The startup ecosystem saw huge investments flowing in especially in the years 2021 & 2022 in various startups like healthcare, and FinTech. In 2021 the Indian startup ecosystem raised $42 billion and saw a rise of 42 Unicorns to $32.8 billion. However, at the beginning of 2022 startups were at a loss and layoffs started to happen, and the funding was reduced drastically. Issues related to startups in India have been on the rise. A good number of startups have shut down as fast as they opened. On asking a few CEOs, they stated that the major reason for layoffs is because there’s pressure from investors on profitability, and efforts to cut down cash burns, startups nowadays also lack innovation.
From the year 2022, there were over 5000 employees who lost their jobs and over 11000 employees were fired in recent times. Startups definitely do not have an easy journey, from launching to investing to making a customer base many reasons could be narrowed to their failures lack of innovation, not the right business model, legal issues, and investment/funding. An estimation says that about 90% of startups will fail in their early stages.
To tackle the issues in the startup ecosystem an initiative was taken to connect startups in India with US-based startups with wider assistance including financing, marketing, commercialization and mentorship. Piyush Goyal Commerce and Industry Minister has launched SETU (Supporting Entrepreneurs in Transformation and Upskilling) which will help both Indian and US-based startups to connect. During an interaction about the downfall of startups in India, a programme called SETU was launched encouraging in-house mentorship for startups at early stages by members in Bay Area San Francisco. An initiative supported by the stakeholders called MAARG (mentorship, advisory, assistance, resilience and growth) will be a one-stop solution finder for startups in India.
