India implement to secure the leading position in the startup realm. Amitabh Kant provides valuable insights.

India’s G20 Sherpa and former CEO of Nitti Aayog shared his insights on India's journey towards becoming the top nation for startups during his keynote address at the inaugural 'Startup Mahakumbh' event in New Delhi.

Over the past eight years, India has undergone a remarkable transformation, evolving from having just 300 startups to boasting the third-largest startup ecosystem globally, with over 112,000 startups, as highlighted by G20 Sherpa and former Nitti Aayog CEO Amitabh Kant during the opening address at the 'Startup Mahakumbh' held in New Delhi from March 18 to March 20.

Detailing the growth trajectory of the startup ecosystem, he noted the emergence of over 115 unicorns, collectively valued at over $350 billion. Furthermore, there has been a significant twentyfold increase in total funding and nearly a twelvefold increase in the number of investors.

However, Kant underscored the next significant challenge: positioning India as the premier destination for startups worldwide. Here are the five critical factors, according to Kant, that will facilitate India's ascent to that position:

 While many startups have thrived, several, including Byju’s, Ailing, BharatPe, Housing.com, and Trill, have encountered setbacks. Kant stressed the importance of corporate governance in startups, highlighting the need for proper financial management, audits, and self-regulation to foster innovation. He cautioned that the government and regulators would intervene if a lax approach to governance persists, potentially stifling innovation.

 Ensuring orderly exits for venture capital (VC) is vital. VCs play a crucial role in fuelling startup growth, but their primary objective is to generate returns on their investments. Kant emphasized the need for startups to adhere to a self-regulatory ecosystem with transparent governance frameworks, facilitating transparency, investments, and ethical behaviour, thereby enhancing their ability to raise funds.

 Prioritizing sustainable growth over the pursuit of lofty targets aimed at quick investor exits is essential. Kant cautioned against prioritizing growth and valuations at any cost, which may compromise governance standards. He urged startups to focus on sustainable growth rather than seeking headline-grabbing valuations.

Startups are no longer solely about self-centred promoters. Kant advocated for a diverse pool of mentors for guidance and support, as well as the establishment of professional boards to ensure proper checks and balances within organizations.

 A significant 75% of total funding in the startup ecosystem comes from foreign sources, Kant noted. He urged domestic entities, including life insurance companies, pension funds, family offices, and high-net-worth individuals, to participate in India's startup growth story. Their involvement, he suggested, would contribute to value creation and mitigate risks associated with funding downturns.