India now has nearly 27K active tech startups, adding 1,300 last year

New Delhi, (IANS) According to a Nasscom report released on Wednesday, India added more than 1,300 active digital companies in the last year, taking the country’s total to 25,000–27,000.

(After the USA and China), India remains the world’s 3rd largest tech startup ecosystem globally.

With more than 23 added in CY2022, the nation added the second-highest number of unicorns in the world.

According to a report by the National Association of Software and Services Companies (Nasscom), in partnership with Zinnov, the potential pipeline of unicorns increased simultaneously to over 170, expanding at a pace similar to 2021.

According to Debjani Ghosh, President of Nasscom, “despite the current downturns, opportunities abound for innovative organizations that are harnessing emerging technology to produce measurable impact while prioritizing business fundamentals above development.”

Despite the challenges, annual investments were higher than pre-pandemic levels of $13.1 billion in 2019 at $18.2 billion, even though total funding in CY2022 decreased by 24 percent over 2021.

Additionally, the year saw a substantial investment focus on niche firms and non-unicorns.

In 2022, about 1,400 different businesses got investment, an increase of 18% over 2021. According to the research, 47 percent of these firms raised their first round in 2022.

Early-stage investments increased by 25–35% over 2021 ($5.9 billion in CY2022) and seed-stage investments ($1.2 billion).

1,018 investments were made in seed-stage IT startups in 2022.

Due to the significant correction in the global public markets, late-stage investments took the worst hit, with a loss of 41% in deal sizes higher than $100 million.

“What is remarkable is the ecosystem’s maturity, where founders are intentionally prioritizing profitability over valuation and investor trust, despite macroeconomic variables at play. This will pave the way for growth in 2023 and beyond,” said Pari Natarajan, CEO of Zinnov.

According to the report, tech startups are expected to keep increasing innovation and deep-tech adoption, particularly in sectors related to the SDGs that require complex solutions.