As we bid adieu to 2019 and welcomed 2020, let us take a look back at what has been another action-packed year in the start-up ecosystem. While the years 2016 and 2017 were fairly slow for those associated with start-ups in India, 2019 continued the upward trend of the previous year, with the ecosystem experiencing great numbers over the course of the year. One of the most important numbers of the year was that 7 start-ups from India made it to the unicorn stage, taking the number of unicorn start-ups in the country to 33.

Experts suggest that this number can nearly double within the first few months of 2020, with close to 35 start-ups expected to turn unicorn soon. What was the most refreshing to see was how tier II and III cities contributed to the growth of the start-up ecosystem in a big way. Close to $12 billion was raised in funding by start-ups in India, with tier II and III start-ups accounting for $365 million of the funds raised.

Prime Minister Narendra Modi’s grand ambition for the country is to reach a GDP goal of $5 trillion by 2025. It is clear that the start-up economy will pave the way to India becoming an economic superpower and recent trends suggest that start-ups being launched and nurtured in tier II and III cities will play a pivotal role in achieving this vision. Founders from these cities proved that proximity to investors, better technology and a higher number of skilled professionals do not necessarily contribute to a start-up’s success. In 2019, we have seen companies like DeHaat raising funding of Rs 20 crore from Trifecta Capital, and Sieve raising investments of an undisclosed amount from Twitter’s Co-Founder, Christopher Isaac “Biz” Stone. Among the most impressive technologies to come out of India II and III, the stand out came from Genrobotic from Thiruvananthapuram. The company made headlines for developing a 50-kg robot to automate the process of manual scavenging. Genrobotic is currently working with Dubai Municipality, Qatar and Sharjah to deploy its robot, Bandicoot.

Job generator

One of the biggest advantages of the start-up ecosystem blossoming in India is the impact it can have on unemployment. This has been a worrisome issue for the country over the last few years, with larger organisations even resorting to layoffs under financial strains. Start-ups in India, on the other hand, managed to generate over 60,000 jobs in 2019 alone, taking the total of start-up jobs in the country to 4,30,000 jobs so far. With experts predicting a rapid growth of several start-ups as the country’s economy further moves away from its dependence on agrarian and industrial sectors to knowledge-based sectors in 2020, one can only expect the employment rates to shoot up further.

While there’s no denying that 2020 will see a rapid rise in new start-ups, multiple funding rounds, and innovation, the fact of the matter is that investors need to identify industries with high-value propositions. For instance, in the 90s, IT ruled the roost, and leveraged new technology to become an industry that boasts of generating over $137 billion in revenue currently. The challenge now lies in identifying similar industries with huge potential and bolstering their growth to foster a stronger economy and more jobs.

So far, consumer tech has proved to be a booming vertical when it comes to innovations, with prominent unicorns like OYO, MakeMyTrip, Swiggy, Byju’s, Flipkart, and others making headlines for disrupting market trends. However, one mustn’t ignore the huge strides that enterprise technology is making, with companies like Udaan, Freshworks and InMobi not just succeeding in India, but also garnering a huge client base all over the world. Artificial intelligence is another booming field and 2020 is sure to see some major investments and technological advancements being made in this sector.

Of course, to foster innovation, we must foster risk-taking. The central government has announced a slew of tax breaks lately, along with lower corporate taxes, in order to encourage more creative problem solvers to take the next step and become entrepreneurs. Policies like Startup India aim to address issues at the entrepreneurial level. NASSCOM reaffirmed that government bodies must take a more active role in fostering the growth of the start-up economy. The body believes that both, the government and corporate sector need to boost innovation amongst start-ups by increasing their own role as stakeholders by offering market access, guidance to seed-stage start-ups and funding. In short, NASSCOM suggests these entities must effectively play the role of venture capitalists.

Steps must also be taken by the government to provide some relaxations in the stringent measures placed in terms of taxations and regulations that ultimately hinder the growth of startups. Angel Tax, the popular term for tax levied on start-ups based on their market value after they have received funding, has been a huge obstacle for most entrepreneurs in India. While there have been provisions made for exemptions under this tax, it still hampers a number of start-ups in the country and needs to be taken a look at soon.

With 2019 presenting a rosy picture for the world of start-ups in India, and favourable projections and expectations being set for 2020, the country is on the verge of achieving some impressive numbers in the start-up space. If the Indian government, the established players in the market, investors and entrepreneurs can together and take progressive steps towards the betterment of the start-up ecosystem, then the year 2020 can be one for explosive growth in multiple industries across the country.

Abhishek Kumar Gupta is Community Head of 'startup Delhi' and CEO of Next Big Brand.