructure
Location: Mumbai
Online platform for playing real
time fantasy cricket and football
07 Cities 05
Location: Delhi
Logistics services for Indian e-
commerce companies
Location: Bangalore
% of start-ups Online retailer of grocery products
44% with overseas 28%
Location: Gurgaon
market Total Funding: $238 Mn
Tech-enabled logistics with a
truck fleet of its own
Source: Zinnov CoNXT Research and Analysis 12

Overall, the Indian start-up ecosystem is growing steadily
1300+ Number of start-ups added in 20191

2014-2019 8900-9300 12-15%
Start-ups Growth
43% Share of B2B start-ups
7700-8200 12-15%
2013-2018
Start-ups Growth
20+ Number of industrial verticals with active start-ups
21% Share of start-ups with primary market overseas

6600-7100 9-12%
2012-2017
Start-ups Growth
2000+ Number of funded start-ups founded between 2014-19
2012 2013 2014 2015 2016 2017 2018 2019
Year of Inception 5 Number of Unicorns founded in 2014 or later
Note: (1) Addition in 2019 is estimated basis historical data and number of start-ups founded between Jan to Aug 2019 13
Cumulative valuation of the start-ups has now crossed $55Bn
Illustrative Start-ups
Share of Unicorns founded in

21% 2014-19
Share of start-ups at Series

24% C+ funding stage (excluding
Unicorns)
$56-62Bn
Cumulative valuation
of start-ups1
Share of start-ups at Series A
40% and/or Series B funding stage
Share of angel or seed

12% funding stage start-ups
Note: (1) Analysis of start-ups founded between 2014-19, Exits and acquired start-ups not included Illustrative / Not Exhaustive 14
Entrepreneurs are leveraging opportunities across sectors and
markets
High Growth (CAGR >50%, since 2014)
sector-wise split of start-ups
EdTech Fintech Mobility
Enterprise
Healthtech
13%
FinTech 19% Automotive Healthtech
HRTech 2%
Edtech 3%
Medium Growth (CAGR >35%, since 2014)
3%
Retail & Retail Tech
3%
Travel and Hospitality
SCM &
SCM & Logistics 4% 8900-9200 Human
Resources Logistics
Start-ups 14%
Real Estate and Construction
4%
Automotive Real Estate & Food &
Construction Foodtech
Industrial & Manufacturing 4%
Food & Foodtech 4%
Mobility 10% Retail & Enterprise
5% Retail tech
AgriTech 6% 6%
Others Travel &
Industrial &
Manufacturing Hospitality
Note: Only sectors with 200+ active stat-ups have been considered
Note: Others Include Media and Entertainment, Advertising and Marketing, Energy and Utilities, Gaming, Legal tech, Aerospace and Defense etc. Analysis of start-ups founded
15
between 2014-19; Please refer appendix for sector definitions.
Fintech, enterprise, and retail tech are the most mature sectors with
strong metrics across dimensions
High
= f (Total investment / Total Start-up, Funding spread across stages)
Mature Sectors
SCM & Logistics Fintech
Mobility
Healthtech Sectors with a large unfunded and
Enterprise funded start-up base with high adoption
Real estate
of deep-tech and investor activity.
Investment Index
& construction
Retail & Retail tech Emerging Sectors

Travel & Hospitality
Sectors with a medium unfunded and

Human Resources Edtech funded start-up base with relatively low-
Media & to-high adoption of deep-tech and
Energy & Utilities Entertainment medium-to-high investor activity.
Agritech Nascent Sectors
Industrial & Sectors with a small start-up base with

Manufacturing and hence relatively lower investor
activity.
Low Aerospace &
Defence
Low Maturity Index High

= f (No. of start-ups, % of funded, No. of Unicorns, Adoption of deep-tech)
Note: Model measures and plots maturity of a sector relative to all other sectors in terms of start-up and investor activity. Please refer appendix for definitions. 16
18% of all start-ups are now leveraging deep-tech
5 year CAGR
Key Application Areas
% share of start-ups by technology (Number of Start-ups)
Artificial Intelligence 65 – 67%

13% Enterprise FinTech HealthTech
AI/ML 27%
4%
IoT Internet of Things 45 – 46%
5% Industrial Real Estate HealthTech
Big Data & Analytics
Blockchain 1600+
7% deep-tech Big Data & Analytics 38 – 40%
AR/VR Retail &
Start-ups Enterprise FinTech
Retail Tech
Drones
Others
Blockchain 88 – 90%
23%
21% FinTech Enterprise Agritech
AR/VR 55 – 60%
Retail &
Note: total will not be equal to 100 EdTech Real Estate
Retail Tech
• Deep-tech start-up pool has grown at 40% CAGR since 2014

• Pool has expanded from 16% of the total start-up base in 2018; and is up from 8% in the year 2014
• Blockchain, 3D printing, robotics, and drone start-ups continue to expand rapidly- albeit on a smaller base
Others include Robotics, 3D Printing, Virtualization, Cybersecurity etc. 17

Indian start-ups had an active 2019 with increase in overseas and
domestic acquisitions
Global Acquisitions by Indian companies
Qianyu Islands
M&A Deals Acquirer Category Reason for Acquisition

in 2019 (Jan-Aug)
41% Building Tech Capabilities

50% Indian or Global Start-up
Expand capabilities across organization
23% Product Portfolio Expansion

70+ 40+ 25% Global Corporate
Strengthening of their position and expansion of product
portfolio
18% Market Expansion

24% Indian Corporate
Expansion into new markets, enhancing business model
Start-ups that were founded etc.
between 2009-19
Start-ups that were founded 1% Private Equity 17% Acqui-hire
between 2014-19
Buying out a company primarily for the skills and
expertise of its staff
Source: Crunchbase, Zinnov CoNXT Research and Analysis Illustrative / Not Exhaustive 18
Investment environment for start-ups continues to be positive overall
Total and Stage-wise Investment in $ Million

$4,281
$3,677
• Total investment in start-up ecosystem has increased by 16% year-
1 on-year in 2019 (Jan to Aug)

2018 (Jan to Aug)
2
2019 (Jan to Aug) • Distribution of funding was better compared to 2018 (Jan to Aug)
with early stage start-ups increasing their share
$2,451 $2,450
• Only, seed stage investments have seen a drop in terms of share and
absolute terms
$1,625
• In 2019 share of unicorns1,2, in total funding, was only 21% against
48% in the previous year – reflecting the Indian ecosystem’s depth
$966
$260 $206
Seed Early Late Total
Note: (1) Funding Analysis is done for start-ups founded between 2013-18; (2) Funding Analysis is done for start-ups founded between 2014-19 19
10 key trends are
enabling the
ecosystem’s
growth
Key trends enabling the Indian start-up ecosystem’s growth
Built in India. Branded Global 6 1 Growth of new start-up hubs
Strengthening pipeline of Increasing depth and breadth

7 2
potential unicorns of sectors
2nd Innings 8 3 Diffusion of deep-tech
Building on India’s unique

Evolving investor landscape 9 4 digital infrastructure
Intensifying corporate
10 5 Serving the underserved
participation
21
While most of the reports consistently focus on
Growth of established start-up hubs – we have witnessed a
marked increase in start-up activities across
new start-up India’s emerging and nascent start-up hubs.
hubs There is a steady rise in total number of start-ups

and total funding received across these hubs.
These cities boast of well-funded companies like
LendingKart, CarDekho, CareStack and
SurveySparrow.
With strengthening policy support, expansion of

institution support, creation of local communities,
and sustainable cost advantages - we can expect
more success stories, including unicorns, from
# 01 across the country.
Bangalore, Delhi-NCR, and Mumbai are home to 55-58% start-ups
Share of start-ups by Illustrative Examples

location
23-24%
Bangalore
20-21%
Delhi-NCR
12-13%
Mumbai
42-45% Others
Note: Emerging start-up hubs are start-up hubs with more than 20 funded start-ups, Nascent start-up hubs are start-up hubs with less than 20 funded start-ups 23
However, ecosystem expansion is driven by rapid growth of other
start-up hubs
CAGR in Number of
Established Start-up Hubs2 51% start-ups since 2014
Chandigarh
Hyderabad Pune Chennai
Jaipur
Kanpur
CAGR in Number of
Emerging Start-up Hubs 55% start-ups since 2014
Ahmedabad Kolkata
Ahmedabad Jaipur Kolkata Kochi

Pune
Hyderabad
Established Start-up Hubs
CAGR in Number of
Nascent Start-up Hubs 45% start-ups since 2014 Chennai
Emerging Start-up Hubs
Coimbatore
Kochi
Nascent Start-up Hubs
Thiruvananthapuram
Thiruvananthapuram Kanpur Chandigarh Coimbatore
Note: Emerging start-up hubs are start-up hubs with more than 20 funded start-ups, Nascent start-up hubs are start-up hubs with less than 20 funded start-ups (2) Bangalore,
24
Delhi-NCR and Mumbai are also established start-up hubs.
Emerging start-up hubs are growing steadily
Funded Start-ups
Jaipur
Ahmedabad Kolkata
Ahmedabad Jaipur Kolkata Kochi
% share of funded start-ups

based in Emerging hubs
43% 25% 17% 15%
• 150+ funded start-ups in emerging start-up hubs

• While a majority start-ups are in seed and early stage we have outliers like
Kochi
LendingKart and CarDekho, which can be considered as potential unicorns
Note: Emerging start-up hubs are start-up hubs with more than 20 funded start-ups Illustrative / Not Exhaustive 25
Early indicators from nascent start-up hubs are positive
Funded Start-ups
Chandigarh
Kanpur
Thiruvananthapuram Chandigarh Kanpur Coimbatore
% share of funded start-ups

based in Nascent hubs
33% 23% 23% 21%
• 40+ Funded start-ups in Nascent Start-up hubs

Coimbatore • Founders are leveraging cost arbitrage and support from academic and/or Govt.
initiatives to build solutions both for domestic and overseas market
• A key driver is access to talent from technical institutions in the region
Thiruvananthapuram
Note: Nascent start-up hubs are start-up hubs with less than 20 funded start-ups Illustrative / Not Exhaustive 26
Proactive actions from local communities, academia and state
government are driving growth of new start-up hubs
Kerala Ahmedabad
Ecosystem Enablers:
Ecosystem Enablers:
• Centre for Innovation Incubation and Entrepreneurship (CIIE) - Start-up Incubator
• India’s first space tech park to be set-up in Thiruvananthapuram
• iCreate Entrepreneurial Litmus Test (iELT) – Start-up Accelerator
• BRINC – Country’s first international accelerator for hardware start-ups, Kochi
• Centre for Advancing and Launching Enterprise – Technology Business Incubator
• Maker Village - India’s largest hardware incubator & ESDM facility, Kochi
• Venture Studio – Start-up incubator set-up by Ahmedabad University in collaboration
• Fab lab – Fabrication Laboratory, Thiruvananthapuram
with Stanford University
Jaipur Chandigarh
Ecosystem Enablers:
Ecosystem Enablers:
• TIE Chandigarh – Supports start-ups through mentoring, networking, funding and
• Amity Innovation Incubator - Jaipur’s academic not-for-profit incubator
incubation
• Bhamashah Technohub – India’s largest business incubator
• BIGShift Chandigarh – Platform for start-up showcase
• Assocham Launchpad - Elevator Pitch Series
• Chitkara Innovation Incubator – Academic Start-up Incubation centre
• Start-up Oasis – Jaipur based Incubation Centre
• Chandigarh Angels Network – Angel Network providing mentorship and funding
Sources: KSUM, startupgujarat.in, istart.rajasthan.gov.in, chandigarh.tie.org, saccindia.org, TOI articles, yourstory articles Illustrative / Not Exhaustive 27
Strong policy support, expanding talent base, and proximity to
untapped markets are some of the key drivers
Strong policy support
Since 2014, there has been a remarkable increase in the quality and the extent of support provided by the State
Government. State specific start-up policies have enabled expansion of infrastructure, coworking spaces, incubators, and
accelerators – and in certain cases access to funding and market access.
Expanding talent base with better exposure
India’s talent base is expanding beyond large cities as fresh graduates are choosing to stay back in non-metropolitan
cities. These individuals have an almost similar exposure to technologies via the Internet. This enables the founders to
recruit quality talent at a relatively lesser cost – allowing better runway and also a base for growth.
Proximity to markets
Start-ups have almost similar access to global markets like their peers in established hubs. Additionally, their proximity to
digital populous outside large cities allows them to understand and solve for relatively untapped it’s use-cases. For
example, Agritech start-ups in smaller cities have a distinct advantage in understanding pain points of the relevant
masses.
Source: startupindia.gov.in, doingbusiness.org, 28

Diversity in industry sectors and use-cases is
Increasing reflective of an ecosystem’s strength. We continue
to witness an expansion in industries targeted by
depth and Indian start-ups and also a marked improvement in
the quality of use-cases being solved for.
breadth in
sectors There is increased activity in Edtech, Retail &
Retail tech, HR, and Healthtech technology start-
ups while significant improvement in sectors like
Agritech, aerospace, defence and space.
With active institutional participation, expanding

community base, and constant policy support we
can expect this trend to continually strengthen the
# 02 Indian start-up ecosystem.
The Indian ecosystem has a healthy mix of sectors at varying maturity
levels
High Mature Sectors

= f (Total investment / Total Start-up, Funding spread across stages)
Mature Sectors Fintech
• Fintech Key Drivers: Financial Inclusion,

• Healthtech Lending, Wealth Management, Banking
• Enterprise and Insurance Tech
• Retail & Retail
tech
Investment Index
Healthtech
Emerging
Sectors
Key Drivers: Addressing awareness,
• Edtech
• SCM & Logistics
affordability and accessibility
• Mobility
• Travel & Hospitality
• … Enterprise
Nascent Sectors
Key Drivers: Horizontal and vertical
• Industrial & solutions for large, medium and small
Manufacturing business – locally and globally
• Gaming
• Agritech
• Media & Entertainment Retail & Retail tech
• …
Key Drivers: New business models,
Low improving connectivity, ubiquity of UPI -
continue to propel the sector
Low Maturity Index High

= f (No. of start-ups, % of funded, No. of Unicorns, Adoption of deep-tech)
Note: This is an oversimplified illustration of the Maturity vs Investment Index Illustrative / Not Exhaustive 30
In mature sectors like fintech and enterprise, start-ups are focusing
on newer use-cases
Enterprise Fintech
Number of 1600+ Number of 250+ Number of 830+ Number of 230+

Active Start- Funded Start- Active Start- Funded Start-
ups ups ups ups
Data Access
Network Security Reward Based Payment Alternative Lending
Management Cross
Business Popular
Border
Intelligence Use-cases
IT Infrastructure Automated Payments Cross Platform
Insurance Comparison
Management Subscription Billing Payment Gateway
Encrypted Data Credit Score

Cloud Optimization Invoice Reconcillation
Transmission / Storage Emerging Management
Use-cases Internet first
Voice Bots
banks
Business Process AI-based wealth
DevOps Fraud prevention
Automation Management
Cognitive RPA Integrable payment Digital ledger account

Cloud hosting & Data
software for gateway solutions for book for small
Center solutions
enterprises organizations businesses
Illustrative Start-
Enterprise data ups Online platform that
operations and Solution for facility provides working QR code-based
orchestration management capital for SMBs in payment app
software. India
Note: Analysis of start-ups founded between 2014-19 Illustrative / Not Exhaustive 31

In Healthtech and retail tech as well, variety of use-cases are
increasing
Healthtech Retail & Retail tech
Number of 1050+ Number of 220+ Number of 440+ Number of 170+

Active Start- Funded Start- Active Start- Funded Start-
ups ups ups ups
Online Pharmacy In-Home Healthtech B2C Marketplaces Coupons & Rewards

Tech-driven
Popular Social
medical
Use-cases Commerce
diagnosis
Telemedicine Discovery and booking B2B Marketplaces Discounting Tools
Smart Tools for

Continuous Care Cashless checkout Experiential Commerce
E-Prescription Emerging Fresh
AI-enabled Use-cases produce
diagnostics
monitoring
Low cost devices Assistive surgery JIT Inventory Fraud detection
hyperlocal platform for AI-based decision Social product AI-based visual search
medicine ordering and support tool for discovery and and recommendation
diagnostic tests diagnostic images commerce platform solution for fashion
Illustrative Start-
ups
Enterprise data Smart clinics for post- Online assisted Online live streaming
operations and consultation care to purchase platform e-commerce platform
orchestration software. the patients catering to rural for multi-category
customers products

Strong investor-interest is supporting the growth of emerging
sectors
Number of
Growth Popular
Funded Illustrative Start-ups
(since 2014) Use-cases
Start-ups
Warehouse Equipment and Goods On-demand B2B focused

Management Tracking
delivery service
SCM & Logistics 70+ MEDIUM Equipment and Goods
Tracking
Route Optimisation
Logistics management software
Hyperlocal Delivery Demand Forecasting for SCM Optimisation
Tech-enabled
Test Preparation classroom Online learning platform with
live course content and videos
Edtech 120+ HIGH Tutor Discovery
Digital and vernacular
content
AR based learning for children
Doubt Clearance Gamification and
tracking
Battery Tech Vehicle – as–a-service Affordable intra-city commute

with Bike-taxis
Mobility 30+ HIGH Fleet Management ADAS
App-based ride pooling
Safety and Security V2X Connectivity platform for office commute

We are also witnessing the emergence of start-ups in nascent
sectors
Number of
CAGR Popular
Funded Illustrative Start-ups
(since 2014) Use-cases
Start-ups
Precision Agritech Land surveillance Farm data analytics using

satellites, drones and sensors
Poultry and Cattle
Agritech 20+ MEDIUM Farm Implements
Management
IoT based precision farming
Soil and crop Cold chain and supply platform
monitoring chain management
Fantasy League Development Platform eSports online Gaming

platform with real cash prizes
Gaming 30+ MEDIUM Customer Analytics Game monetisation
Game development platform
AR/VR for casino-based games
Predictive Maintenance Quality Control Digital twin solution for

manufacturing processes
Industrial &
Manufacturing 45+ MEDIUM Process Optimisation Connected Factory
Robotic vision intelligence

Plant Safety & Security solution for industrial robots
Content moderation &

Content Tagging Media content extraction
translation
engine powered by AI
Media & Entertainment 80+ MEDIUM Contextual Advertising OTT
Machine-enabled content
Customer Analytics Immersive Tech translation platform

We anticipate emerging and growing sectors to steadily mature, and a
continued diversification in sectors
Improving institutional support
Access to large datasets and improved lab facilities with sector specific capabilities allows entrepreneurs to reduce time-
to-market. A good example would be innovation facilities being set-up by ISRO across the country.
Increasing corporate participation
Revenue opportunities through increasing corporate collaboration programs improves odds of success and attracts more
entrepreneurs to the sector. For example, there is an increase in participation in aerospace and automotive.
Sector specific policies and initiatives
Policy focus, e.g. electric vehicles, and Government’s commitment to increase procurement from MSME, e.g. smart
governance and defence sector, is steadily opening opportunities/markets for start-ups.
High global exposure
With average founder age at 32 years – experienced founders are entering the ecosystem consistently. Exposure from
prior work experience with domain expertise allows them to focus on deeper problems.
35
With 18% of base being deep-tech start-ups,
Diffusion of applications have permeated across all industrial
sectors. Further, convergence of technologies is
deep-tech enabling start-ups to solve for more use-cases.
With increasing global competition, adoption of

deep-tech is essential in many industries. The
increasing adoption is also reflective of the
improving technology skills in the Indian start-up
ecosystem..
With increasing focus and support from

policymakers, the expanding base of talent with
niche skills, and improving exposure to application
and technologies – we expect this diffusion of
# 03 deep-tech to enable a globally recognized

innovation ecosystem in India..
Deep-tech adoption is pervasive across sectors
Shift in deep-tech1 adoption across sectors, by year
Industry Vertical 2014 2017 2019
Enterprise • Start-ups in Enterprise, Healthcare,
Healthtech Fintech, Industrial and Manufacturing

sectors have been the quickest to adopt
Fintech
deep-tech.
Industrial & Manufacturing
• Sectors like Edtech, SCM & Logistics,
Edtech
AgriTech have seen a shift in deep-tech
Real Estate & Construction
adoption to solve problems for the
Human Resources
masses.
Automotive
Retail & Retail tech
Travel & Hospitality

Legend – deep-tech adoption
SCM & Logistics
intensity as percentage of base
Mobility
Agritech
Food and Foodtech
Note: (1) Deep-tech includes AI/ML, AR/VR, IoT, Blockchain, Cryptology, Robotics, 3D Printing, Big Data & Analytics 37
AI/ML is being deployed heavily in enterprise, fintech, and Healthtech
Retail & Retail

Enterprise Fintech Healthtech Agritech
tech
% of Start-ups
leveraging AI 29% 9.3% 8.2% 6.8% 2.7%
RPA AI PaaS Monitoring Soil and

Robo Advisors Consultations SCM
Crops
Risk & Threat Detection
Credit Scoring Surgical Robots In-Store Experience Agro Bots
SC
Personalization
Use-Cases M
Portfolio Management Diagnosis Product Creation Supply Chain
Recommendation
Engines Fraud Detection Hospital Management Personalization Automated Irrigation
Predictive Analytics Risk Management Assistive Surgery Quality Inspection Weather Tracking
% Share of
Funding under AI 20% 21% 30% 11% 2%
YOI-2017 YOI-2016 YOI-2016

YOI-2017 YOI-2018
Total Funding-$2.5M Total Funding-$10.6M Total Funding-$14M
Total Funding-$120K Total Funding-$120K
Description- Customer Description-Expense Description- Early stage
Illustrative interaction analytics solution management software Description-AI-based Description- AI+IoT platform
breast cancer screening for precision Agritech
Start-ups for businesses. device
customer review analytics
YOI-2016 YOI-2016 YOI-2016

YOI-2014 YOI-2017 Total Funding-$120K
Total Funding-$2M Total Funding-$620K Total Funding-$2.6M
Total Funding-$474K Description-Virtual assistant
Description-Powerful DIY tools and Description-Personal stylist Description-AI for Digitizing
Description- Debt collection for patient engagement &
customized solutions for organization tool for online retailers Food Quality
automation system task automation in hospitals
Note: Analysis of start-ups founded between 2014-19, (1) Only funding 2019 (Jan-Aug) has been considered Illustrative / Not Exhaustive 38
Start-ups are leveraging IoT to solve use case primarily in
manufacturing, healthtech, and real estate
Industrial and
Real Estate Healthtech Enterprise
Manufacturing
% Share of start-
ups under IoT 24% 19% 11% 9%
Asset Smart Devices for Fitness/Health Tracker

Tracking/Monitoring Cloud Analytics
Individual Homes Device
Predictive Maintenance Smart Waste/Water Remote Health End to End/M2M
Management Monitoring Platform
Use-Cases Process Optimization Enhance Drug
Sensor Enabled Management Device Management
Shop Floor & WIP Infrastructure Hospital Inventory
Intelligence Management Management
IoT Infra for Edge/Fog
Process Optimization Predictive Traffic Flow Outpatient Services Computing
% Share of
funding1 under IoT
12% 8% 32% 12%
YOI-2015 YOI-2015 YOI-2015 YOI-2018

Total Funding-$6.1M Total Funding-$10M Total Funding-$6.1M Total Funding-$34.6K
Description-Big data and Description- Provides Smart Description-Smart Tools for Description- Builds controllers
predictive analytics platform for urban infrastructure automation prescriptions and physician order to manage & control edge and
Illustrative
manufacturing entry fog computing
Start-ups
YOI-2015
YOI-2015 YOI-2014 YOI-2014
Total Funding-$805K
Total Funding-$3.6M Total Funding-$908K Total Funding-$252K
Description- IoT solutions and
Description-Ready-to-deploy, Description-IoT based solution Description-Wearable patch for
services for smart cities and
intelligent, wireless sensors for home automation real time monitoring body vitals
other industrial clients
Note: Analysis of start-ups founded between 2014-19, (1) Only funding 2019 (Jan-Aug) has been considered Illustrative / Not Exhaustive 39
There has been a significant increase in the number of blockchain
start-ups
Key Use-cases
Trade Finance Inter Bank Payment Supply Chain Traceability
Shipping Documentation KYC Secure Record Keeping
110+ Number of Blockchain start-ups in India

Claims Management Customer Data Sharing Quality Control and Audit
90% CAGR since 2014, albeit on low base Digital Identity Pharma track and trace 3D Design Records
Number of sectors where blockchain is being Illustrative Start-ups

8+
leveraged
75% of start-ups are in Fintech segment

Digital contract drafting Blockchain software
and signing platform Blockchain-based
platform for managing
running on cloud recruitment platform
the agricultural supply.
Blockchain-based
Financial ecosystem for Indian cryptocurrency
operating system for
the underbanked trading platform
business ecosystems

AR/VR and drone start-ups are also gaining traction
AR/VR Drones
26% CAGR since 2014 80+ Number of start-ups 17.8% CAGR since 2014 60+ Number of Start-ups
Key Industries Served Key Industries served
Edtech Retail & Media and Real Estate Healthtech

Agritech Space and Aerospace Energy and
Retail tech Entertainment
Defence and Maritime Utilities
Key Use-cases Key Use-cases
Experiential Augmented Health Analytics for Topological Survey

In-Store Navigation Intrusion Detection
Learning Catalogues Crops and Inspection
Operation Nano/Micro
Interior Designing Motion Simulation 360° Virtual Tour Aerial Mapping
Optimization Satellites
Illustrative Start-ups Illustrative Start-ups

Pool of start-ups in robotics, 3D printing and cryptology is slowly
expanding
Number of Start-
Technology Key Industries Served Illustrative Examples
ups
Cryptology 10+
Enterprise Fintech
Industrial &
Manufacturin Healthtech FinTech
Robotics 30+ g
Consumer
Automotive Defence
Robotics
Healthtech Aerospace Industrial &

3D Printing 80+ Manufacturin
g
Electronics Real Estate Edtech

Convergence of deep-technologies is giving rise to new use-cases
and solutions
Blockchain + AI, +
AI + IoT IoT
Key Use-Cases Key Use-Cases
• Quick insights from data

• Avoid unplanned downtime
AI • Patient care and diagnostics
• Automated trading and investments
• Increasing operating efficiency, and Blockchain
• Air traffic control
enhancing risk management
• Improved data protection and data sharing
• Personal Smart Assistants
AR/VR
IoT
Drones
AI + 3D Printing
3D
Printing AI + IoT + Drones
Key Use-Cases
Key Use-Cases
• Real time detection of defects in 3D printing • Precision Agritech

of medical devices, aircraft components • Surveillance in smart cities, military, and defence
• Train machines for modelling objects • Aerial mapping of real estate
• Capturing live events from wide angles

Deep-tech start-ups also hold key to efficiently solving India’s
pressing challenges, at scale
Healthtech Agritech Air and Water
Adiuvo Diagnostics – Portable Raav TechLabs – AI powered food Blue Sky Analytics – AI powered
diagnostic device to rapidly detect quality analysers for agricultural geospatial data intelligent platform
skin infections in rural locations and dairy products with an aim to give actionable insights on
with minimal infrastructure. tohelps reduce wastage. various environmental parameters.
Yostra Labs - Developer of Intello Labs - Image recognition- Aqua Waterless systems - IoT
medical devices for affordable based solutions to address deep solutions that enable smart water
diabetes and intravenous therapy and grave agricultural issues. management systems.
Sanitation Edtech Energy
Genrobotics – Developed Guvi - Developer of hyperlocal Flip Robotics - Autonomous

Bandicoot, a sewage cleaning bot mentoring platform for providing robotic solution for cleaning Solar
with a mission to end manual online programming in vernacular PV panels with waterless
scavenging. language technology.
Blackboard Radio – AI powered Orxa Grid – IoT-enabled energy

Garv Toilets –Portable Bio Toilets
personalized English coach for monitoring devices to reduce
equipped with RFID-IoT sensors for
school going students in Tier 2 and electric grid loses and increase
public sanitation applications
Tier 3 cities efficiency
Source: Zinnov CoNXT Research and Analysis Illustrative / Not Exhaustive 44

Improving talent skillsets combined with policy measures is expected
to support rapid adoption of deep-tech
Improving talent skillset
Programs like NASSCOM Future Skills, Government of India’s Skill India, and multiple corporate initiatives, e.g. Intel,
Google and Microsoft have committed to skilling more than 200,000 engineers through different mechanisms. This will
provide the talent base required to take-on the market challenges and opportunities.
Improving exposure with increasing corporate R&D Centres
R&D centres of global MNCs in India are increasingly taking on cutting-edge mandates from headquarters, e.g. Google,
Ericsson, and Microsoft set-up their global AI research centres in India in 2019. This coupled with an inclination and
openness to leverage start-up ecosystems provides the much needed opportunities and exposure to both entrepreneurs
and their teams; and simultaneously expands pool of potential experience entrepreneurs.
Focused support from policymakers
With whitepapers and policies such as National Strategy for Artificial Intelligence, National Drones Policy, and
National Digital Communications Policy 2018 amongst others – policymakers are creating a conductive environment for
start-ups to build solutions without ambiguity around rules and regulations. These measures open up the expanding
targetable market opportunities.
45
The hypothesis that India-specific technology
Building on stacks are driving innovation has been proven to
be true. India Stack has provided start-ups a new-
India’s unique age innovation architecture that fundamentally
reduces the time-to-market and challenges
digital industry norms.
While majority of current use-cases are in banking
infrastructure and financial services – there is a second-order
effect across insurance, Edtech, and Healthtech
sectors.
We can expect the impact of India-specific

technology stacks on market dynamics to be a key
driver in the ecosystem’s growth. It can also,
potentially, enable global disruption in industries
#04 like Healthtech, Edtech, and financial services.
The India Stack has been one of the biggest reasons for India’s
successful technological inclusion of its citizens
INDIA STACK IN NUMBERS1
Contextual Use-cases
India Stack is a complete set of APIs that digitize elements such as 1.2B 34.8B
authentication, digital signatures, and payments Enrolments (till Oct 2019) Authentications (till Oct 2019)
Consent layer Open Personal Data Store 1,148.3M INR 1,91,359 Cr

Transactions in Oct 2019
Transacted via UPI in Oct 2019
India Stack
2.4X since Oct 2018
Cashless layer IMPS, AEBS, APB, and UPI
7.6B
E-kyc processed (till Oct 2019)
Paperless layer Aadhar e-KYC, E-Sign, Digital Locker
31.6M 3.7B
Registered users (till Oct Issued Documents (till Oct
Presence less layer Aadhar authentication 2019) 2019)
Jan Dhan, Aadhar, Mobile
Source/Notes: iSpirt, uidai.gov.in, npci.org.in, digilocker.gov.in, (1) All numbers are updated till Oct 2019 Illustrative / Not Exhaustive 47
Start-ups are leveraging India Stack’s disruptive nature to provide
seamless services to customers
India Stack’s Open APIs allow for 3 rd party disruption
Start-ups leveraging India Stack
Cuts Transaction Cost

Background
1
Verification
Cuts Onboarding Cost
2 Payments
Ubiquitous, Inclusive Platform
Contextualised Offerings 3 Lending
Innovation
Paperless
4
Consent
Aligns Market and Social Goals
Tax
5
Compliance
Trust-based system
Source: iSpirt, Zinnov Research and Analysis Illustrative / Not Exhaustive 48

Success of India Stack in driving innovation is expected to compound
with new and upcoming government platforms
Cases
Use
Data Aggregation and Analytics Data Security Tech-Driven Point Solutions Socially Inclusive Solutions
State-insurance Health-wellness Financial Financial Upskilling

systems Information Job Portals
clinics Information Users Companies
Providers Wealth Manager,
National Health Stack
Ayushman Bharat credit lenders, etc

e-Hospitals / Apps Academic Institutes Employers
Portal Bank, GST Platform,
Skilling Stack
Mutual Fund House,
Insurance Provider,
Sahamati
etc
Claims & Personal Health Encrypted Trusted credentials

Coverag Health Analytic Aggregated from institutes and
es Records s Account Information employers
National Health Registries Financial Data Access Fiduciary Skills Registry
INDIA STACK
Sources: sahamati.org.in, nit.gov.in, ispirit Illustrative / Not Exhaustive 49

With strong drivers the trend is expected to gain momentum as more
success stories emerge
Strong commitment and support from policymakers
With the success of India Stack, the Government has increasingly leveraged technology for the nation’s growth and to
deliver public goods. Multiple bodies have articulated their intent to expand the technology stack to energy, governance,
edtech, transportation, and Agritech sectors.
.
Adoption Initiatives by Government and Industry Bodies
Various industry bodies that engage with corporates and start-ups have created dedicated programs to create awareness
on existing platforms and increase adoption of existing stacks. E.g. NPCI's collaboration with T-Hub and Maharashtra
Innovation Society to drive national building goals through India Stack.
Economic advantage observed by start-ups and companies leveraging the India Stack
Start-ups have begun to observe the advantages of adopting government-built stacks. Expanding total addressable
market along with better access and lower cost structures are strong drivers for start-ups to serve large untapped
markets.
50
Improved connectivity and increased technology
Serving the adoption have significantly improved the
addressable market in India. Entrepreneurs are
Underserved increasingly building products across sectors for
these markets.
Indian SMBs and consumer segments are not only

large markets by themselves – servicing them can
potentially unlock larger under serviced global
markets for Indian start-ups.
With increasing internet penetration, expanding

technology access, and improving ease with online
transactions – we expect more entrepreneurs to
#05 service the challenging but under tapped markets.
With shifting income segments and improved connectivity the target
addressable market in India is growing
Est. Number of connected Expected growth in per- Share of internet users from
600Mn consumers by 2019 3X capita income by 2025 46% rural areas by 2019E
Number of Million households, by income (Millions)
2005 2016 2025 E
India 1
10.1 23.5 48.8
> $15.4k
(4.5%) (8%) (16%)
annual gross HH income
India 2
106 161 201
$2.3K - $15.4K
(50%) (60%) (66%)
India 3
93 82 55
< $2.3K
(44%) (31%) (18%)
Source: BCG Report 2017-The New Indian, Kantar IMRB 52

Start-ups with India 1 as primary market are focusing on user
experience, personalization, and niche use-cases
Illustrative use-cases and start-ups across different sectors
Wave 1 Wave 2 Wave 3
• Personal loans marketplace • Investment platforms • Credit score management

Fintech • Insurance comparison portals • Expense tracking • AI-based wealth management
• E-wallets • P2P lending platforms • Internet first banks
• Online medicine stores • Health Information • Healthtech financing

• Telemedicine portals • Parenting/Baby care services • Personalized genetic testing
Healthtech • Health record managers • Diabetes management • Robotic exoskeletons & bionic arms
• Wearables for health monitoring • Assistive Tech • AI driven automated diagnosis
• Multilingual test preparation sites • Gamified education • Assistive tech for visually impaired
Education • Micro job/internship portals for • University admission & discovery • AR based learning
students

For India 2, start-ups are using vernacular languages and business
model innovation to target multiple use-cases
Top Sectors Trends Use-cases Illustrative start-ups
E-stores
E-commerce platforms are leveraging vernacular
E-commerce platforms and social media to reach out to their Vernacular content
customers
Second-hand market
To finance the unbanked and underbanked, start- P2P Lending

ups are trying different models of loans, insurances,
Fintech and investment platforms which leverage UPI for
Bite-size insurance
payments Pay-day loans
Gamification
With the mobile phone penetration exceeding 700
Edtech Mn, Tech-based education has become the go-to Test Preparation
delivery model disrupting traditional classrooms Tutor Discovery and Doubt
clearing
Online Pharmacy
Start-ups are leveraging digital technology to
Healthtech improve access, affordability, and quality of Telemedicine
Healthtech for the Tier II and Tier III populace
Low cost diagnostics
Precision Agritech
A segment traditionally slow in adopting technology
Farm implements
is seeing start-ups utilize frugal innovation to create
Agritech low cost data driven tech solutions to improve yield IoT and Big Data
and farmer efficiency
Farmer Consultation

20% of B2C start-ups are working towards building solutions for India
3 market with focus on necessities
iDream Education
Krishworks
Tablet-based E-learning
A tech-enabled activity center
solutions designed for
for learning English. Provides
government schools and offers
tablet-based solutions to make
content in different vernacular
Education languages
learning interesting for kids.
Lifetron Inno Equipment

Gramin Healthtech
Developed a portable
Provides affordable and
Healthtech phototherapy unit used in
accessible Healthtech facility in
jaundice treatment of newborns
rural India through telemedicine
in rural areas
Fintech Kissht
Gram Cover Offers a line of credit to buyers
Online insurance marketplace to make online purchases.
focused on rural areas. Users can pay for purchases
over time in EMIs.

Start-ups are also building solutions for digital SMBs
Ubiquity Of Connectivity Technology

Speed Of Transactions Rise In Discoverability Enhanced Productivity
& Communication Sophistication
Workflow
Product Digital Banking
Management
Discovery
Online platform for
Analytics platform
banking and
Low Cost ISP CMS enabled
intercompany
to track expenses
UPI Payments product discovery
settlement for
reporting, sales
Sachet size App platform
SMEs
leads, and other
broadband business workflows
connection for E-commerce
SMBs at INR 2 per payment and digital Business RPA
GB. wallet unicorn Travel services
Process
Discovery RPA Tool for
Management
access control,
Aggregator of end- version control,
WiFi POS and Self- to-end travel and Mobile-based CRM business & IT
Management platform and data reports, audit
checkout tourism operators
management tool logging, etc.
Retail WiFi SaaS enabled
solutions and real- Virtual
platform- Reseller
time analytics for independent, POS Accounting Assistant
retailers. Network
billing system
Mobile-based AI-based on-
E-commerce digital transaction demand concierge
distribution channel recording solution service for travel
for non-traditional
for SMEs and hospitality
SMBs
SMEs
Source: Zinnov Digital SMB Report 2019 Illustrative / Not Exhaustive 56

Trend is expected to gain momentum on account of large untapped
markets and improving connectivity
Expanding addressable target market
With success of India Stack, the Government has doubled down on leveraging technology for nation’s growth and for
delivering public goods. Multiple bodies have articulated intent to expand technology stack to energy, governance,
edtech, transportation and Agritech sectors. This is supported by projects like Digital MSME.
Improving connectivity and increasing comfort with digital technology
87% of India’s internet users are classified as regular users. With only 40% penetration the base is expected to grow
rapidly. With among the lowest data rates, India already has the highest per capita data usage. Coupled with increasing
adoption of UPI for micro-payments it is expected that the odds of online transaction will increase rapidly in coming years.
Large, untapped and unique market with global opportunity
India’s unique demographic and income mix requires heavy localization of products and solutions for them to succeed at
scale. Proximity to a large untapped market with improving accessibility and affordability quotient is expected to be the
biggest attraction for start-ups. Importantly, research notes that these solutions can be offered to 5.8Bn people globally.
57
Ecosystem’s effort to promote product start-ups
Built in India. from India for global markets has begun to yield
results. More and more entrepreneurs are building
Branded technology products from India and targeting both
western and eastern countries.
Global.
Simultaneously, access to markets and quality
talent base continues to attract global start-ups,
including unicorns, to build products from India.
The numbers continue to increase.
With access to large markets, high quality and

relatively inexpensive talent, and an increasing
knowledge base – we anticipate that the Indian
# 06 ecosystem will build more and more globally
recognized products.
21% of Indian start-ups are primarily focusing on global markets
Distribution of start-ups on the basis primary

market geography
CAGR increase in no. of Indian start-ups

18% focusing primarily on global markets since
49% 15%
2014
29%
Of the start-ups are B2B, which suggests
70% that entrepreneurs are taking a balanced
view before selecting use-cases
3%
Of these start-ups are based out of either

80% Delhi-NCR, Bangalore, Chennai, or Mumbai 4%
United States Europe Africa APAC Australia
Note: Analysis of start-ups founded between 2014-19 59

Start-ups are building solutions across multiple sectors
Enterprise Fintech Real Estate & Construction Retail & Retail tech
Foyr Manufacton Vue.ai

Founded year: 2014 Founded year: 2014 Founded year: 2015
HQ: Hyderabad HQ: Bangalore HQ: Chennai
MoEngage WeInvest Geo Served: United States Geo Served: United States Geo Served: North America, EU
Founded year: 2014 Founded year: 2014 Total Funding Raised: $9.7 Mn Total Funding Raised: $3.5 Mn Total Funding Raised: $27 Mn
HQ: Bangalore HQ: Bangalore
Geo Served: United States Geo Served: APAC
Total Funding Raised: $16.8 Mn Total Funding Raised: $12.3 Mn
Travel & Hospitality Education
Oxfordcaps Headout Unacademy

Fyle Active Intelligence Founded year: 2017 Founded year: 2014 Founded year: 2015
Founded year: 2016 Founded year: 2016 HQ: Gurgaon HQ: Bangalore HQ: Bangalore
HQ: Bangalore HQ: Bangalore Geo Served: APAC Geo Served: United States Geo Served: United Kingdom
Geo Served: United States Geo Served: APAC, US Total Funding Raised: $11.3 Total Funding Raised: $13.8 Total Funding Raised: $90.2Mn
Total Funding Raised: $10.6 Mn Total Funding Raised: $14.7 Mn Mn Mn
Healthtech & Wellness SCM & Logistics
Flock Drip Capital

Founded year: 2014 Founded year: 2014 Innovaccer Qure.ai Locus
HQ: Mumbai HQ: Mumbai Founded year: 2017 Founded year: 2016 Founded year: 2015
Geo Served: United States Geo Served: United States HQ: Noida HQ: Mumbai HQ: Bangalore
Total Funding Raised: $45 Mn Total Funding Raised: $45.1 Mn Geo Served: United States Geo Served: Asia, NA, EU Geo Served: United States
Total Funding Raised: $111 Mn Total Funding Raised: $2.3 Mn Total Funding Raised: $32.5
Mn
Density of Start-
ups: High Medium Low

Also, start-ups with India as an initial market are now going global
Journey of start-ups foraying into global markets
Pinelabs After investment of $125 Mn from

YoI: 1998 In 2009, Pinelabs ventured into In 2017, the company entered Temasek & PayPal, the company is in
HQ: Noida the mainstream payment space Malaysia with an exclusive partnership talks with in with international banks
Funding Raised: $227 Mn to provide solutions to merchants with CIMB bank to expand its operations to middle
Sector: Fintech east
Practo With $90 Mn, raised from Tencent, Practo. With $ 55Mn Series D funding
YoI: 2008 Sequoia Capital, Altimeter Capital and led by Tencent along with Ru-Net, RSI
In 2013, Practo opened up in
HQ: Bangalore others. In 2015, Practo launched in Fund and Thrive Capital, Practo is
Singapore.
Funding Raised: $179 Mn Indonesia and Philippines. In year aiming to broaden that international
Sector: Healthtech 2016, Practo launched in Brazil. footprint
Paytm
After raising $1.4 Bn from Softbank.
YoI: 2010 After raising $472 Mn from
In 2017, Paytm launched its app Paytm launched PayPay in Japan in
HQ: Noida Alibaba Group, Paytm became
“Paytm Canada” in Canada joint venture with Softbank and Yahoo
Funding Raised: $2.8 Bn Unicorn in 2015
Japan
Sector: Fintech
GOQii In 2015, GOQii received $13.4 Mn Goqii is going to work extensively with
YoI: 2014 In Dec 2016, GOQii in partnership with
from Cheetah Mobile and NEA in Mitsui & Co, an active investor, to
HQ: Mumbai Amazon Launchpad program goes
order to accelerate its growth in establish its foothold in Asia’s second
Funding Raised: $50 Mn global to UK, USA and Canada
US and China largest economy
Sector: Healthtech
Other Examples:
Source: News media, Zinnov CoNXT Research and Analysis Illustrative / Not Exhaustive 61
Additionally, global unicorns and start-ups are leveraging the Indian
ecosystem to build innovative products
Global HQ location split of start-ups with R&D presence in

Illustrative list of global start-ups with R&D presence in India
India
7%
2%
6%
United States United States United States
United States 8%
R&D Centre:
R&D Centre: Bangalore R&D Centre: Noida
Singapore Bangalore, Pune
United Kingdom
United Arab Emirates
Others United States United States Australia
77%
R&D Centre:
R&D Centre: Bangalore R&D Centre: Bangalore
Bangalore, Vadodara
Of all start-ups are in the Enterprise Tech

48% sector United States United States Singapore Singapore
R&D Centre: Bangalore R&D Centre: Bangalore R&D Centre: Bangalore R&D Centre: Bangalore
Global Unicorns have an R&D centre in India.

20+
- 3X increase since 2015
UAE United Kingdom Canada Germany

R&D centres of global start-ups, in India, are
85% R&D Centre: Bangalore R&D Centre: Mumbai R&D Centre: Gurgaon R&D Centre: Mysore
based in Bangalore
Indicates unicorns
Source: Zinnov Illustrative / Not Exhaustive 62

With inherent local advantages, start-up will continue to leverage
India to build world-class products and solutions
Large and quality talent base
India has a strong technology talent base which can be leveraged at a fraction of the cost as compared to other global
locations like USA and UK. This creates a strong incentive for start-ups, like large corporates, to build in India.
Business model advantage
New business models for technology products allows for inside sales from India allowing global players to adopt solutions
from start-ups without long sales cycles. There has also been an increased openness from customers to try new and
competitive solutions which has allowed India-built solutions to go global.
Improving institutional support
A Trifecta of factors like global start-up missions, overseas investors, and support from experienced founders has
improved the access global market. For example, Softbank enabled Oyo and Paytm to enter markets like China and Japan;
while Start-up Canada has provided Indian entrepreneurs an alternate launchpad to access the North America market.
Increasing corporate R&D participation in the Ecosystem
Global corporate R&D centres are leveraging open innovation to drive internal mandates. This, in turn, is allowing Indian
start-ups to solve global challenges early in their lifecycle and gain customer base before building overseas presence.
63
Unlike 2018, this year investments were better
Strengthening distributed across different round sizes. This led to
an increase in the number of start-ups with total
pipeline of funding greater than $50 Mn, creating a strong
pipeline of potential unicorns.
potential An expanding pool of start-ups with resources
unicorns available to gain market share and leadership, also

confirms that the years 2018 and 2019 were not an
exception in terms of number of start-ups
becoming unicorns.
Growing pool of experienced operators along with

India’s unique parallel start-up ecosystem, is
expected to support continuous growth of the
# 07 ecosystem.
Unicorn club has significantly expanded in 2019
Number of Start-ups that achieved Unicorn status in
Location 2018 2019
Delhi-NCR 4 2
07 71% Bangalore 3 2
Mumbai 1 1
Number of Unicorns % share of B2B in recent
added in 2019 unicorns Chennai 1
Pune 2
• 2019 witnessed addition of 2 unicorns from Pune. This is second year in a row
Unicorns in 2019
where a start-up outside Bangalore, Delhi-NCR and Mumbai has achieved a
unicorn status
• 5 of 7 unicorns added in 2019 were B2B – highest ever in a year till date
• Indian unicorn club now has companies in gaming, supply chain and logistics,
enterprise, e-mobility in addition to e-commerce and mobility
Source: News media, Crunchbase 65

India has its largest pipeline of potential unicorns, ever
Share of start-ups1 with total funding raised greater than

Number of Start-ups1 having greater than $50 Mn funding
$50Mn, by founding year
Start-ups that were

founded between 2009-19
120+ 50+
Start-ups that were
founded between 2014-19
35
28
24
21 • Pace of investment suggests that start-ups, founded in 2014-19,
are scaling quicker than their older peers
• These start-ups constitute almost approximately 41% of the
1 total pool of all companies with greater than $50Mn in
cumulative funding
50-100 Mn 100-500 Mn > 500Mn
2009-13 2014-19
Note: above stats do not include unicorns
Note: (1) Start-ups founded in 2009-19 have been considered for analysis 66
2019 was remarkable in terms of number of start-ups added to the
potential unicorn pool
Cumulative Number of start-ups, by total amount raised
35+ 3X 6X $ 50-100Mn $ 100-500Mn
Number of start-ups Growth in the base of Growth in start-ups

added to the pool with Start-ups with more than with total funding in the 24
more than $50Mn in total $50Mn in total funding range of $100-500Mn
funding
• Compared to previous years the equity funding in 2019 (Jan to Aug) was more
distributed 4 28
• In 2018, unicorns had cornered large percentage of investments through mega

funding rounds 2 11
4
• In 2019, we have not witnessed any funding round greater than $500Mn yet
As of 2017 As of 2018 As of 2019 (Till Aug)
Note: Analysis of start-ups founded between 2014-19 and with total funding more than $50Mn+. Does not include start-ups that became unicorn on or before 31-Aug-19 67
We have an increasingly heterogenous mix of start-ups across
sectors
Fintech Mobility Healthtech
Number of Sectors • SME Capital financing • On-demand rental services • Online Pharmacies and
13 focused by potential
unicorns
•
•
Consumer Lending
Online & Offline Payment
•
•
Intra-city commute pooling
Bike taxi services •
Teleconsultation services
Health and Fitness platforms
solutions for enterprises • Aggregator for doctors and clinics
Number of Sectors
9 with minimum 3
start-ups in the pool
Retail & Retail Real Estate &

tech SCM & Logistics Construction
• Industrial goods marketplace • B2B logistics management • P2P listing of residential

• Purchase assistance platforms • Goods and Freight monitoring properties
• Horizontal platform • Freight transport booking • Marketplace for shared rentals
Note: Analysis of start-ups founded between 2014-19 and with total funding more than $50Mn+. Does not include start-ups that became unicorn on or before 31-Aug-19 Illustrative / Not Exhaustive 68
Within their sectors the start-ups are targeting varied end customers
Market Focus
Share of B2C start-ups MSME India 1

64% in $50Mn+ funding pool
Qtrove
Founded year: 2016 CRED
Sector: Retail & Retail Founded year: 2018
tech Sector: Fintech
Funding Raised: $51.58 Funding Raised: $147 Mn
OkCredit Mn
Founded year: 2017
Sector: Fintech
Funding Raised: $84.87 Mn
Share of B2C start-ups India 2
80% that serve India 1 and
India 2 markets Spinny
Sharechat
Founded year: 2015
Founded year: 2015
Sector: Automotive
Urbanclap Sector: Social Platform
Funding Raised: $80
Founded year: 2014 Funding Raised: $224 Mn
Mn
Sector: Local Services
Funding Raised: $215 Mn
Share of the B2C start- Large Corporations

10% ups serving India 3
market Pi Datacentres
Razorpay
Moglix Founded year: 2014
Founded year: 2015 Founded year: 2014
Sector: Fintech
Sector: Retail & Retail tech Sector: Enterprise
Funding Raised: $107
Funding Raised: $101 Mn Funding Raised: $118 Mn
Mn
Note: Analysis of start-ups founded between 2014-19 and with total funding more than $50Mn+. Does not include start-ups that became unicorn on or before 31-Aug-19 Illustrative / Not Exhaustive 69
A growing pool of experience operators and India’s parallel ecosystem
will enable continuous expansion of the pipeline
India’s parallel start-up ecosystem
The parallelism observed with the rise of one start-up triggering the growth of other, solving complementary problems is
expected to strengthen the pipeline of Unicorns in future as seen in the case of Flipkart and PayTM in the past. This is a
unique feature of the Indian start-up ecosystem compared to the sequential growth of sectors in US and China
Improving Institutional Support
Committed policy support to open new markets, improve regulations, and provide enabling innovation architecture; and an
expanding pool of global investors looking to add value beyond just investment – is creating suitable environment for
start-ups to target more opportunities and access resources required to grow.
Growing and accessible pool of operators
The consistent increase in continued participation of experienced operators in the ecosystem has led to the creation of
strong knowledge base and best practices for the newer pool of start-ups. Moreover the first batch of entrepreneurs and
start-up employees with experience in growing a new business – are allowing newer firms to grow more efficiently.
70
We observed a consistent increase in continued
2nd Innings participation of entrepreneurs, investors and
former employees of start-ups in the Indian
ecosystem, albeit in different personas compared
to how they started.
Not only does this reflect positively on the country,

it augments the overall growth of the ecosystem
as the hands-on knowledge is retained and shared
with the larger pool.
On the basis of global data, as ecosystem matures,

we can expect an increasing number of individuals
to continue to be part of the ecosystem – and don
# 08 multiple hats/personas.
First cohort of successful entrepreneurs are turning into angel
investors to support the start-up ecosystem
Entrepreneurs Invested Start-ups

Number of start-up founders (with >3
55+ investments) actively investing in the
ecosystem; up from 45+ in 2018
Kunal Behl
Angel Investor 30
Founder - Snapdeal
Total number of start-ups1 funded by

220+ founders; up from 210+ from 2018 Vijay Shekhar
Sharma
Angel Investor
25
Founder - Paytm
• Entrepreneurs turned investors are bringing more Girish

Mathrubootham
maturity to the start-up ecosystem
Angel Investor
22
• Having had a stint as a prior entrepreneur they are Founder - Freshdesk
more capable mentors for the first timers than the
other angels Amit Ranjan
• Serial Entrepreneurs turned investors are taking Angel Investor 11
Founder - Slideshare
initiatives to solve for the capital starve in seed
stage ecosystem. E.g. 100.VC, angle networks
Ramakant Sharma
Angel Investor
Co Founder- 7
Livespace.com
Note: (1) Start-ups founded in 2014-19 Illustrative / Not Exhaustive 72

Pool of serial entrepreneurs is growing, slowly but surely
Illustrative List
Start-ups1 have been founded

150+ by serial entrepreneurs Amit Gupta Kunal Shah
Founded Founded
Yulu (Funding Raised: $6.8 Mn) CRED (Funding Raised: $147 Mn)
Inmobi (India’s first Unicorn) Freecharge (Acquired by Axis Bank)
• Serial entrepreneurs typically have better

odds of success than new entrepreneurs
• Their continuous participation is reflective Anand Jain Kashyap Deorah
Founded Founded
of the opportunities at hand
Clevertap (Funding Raised: $41.6 Mn) Hypertrack (Funding Raised: $8.5 Mn)
• And of a maturing ecosystem – as past Burrp (Acquired by Infomedia18) Chalo (Acquired by opentable)
Chaupaati Bazaar (Acq. By
experience continues to contribute to Futurebazzar.com)
future growth
Kumar Rangarajan Saurabh Kochhar

Founded Founded
Slang labs (Funding Raised: $1.2 Mn) Meddo (Funding Raised: 3.6 Mn)
Little Eye labs (Acquired by Facebook) Foodpanda (Acquired by Ola)
Printvenue (Funding Raised: $4.5 Mn)

Having witnessed from sidelines, investors are becoming
entrepreneurs
Illustrative List
Number of start-ups1 founded by

20+ former (fulltime) investors
Abhishek Shah Amiya Adwitiya
CEO & Co-founder, Wellthy CEO & Founder, Squadcast
Therapeutics Ex Investment team, Accel
Investor turned entrepreneurs have been observed Ex Vice President, Unilazer Partners
to have certain advantages: Ventures
• Easier access to the funding Network Anshoo Sharma Alok Mittal

CEO & Co-founder, Magicpin CEO & Co-Founder, Indifi
• Fiscal Discipline - strong determination to derive Ex Venture Partner, Technologies Pvt Ltd
maximum value from every penny spend LightSpeed India Partners Ex Managing Director,
Cannan Partners
• Learning from the mistakes of entrepreneurs that
they have funded in past
Bala Parthasarthy Dr Ritesh Malik
• Broader business perspectives CEO & Co-Founder, CEO & Founder, Innov8
Moneytap Coworking
Ex Managing Partner, Prime Ex Founder, Geurilla Ventures
This micro-trend is reflective of the whitespaces Ventures
and opportunities at hand in the ecosystem.
Sahil Kini Subramanya SV
CEO & Co-founder, Setu Co-Founder, Fisdom
Ex Venture Advisor, Aspada Ex Managing Director,
Investments Bessemer Venture Partners

The ecosystem flywheel is in motion with each successful start-up
becoming a launchpad for a larger number of start-ups
Other “Mafias”
20+ Start-
ups
emerging
from
Zoho
20+ Start-ups founded by 10+ Start-ups founded by

20+ Start-
ex Zoho team ex FreshWorks team
ups
emerging
from
Zoho
Source: Zinnov CoNXT Research & Analysis Illustrative / Not Exhaustive 75

The trend is expected to intensify, as a virtuous cycle expands on the
back of a growing start-up ecosystem
Preference for Experienced Operators
As per research, individuals with prior exposure to start-up ecosystem can reduce failure rates and produce more
successful exits with their tactical, experiential knowledge and easier accessibility. This automatically makes them a
preferred choice for different roles.
More friendly environment to start-up
With more availability of capital, strong support of the ecosystem, wider talent base and expanding targetable market base
across the sectors - the environment for setting up a start-up has improved as compared to the 1st innings of the
operators. This combined with prior experience makes a new venture more attractive.
Expanding base of successful start-ups
As the number of successful start-ups increase, it is only natural for us to witness more experienced operators taking up
newer roles. In mature ecosystems like US, it is estimated that 10% of all active founders are serial entrepreneurs and a
higher base has had some prior experience with the start-up ecosystem.
76
In 2019 witnessed an increase in number of
Evolving institutional investors and a change in how angel
investors source and execute deals.
investor This shift in investor mix led to an increase in
landscape average deal size but a drop in the number of

deals and net new start-ups funded. It also led to
investors moving upstream for a variety of
reasons. Interestingly, we witnessed investors
innovating on their unique value proposition to
attract start-ups.
With policymakers proactively resolving issues,

increasing number of new and renewed funds, and
quick follow-on rounds – we can expect the
# 09 investors to become creative and innovative.
We witnessed a balanced distribution of investments across round
sizes
Total Investments across different round sizes
1610
2018 (Jan to Aug)1
2
• Drop in deals smaller than $1Mn is attributed to the
2019 (Jan to Aug)
challenge with Angel Tax that lead to a large drop in
number of active investors; it also lead to drastic
reduction in unique start-ups funded at seed
1071
• Institutional activity at seed stage, though higher,
988 1000
translated into larger cheques and hence round size
852
• 2019 has not witnessed any mega funding rounds
783
greater >$500Mn in a single start-up
566
534
406
102
47
< $1Mn $ 1-10Mn $ 10-50Mn $ 50 -100Mn $ 100 - 500Mn > $ 500Mn
Note: (1) Funding Analysis is done for Start-ups founded between 2013-18; (2) Funding Analysis is done for Start-ups founded between 2014-19 78
Angel investors are taking new approaches for deal sourcing and
execution
Deal Sourcing
Organized Networks Angel Networks
Number of active
1,100+ angel investors
Investment Platforms
Deal Execution
Benefits of Angel Funds
Traditional Approach New Approach
Completely Private
Angel Funds, sub category of CAT 1 Venture
Direct investment into a start-up either via
Funds registered with SEBI. These allow, up to Easy and quick investment into start-ups;
debt, equity or convertible debt. This not only
200 investors to leverage single investment single entry on the cap table
resulted in immense paperwork and increased
vehicle with - Min Investment amount of INR
the time-to-closure for a round – it also led to Diversified risk with no limit on Number of
25L and Max of INR 10 Cr per investor. With deals or investment per deal
the “Angel Tax” challenge which was resolved
only 1 year Lock-in period it allows
only after mid-2019. Indirect impact is the growth in new lead
investments in companies within 5 years of investors; and future fund managers
incorporation
Source: Angelist, Letsventure, Article by hindubusinessline: SEBI paper suggests doubling PMS investment floor to ₹50 lakh Illustrative / Not Exhaustive 79
There has been an increase in the number of active institutional
investors across the board
Number of unique investors by round size
294
1
2018 (Jan to Aug)
270
2
2019 (Jan to Aug) • 14% increase in # of unique investors in 2019 as
compared to 2018.
• Given the institutional preference for a minimum post
205 deal equity ownership, the entry of institutional investors
also led to an increase in the average deal size at seed
174
stage.
• Overall, there has been an increase in the number of
unique investors across all funding rounds – except
marginal drop in $1-10Mn round sizes.
• This has also contributed to an increase in the number of
70 72 funding rounds in $50-500Mn round size.
35
29
1-10 Mn 10-50 Mn 50 -100Mn 100 - 500Mn
Note: (1) Funding Analysis is done for Start-ups founded between 2013-18; (2) Funding Analysis is done for Start-ups founded between 2014-19 80
Investor pool composition is shifting, with clear increase in private
equity investor across rounds
Breakdown by Deal size - $1Mn - $10Mn $10Mn - $50Mn $50Mn - $100Mn $100Mn - $500Mn
Venture Capital Private Equity

Number3 of unique and active investors Number3 of unique and active investors
37
17
49
14
25 15
120
94
5
5 28
18
105 108
18
10
1 2 1 2
2018 2019 2018 2019
Private Equity participation has increased across all the deal

Participation from relatively lesser known Venture Capital from
size types on account of seeking better returns and reserving
overseas has increased across the board
right to play in larger rounds
Note: (1) Funding Analysis is done for Start-ups founded between 2013-18; (2) Funding Analysis is done for Start-ups founded between 2014-19 (3) Graph represents unique
81
investors in a particular round size. It is likely that a investor may have invested across different round sizes in same or different start-ups.
Seed and early stage institutional investors are responding by
increasing focus on downstream investments
Launched ReBound accelerator program focused on second and third time Primary drivers:
founders. Peer learning program is designed to engage 8-10 start-ups at a time.
• Provides an opportunity to take position in start-ups

early-on, potentially leading to better returns
Launched Arka Venture Labs in partnership with Silicon Valley based fund - • Allows investor to solve for “opportunity cost”
BGV and Emergent. Initiative focuses on B2B start-ups and provides them up to
• Tap into opportunity available due to reduction in angel
$200K in investment with mentorship
investors
• Allows for choice at later stages where the fund primarily
operates
Operates Extreme Entrepreneurs zero-equity and zero-cash program focused
on early stage start-ups. Program engages 8-10 start-ups each year while • Allows investor to create a moat around primary
providing certain benefits to Top 40 applicants. investment stage by offering tangible value
Launched Surge accelerator program for India and South Asia. Program
invests up to $2Mn in each start-up and encourages co-investment.
Source: accel.com, arka.vc, ee.lsvp.com, surgeahead.com Illustrative / Not Exhaustive 82

Deployment pressure for existing investors and proactive focus from
global investors is expected to make ecosystem more competitive
Return of Angel Investors
With increase in early stage investments and overall improving rate of follow-on funding – angel investors are expected to
return in 2020. These could be direct investments or through Angel Investment Funds – either way, the seed stage
investments are expected to improve and become more competitive.
Increase in Fund of Fund
A new INR 20,000 Crore seed stage Fund of Funds announcement from Govt. of India is expected – this will make available
capital for institutions to create more micro-VCs and VCs in the Indian ecosystem. To compete for quality start-ups – it is
expected that investors focus on select thematic areas to offer deep capabilities and value beyond capital.
Ecosystem Arbitrage
Indian start-up ecosystem is more frugal compared to other geographies. This coupled with relatively lower valuations is
becoming an attractive proposition for global investors to expand into new sectors / use-cases; and into newer
geographies.
Increasing dry powder with institutional investors
As per SEBI, as on June 2019, Venture Capital Funds (category in Alternate Investment Funds) have raised commitments
of INR 21,000+ Crores with INR 7000+ Crores raised. This is 50X growth compared to cumulative net figures released for
Jun 2014. Coupled with overseas VC, PE and Corporate investors – Indian ecosystem will only become more competitive.
83
Corporate participation in 2019 increased
Intensifying significantly with large enterprises investing,
acquiring, and building commercial partnerships
corporate with start-ups. This is a reflection of their growing
participation
confidence in Indian start-up ecosystem.
Corporate participation is important as it enables

both revenue and exit opportunities for start-ups.
Both are critical for the ecosystem to grow
sustainably.
Given the relative low participation compared to

other ecosystems, and ever increasing market
pressure – corporate participation is expected to
# 10 stay strong.
Corporates are using multiple approaches to engage with Indian start-
ups
There is an increase in the number of unique

corporates transacting with the start-ups ecosystem
in India Overall numbers are higher than 2018 (Jan-
80+ Investments
Aug)
12-15%
140+ Indian and Global corporates accounted for
30+ M&A
Growth Y-o-Y 50% of all acquisition deals in 2019 (Jan-Aug)
Unique
Corporates
Open Companies are using a combination of

50+ Innovation accelerators, incubators and partner
programs to engage start-ups.
Note: Analysis of deals and active programs in 2019 from Jan to Aug 85
Corporates are actively participating in equity funding rounds
New and inactive investors Number of Active and Unique corporate investors
returned to India by funding round size
12 16
< $1Mn 6
$1-10Mn • On an average corporate investors tend to participate in
$10-50Mn 1-2 deals each year
$50-100Mn 30 • This leads to churn in the active investors each year –
$100-500Mn 40 however, this cannot be construed as lack of interest
• Corporate Venture Capital companies are an exception,
with consistent participation in 3-4 deals each year on
an average
• $10-50Mn round sizes are preferred by majority of the
80+ 10% 90% corporate investors
Number of corporate Increase, compared to Of the corporate

investors active in 2018 (Jan-Aug) investors are global
2019 (Jan-Aug) MNCs
Note: Analysis of deals in 2019 from Jan to Aug Illustrative / Not Exhaustive 86
Corporate participation in M&A is steady
Split of deals, by Acquirer

2018 2019
(Jan to Aug) (Jan to Aug)
~
36 M&A deals 35 M&A deals
17
• The share of Indian corporates in total deals has
26
increased in 2019 primarily due to active participation by
Reliance Industries
• Number of unique corporates, across all M&A
transactions, decreased marginally, from 35 in 2018 (Jan
18 to Aug) to 31 in 2019 (Jan to Aug)
10
2018 (Jan-Aug) 2019 (Jan-Aug)
Indian Corporate Global Corporate
Note: analysis of deals involving start-ups founded in 2009-19
Note: Analysis of all deals in Jan-Aug of 2018 and 2019 87

Acquisitions are driven primarily to build technology capabilities
50% 24% 15% 11%
Building Tech Capabilities Product Portfolio Market Expansion Acqui-Hiring

Expansion
Expand capabilities across Strengthening of their position Expansion into new markets, Talent acquisition to improve pace
Analytics, Innovation, Platforms, and expansion of product enhancing business model etc. of deep-technology adoption
etc. portfolio
Acquired to integrate multilingual Acquired to develop an

capabilities on its consumer add an augmented reality Acquired to enter into case- Acqui-hired to build their COE
platforms platform Holoboard to its based problem solving specialising in Data Science and
portfolio. community platform & medical AI driven solutions.
test preparation business in India
Acquired to augment its contact Acquired to enhance its product Acquired to expand in the online Acqui-hired to work in its health
center portfolio with predictive portfolio to increase customer education space. and wellness space and digitize
analytics. engagement its retail services
Note: Analysis of deals in 2019 from Jan to Aug Illustrative / Not Exhaustive 88
Corporates are taking initiatives for open innovation to capture
extrinsic value of a start-up
Incubator
• Corporates are leveraging start-ups to solve business challenges to deliver A fixed term, 6-24 month long, cohort-based
revenue growth, cost savings, and/or improve customer experience program for pre-seed start-ups typically focused on
Horizon 2 and Horizon 3 opportunities. Invariably,
• Corporates are increasingly building structured programs to build repeatable these are equity-based programs for corporates to
and replicable processes to collaborate, at scale get early access to large pool of ideas/solutions.
Accelerator
A fixed term, 3-6 month long, cohort-based program

for pre-growth and growth stage start-ups. During
program, the emphasis is on building proof-of-
concepts and/or on integrations to determine on long
term engagement.
50+ 14 60%
Partner Program
A requirement-based program, where corporate

Number of Active Open Number of industry Of all corporates are business units define problem statements that they
Innovation programs run verticals across which Global MNCs with R&D are looking to solve, and partner with growing, mid,
by corporate R&D centers corporates are centers in India or late stage start-ups to build complimentary
in India collaborating with start- solutions in exchange for a financial commitment.
ups
Note: Analysis of structured and active programs in 2019 89

Corporates are already registering success stories via structured
collaboration programs
Platform Evangelization License or Vendor Agreement Joint Go-To-Market Co-Innovation
Corporates offer access to their Corporate leverages start-up for Corporates partner with start-ups to Start-ups and corporates collaborate
platforms to start-ups internal challenges or integration. cross-sell solutions to co-create new solutions
Stride licensed its SmartKYC Altizon’s Datonis IIoT suite is a key Maersk is leveraging an inspection
Unity Technologies’ Centre of application that has automated a component of Wipro’s growth technology developed with Zasti for
Excellence helps gaming start-ups client onboarding process for strategy in the industrial and energy domain specific use case in
ideate, build and test new products. Societe Générale in Europe sector containers.
GE Healthcare’s Edison X Platform Neewee’s procuSense, enhances Cisco and ZestIoT have jointly Playment has worked on multiple
allows healthcare start-ups to certainty to manufacturing supply closed on an agreement with a pilots supported by Bosch and was
develop, deploy, manage, secure chain and procurement operations at leading Indian Airport to smoothen able to achieve 99% accuracy on
and distribute new solutions. Airbus using AI/ML their operations their computer vision models
Source: Zinnov CoNXT Research & Analysis Illustrative / Not Exhaustive 90

Willingness to leverage multiple collaboration models and consistent
market pressures are expected to sustain the trend
Relatively low Corporate Engagement Compared to other Ecosystems
Participation of Global and Indian Fortune 500 corporates in the Indian start-up ecosystem is lower than other ecosystems.
While the gap is reducing there is a sufficient headroom for corporates already engaging with start-ups globally to become
active in India as well.
Continuously increasing market pressures for corporates
Public markets continue to demand growth. The pressure is not expected to reduce anytime soon. Corporates, in need to
protect existing turfs and identify new growth opportunities have to look at start-up ecosystem for solutions. With
increasing number of success stories it is expected that corporate participation will continue to intensify.
Increasing willingness to leverage multiple collaboration models
Corporates are increasingly engaging with start-ups beyond acquisitions and investments. They are entering into
exchange and strategic partnerships with start-ups to find solutions and drive innovation, while helping them with various
corporate specific resources. This willingness to execute open innovation initiatives is expected to create more revenue
and growth opportunities for everyone.
Ecosystem Arbitrage
Indian start-up ecosystem is more frugal compared to other geographies. This coupled with relatively lower valuations is
becoming a attractive proposition for global investors to expand into new sectors / use-cases; and into newer
geographies.
91
Start-up
ecosystem is
expected to grow
rapidly
Outlook 2025 for the Indian start-up ecosystem
20141 20196 20252
# of Unicorns5 05 24 95-105
Cumulative $ 10-20 Bn $ 95-101Bn $ 350-390 Bn

Valuation3
# of Direct Jobs3 80-85k 390-430k 1100-1250k
# of Indirect Jobs4 240-300k 1400- 1600k 3900- 4400k
Note: (1) Analysis of companies founded between 2009-14. Estimated numbers as on Dec 2014. Includes Flipkart in Unicorns. (2) Analysis of companies founded between
2009-25 (3) Calculated based on analysis of all funded and 500 unfunded start-ups. Valuation Est. is based on data model (4) Calculated based on DPIIT model with adjustment 93
for outliers witnessing strong growth (5) For Unicorns, start-ups founded in or after 2000 are considered. (6). Analysis of companies founded between 2009-19
Proactive measures
would allow us to
accelerate, and de-
risk, the growth
Recommendations to enable revenue generation
Provide structures institution support for early stage start-ups to tap into global markets
Challenge:
• India is emerging as a hub for start-ups building B2B and B2B2C solutions with Software-as-a-Service business model
• Overseas markets provide a better premium for the services however due to limited availability of funds it is difficult for start-ups
to aggressively tap into these markets
Illustrative Examples:
• JETRO, Japan’s premier investment agency, operates Global Acceleration Hub in 12 countries to provide a launchpad for Japanese
start-ups to tap into overseas markets including India, Europe, and North America
• Austrade, has built Launching Pads in five countries for Australian start-ups to generate cross-border revenue
Easy procurement norms of Public Procurement for Start-ups along with spend targets
Challenge:
• While the current policy provides an equal platform to start-ups across sectors vis-à-vis the experienced entrepreneurs/companies
in public procurement, the process is long drawn and cumbersome
• For a start-up, pace of growth is the most critical metric and time – long cycles discourage participation
• Govt. of UK is working towards building a ‘single market’ for procurement from start-ups across all Government and public bodies.
G-Cloud is a catalogue service that enables government buyers to purchase cloud-based IT services
• City government of Philadelphia has set-up FastFWD program for buying solutions from start-ups
• City government of Barcelona has taken a use case based challenge approach to fast track procurement from start-ups
95
Recommendation to increase seed stage investments
Create seed stage co-investment fund for angel groups
Challenge:
• Angel investors are a critical part of ecosystem flywheel for they provide risk-capital, experience and expertise at very early stage
founders. Current structure of Fund of Funds, while valuable, is heavily titled towards institutional investors. To encourage
participation of individual investors it is important take innovative measures beyond tax concessions.
• UK’s Angel CoFund was set-up with GBP 100Mn corpus was set-up in 2011 to specifically invest alongside angel investors.
Followed by London Co-investment Fund in early 2015 with a corpus of GBP 25Mn.
• Govt. of the Hong Kong SAR’s Innovation and Technology Venture Fund with a corpus of $2Bn is working with 6 approved venture
capital funds designated as “Co-Investment Partner” to reduce deployment time and cost
Bring focus on capability over capacity in accelerators and incubators
Challenge:
• India has 335+ active accelerators and incubators with capacity to support 5000+ start-ups annually
• Numbers are set to expand to 450+ by 2025 with policy support from Central and State Government agencies
• However, till date, no unicorn emerged from these programs and neither have they resulted in a major M&A or IPO
• Govt. of Israel provides additional funding support to accelerators and incubators after a competitive bidding process with
proposal being measured on output metrics (like exits, follow-on funding, export revenue enabled) than input metrics (like number
of events)
96
Recommendations to increase corporate participation
Expand CSR guidelines to increase capital availability and pace of deployment
Challenge:
• Current guidelines allow deployment of CSR funds only to technology and business incubators in an public institution.
• However, high majority of these programs have either no or poor success metrics. At the same time, private / industry backed
programs have to spend more time on fund raising than on nurturing start-ups.
• Govt. of UK, Seed Enterprise Investment Scheme (SEIS) provides tax relief by allowing 50% of invested amount against income tax
liabilities
• Govt. of Australia, allows investors a 20% non-refundable carry-forward tax offset for investments into start-ups
Encourage set-up of corporate innovation labs
Challenge:
• As an ecosystem, India is still viewed as a nascent ecosystem compared to Israel, US, and China; in some cases Europe
• Simultaneously, the ecosystem would not grow at high velocity if the corporate participation is low
• Corporate participation is needed to create revenue and exit opportunities for start-ups
• Innovation Labs Program, under Israel Innovation Authority (IIA), encourages open innovation by providing financial and non-
financial support to corporates to build business aligned programs
• IIA provides direct funding support to start-ups; but doesn’t require the entrepreneur to establish a company until and unless they
require funding support (allows internal teams to participate)
97
Recommendations to strengthen support ecosystem
Build industry-specific world-class innovation clusters
Challenge:
• Israel is known as a cybersecurity hub, United Kingdom like Singapore is emerging as financial services hub-these hubs are
attracting start-ups, corporates, investors and ecosystem enablers from all over the world to set-up their presence
• India, in spite of its market size and talent, is not known as a specialist for any industry
• Beyond providing schemes similar to Start-up India, the Govt. of Singapore has taken firm policy measures through its institutions
like Monetary Authority of Singapore to build favorable policy environment for financial services start-ups
• Govt. of Canada is investing up to $950M to support business-led Innovation Superclusters in Protein, Digital Technology,
Advanced Manufacturing, and Ocean industries
Build industry-specific physical and digital sandboxes
Challenge:
• In critical and regulated industries like transportation, financial services, healthcare, smart cities – it is critical for a start-up to have
access to right building blocks and controlled environment to rapidly deploy, test and iterate solutions
• These controlled environments, in form of digital data sandbox or physical smart cities sandbox, are needed for India to attract
smartest entrepreneurs to solve large, underserved and core challenges
• In 2014, Singapore set-up Smart Nation Program Office to drive policy change and technology adoption for variety of challenges
faced by the city nation. Cornerstone of Singapore’s success as a smart city is in its ability to create digital, policy and physical
sandboxes to test new technologies in real-world conditions
98
Note for Reader
Methodology
This report has been co-developed by NASSCOM and ZINNOV MANAGEMENT CONSULTING through a comprehensive three-month study to understand
the Technology Product & Digital Start-up Landscape in India.
This report analyses the following –

• Current scenario and emerging trends that define the Indian start-up ecosystem
• India’s position as a global start-up hub that is becoming attractive for investors, start-ups & corporates
• Role played by Ecosystem enablers like Incubators/Accelerators, Govt. policies in nurturing the start-up ecosystem
Data Aggregation Interviews / Discussions RESEARCH TEAM
Zinnov Data
15+ Interviews with industry
experts
NASSCOM Data
• Sangeeta Gupta • Sudhir Gupta
Secondary Research • Achyuta Ghosh • Aman Saraswat
• Ashish Gupta • Gautham K
• Start-up Indiahub • Rahul Mahto
• Quartz • Times of India
• Crunchbase
• Financial Express • Economic Times • Atit Danak
• LinkedIn
• Forbes • Medium
• Techcrunch
• Business Standard • Factor Daily
• Inc42
• Livemint • Yourstory
• Business Today
100
Definition of a start-up
START-UP – An entity working towards innovation, development, deployment, and commercialisation of new products,
processes, or services driven by technology or intellectual property
01 02 03 04
Age: 5 YEARS Origin: INDIA Differentiator: Innovation Stage: PROTOTYPE +
Active technology product / platform Founders of Indian origin, with HQ or Innovation in technology, business The start-up must have at least a
companies incepted in the last 5 core product development in India process or business model being prototype or MVP; Idea stage start-
years (in 2014 or later) executed at speed ups not considered
Note: This report is based on analysis for companies founded between 2014-19, calendar year 2019 (Jan-Aug), calendar year 2018 (Jan-Aug), until and unless specified
101
otherwise.
Definition of Industry Verticals
B2B Enterprise Product companies targeting Horizontal solutions for

Enables financial services, banking and insurance through technology
Large Enterprises / SMBs
E.g. Online Banks, Financial Management Apps, Payment
Enterprise E.g. Data Analytics/AI/ML Platforms, Development Platforms, Fintech Management Platforms, Crowdfunding Platforms, Lending
Productivity Applications, Customer Services, Big
Marketplace, Money Transfer Platform, Expense Management, etc.
Data/Cloud/Security Infrastructure, etc.
Provides technology platform for solving Healthtech problems Provides learning solutions & services through technology
E.g. Medical Solutions, Marketplace for Health Services, Health Lab E.g. Learning Apps, Test Preparation Tech, Education Advisory
Healthtech EdTech Platform,
Aggregators, Online Pharmacies, E-Diagnostics, Ambulance
Aggregator, etc. K-12/Higher education platforms, Language Learning Platforms etc.
Tech-enabled companies supporting Human Resources Activities Tech companies engaged in supporting the travel and hospitality
Human E.g. Applicant Tracking systems, HR Management System, Candidate Travel & industry
Resource Assistance & Sourcing, Corporate Training, Recruitment Marketplaces Hospitality E.g. Hotel Booking Services, Travel Planning, Travel Packages Portal,
etc. Travel Collaboration Community, etc.
Companies involved in production, manufacturing, sales and services Tech-enabled companies providing simplified Transportation services
of motorised vehicles to users
Automotive E.g. Electronic Engineering, System Integration, Automotive
Mobility E.g. Car pooling, Self Drive Rentals, Two-wheeler taxi aggregators,
Maintenance, Electric Vehicles, Automotive marketplaces, etc. Mass Transit, Tech Enablers.
Tech-enabled companies supporting Real Estate, Property Companies enabling Sales of goods and product online or Integration
Real Estate & Management & Construction industry Retail & of tech in offline markets
Construction E.g. Construction design tools, Building Technology, Real Estate Retailtech E.g. Products/Services cutting across several verticals - Fashion &
Management, Security, Smart Home & cities enablers. Lifestyle, Grocery & Home essentials, Home Services, Coupons, etc.
102
B2B Enterprise Product companies targeting Horizontal solutions for

Enables financial services, banking and insurance through technology
Large Enterprises / SMBs
E.g. Online Banks, Financial Management Apps, Payment
Enterprise E.g. Data Analytics/AI/ML Platforms, Development Platforms, Fintech Management Platforms, Crowdfunding Platforms, Lending
Productivity Applications, Customer Services, Big
Marketplace, Money Transfer Platform, Expense Management, etc.
Data/Cloud/Security Infrastructure, etc.
Provides technology platform for solving Healthtech problems Provides learning solutions & services through technology
E.g. Medical Solutions, Marketplace for Health Services, Health Lab E.g. Learning Apps, Test Preparation Tech, Education Advisory
Healthtech EdTech Platform,
Aggregators, Online Pharmacies, E-Diagnostics, Ambulance
Aggregator, etc. K-12/Higher education platforms, Language Learning Platforms etc.
Tech-enabled companies supporting Human Resources Activities Tech companies engaged in supporting the travel and hospitality
Human E.g. Applicant Tracking systems, HR Management System, Candidate Travel & industry
Resource Assistance & Sourcing, Corporate Training, Recruitment Marketplaces Hospitality E.g. Hotel Booking Services, Travel Planning, Travel Packages Portal,
etc. Travel Collaboration Community, etc.
Companies involved in production, manufacturing, sales and services Tech-enabled companies providing simplified Transportation services
of motorised vehicles to users
Automotive E.g. Electronic Engineering, System Integration, Automotive
Mobility E.g. Car pooling, Self Drive Rentals, Two-wheeler taxi aggregators,
Maintenance, Electric Vehicles, Automotive marketplaces, etc. Mass Transit, Tech Enablers.
Tech-enabled companies supporting Real Estate, Property Companies enabling Sales of goods and product online or Integration
Real Estate & Management & Construction industry Retail & of tech in offline markets
Construction E.g. Construction design tools, Building Technology, Real Estate Retailtech E.g. Products/Services cutting across several verticals - Fashion &
Management, Security, Smart Home & cities enablers. Lifestyle, Grocery & Home essentials, Home Services, Coupons, etc.
103
Engaged in manufacturing of tech-enabled devices or machines;

Tech-enabled companies supporting the Food & Food-tech industry
Industrial & Construction/Mining sector, etc. Food &
E.g. Online Food Ordering, Restaurant Management Cloud Solutions,
Manufacturing E.g. IoT based Predictive Maintenance of Machines, 3D Printing Foodtech Food Discovery Platform
(Manufacturing)
Provides content for entertainment across the web and mobile Enabling tech in logistics services and supply chain management
Media & medium SCM & E.g. Logistics and Distribution Platform, Fleet Management,
Entertainment E.g. News & Media Apps, Live Streaming Apps, News Platforms, OTT Logistics Warehousing, IoT Platform for Logistics, IoT Platform for Goods
Content, Video Intelligence Apps, etc. Transportation Marketplace, etc.
Start-ups engaged in tech enablement in the Agricultural Industry Tech Innovation and facilitation in the Gaming Industry
Agritech E.g. Field Surveillance, Precision Agritech, Farm infrastructure, Soil Gaming E.g. AR/VR Gaming, Community platform Games, Fantasy Gaming
Testing, Farm Input E-Commerce etc Platforms etc.
Tech-based companies supporting the Defence and Aviation Industry Tech-based companies for Legal help to Individuals/Corporates
Aerospace &
E.g. Military Drones, Green Propulsion Systems developers, Sensors Legal Tech E.g. Contract Management, Brand Protection and Anti Counterfeit,
Defense and Platforms for security applications etc. Legal Services Discovery/Booking marketplaces, etc.
Tech Enablement for Natural Resource Management and Utilisation Provides direct advertising and marketing assistance through
Energy & Advertising &
E.g. Renewable Energy products, Recycling of Resources, Energy technology
Utilities Production and Distribution, EV charging Infrastructure etc. Marketing E.g. Content marketing, influential marketing, Push notifications etc.
104
Other Definitions
Industry Sector Maturity
Mature Sectors Sectors with a large unfunded and funded start-up base with high adoption of deep-tech and investor activity.
Emerging Sectors Sectors with a medium unfunded and funded start-up base with relatively low-to-high adoption of deep-tech and medium-to-high investor activity.
Nascent Sectors Sectors with a small start-up base and hence relatively lower investor activity.
Start-up Hubs Funding Stages
Funding stage where a start-up raises an amount less than equal

Seed Stage Nascent Hubs Start-ups Locations with less than 20 funded start-ups
to $7Mn as reported by media.
Funding stage where a start-up raises an amount between $7Mn

Early Stage Emerging Hubs Start-up Locations with more than 20 funded start-ups
to $30Mn as reported by media.
Funding stage where a start-up raises an amount greater than

Late Stage
$30Mn as reported by media.
105

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Indian Tech

NOTE FOR READER 99

7 # of Unicorns3 added in 2019; total 24 unicorns are active in India

$ 4.4 Bn Total funding received by Start-ups1 in 2019 (Jan-Sep)

390+ Active institutional investors5; up from 310+ in 2018

335+ Active incubators and accelerators; up from 320+ in 2018

Growth of new start-up hubs Built in India. Branded Global

Increasing depth and breadth in sectors Strengthening pipeline of potential unicorns

Diffusion of deep-tech 2nd Innings

Building on India’s unique digital infrastructure Evolving Investor Landscape

Serving the underserved Intensifying corporate participation

20191 Recommendations 20252

To enable revenue generation

• Provide institution support to tap into global markets

To increase corporate participation

Cumulative Valuation3 $ 95-101 Bn • Expand CSR guidelines to increase capital availability

To strengthen support ecosystem

China2 USA2 India U. K1 Germany1 Israel2

Number of Unicorns3 206 203 24 21 11 7

Avg. Time to Unicorn 4-6 6-8 6-8 7-9 6-8 5-7

Avg. Valuation per ~3.8 ~3.5 ~3.2 ~2.4 ~2.0 ~1.3

Unicorns added in 2019

24 Unicorns 07 Location: Pune

Source: Zinnov CoNXT Research and Analysis 12

1300+ Number of start-ups added in 20191

43% Share of B2B start-ups

21% Share of start-ups with primary market overseas

2000+ Number of funded start-ups founded between 2014-19

2012 2013 2014 2015 2016 2017 2018 2019

Year of Inception 5 Number of Unicorns founded in 2014 or later

Share of Unicorns founded in

Share of start-ups at Series

Share of angel or seed

EdTech Fintech Mobility

Retail & Retail tech Emerging Sectors

Sectors with a medium unfunded and

Agritech Nascent Sectors

Industrial & Sectors with a small start-up base with

Low Maturity Index High

Artificial Intelligence 65 – 67%

• Deep-tech start-up pool has grown at 40% CAGR since 2014

Others include Robotics, 3D Printing, Virtualization, Cybersecurity etc. 17

Global Acquisitions by Indian companies

M&A Deals Acquirer Category Reason for Acquisition

41% Building Tech Capabilities

23% Product Portfolio Expansion

18% Market Expansion

Total and Stage-wise Investment in $ Million

1 on-year in 2019 (Jan to Aug)

Seed Early Late Total

Built in India. Branded Global 6 1 Growth of new start-up hubs

Strengthening pipeline of Increasing depth and breadth

2nd Innings 8 3 Diffusion of deep-tech

Building on India’s unique

hubs There is a steady rise in total number of start-ups

With strengthening policy support, expansion of

Share of start-ups by Illustrative Examples

Ahmedabad Jaipur Kolkata Kochi

% share of funded start-ups