India’s tech startup landscape underwent a dramatic change after the Covid-19 pandemic, the Economic Survey revealed. This and more in today’s ETtech Top 5.
Also in this letter:
■ Apple’s India PC play
■ Bluelearn shuts shop
■ Adda247’s Esop buyback
Nirmala Sitharaman, union finance minister
Fuelled by consumer and enterprise demand for technology-backed solutions following the Covid-19 pandemic, the number of technology startups in India increased to approximately 31,000 in 2023, the Economic Survey 2023-24 showed.
Tell me more: According to the survey, startups recognised by the government – more than 1.17 lakh as of December 2023 – have created over 12.42 lakh direct jobs in the country.
“Several factors have contributed to the rise of start-ups in various sectors. Changes in consumption patterns and increased internet penetration paved the way for retail tech startups,” the survey said.
Regional growth: The survey highlighted that more than 45% of recognised startups were emerging out of tier-II and tier-III cities. Further, over 47% of such young ventures had at least one woman director. Startups filed more than 12,000 patent applications from 2016 until March 2024, it said.
ET had reported exclusively last month that the central government is expected to fulfil its plan of having at least one registered startup in each of the country’s 785 districts within a year as only 20-25 districts remain without any registered startup.
Challenges: While the ecommerce sector is expected to touch $350 billion in size by 2030, data privacy and online fraud remain significant hurdles, according to the survey. Addressing these issues through education and improved infrastructure will be crucial for sustained growth.
The government wants to promote a data-based lending mechanism in the medium term to cater to the financial requirements of small businesses and spur growth, said the Economic Survey for 2023-24.
Tell me more: Highlighting the role played by government-promoted open platforms and fintech players in the country’s progress, the survey said India is the third largest fintech market in the world.
“The next big step in the coming years is likely to be towards artificial intelligence/machine learning (AI/ML), decentralised finance, Internet of Things (IoT), etc., which have a vast potential to disrupt the digital payments ecosystem,” it said.
Fintech revolution: The government wants India to be at the forefront of the fintech revolution in the world, and platforms such as Aadhaar, eKYC, AePS (Aadhaar Enabled Payment Systems), BharatQR and DigiLocker have helped in timely delivery of financial services to the people, it added.
Made in India iPhones: US smartphone major Apple assembled 14% of global iPhones in India in FY24 and the country’s ranking in global electronics export improved by four positions, as per the survey.
After securing a strong foothold in the competitive smartphone market, Apple is poised for an aggressive play in the personal computer (PC) space.
Strong sales expectation: Sales of Mac PCs are expected to grow more than 14% in 2024, rebounding from a decline last year, thanks to their growing acceptance in enterprise and educational segments, despite the premium pricing of about 1 lakh per device, experts said.
Apple’s share in India’s PC market has remained largely unchanged at 4-6% for the past 3-4 years, a figure which is likely to rise to at least 7% by December-end, analysts said.
The sales increase may help Apple clock $1.1-1.2 billion in revenue from Mac PCs in India this calendar year, a sharp rise from $600-700 million last year, they added.
IT outage impact: Analysts believe the recent glitch with Microsoft Windows-powered computers is also expected to lead many enterprises to diversify their IT systems with Apple PCs despite the high cost involved.
“The IT infrastructure collapse this week due to Crowdstrike, affecting Microsoft Windows systems could be something which could work out well for Apple Mac’s adoption in enterprise from an IT diversification point of view,” said Neil Shah, vice president of Counterpoint Research.
Growth potential: According to experts, Apple is likely to target big enterprises for its PCs. The company wants to get into Fortune 500 companies which are currently dominated by HP, Dell and Lenovo to become a strong player in the enterprise segment.
The iPhone maker recently launched an India-specific ad campaign for its Mac PCs, indicating the focus and strong growth potential.
BlueLearn founders: Harish Uthayakumar (left) and Shreyans Sancheti
Upskilling and job finding platform Bluelearn has shut down operations and will return 70% of the capital it raised to its investors.
What went wrong: “We realised that building a venture-scale business with Bluelearn was tough. We had been very conservative with capital, allowing us to return 70% of the capital we raised back to investors,” cofounder Harish Uthayakumar wrote on X, adding that “Bluelearn was an impactful chapter, but it is time to move on to our next one.”
The edtech company had raised $4 million in funding from venture capital firms like 100x VC, Titan Capital, Elevation Capital, and Lightspeed along with angel investors like Meesho founders Vidit Aatrey and Sanjeev Barnwal, Pixxel founder Awais Ahmed, among others.
Growing list: Over a dozen Indian edtech startups have been acquired in the past year with some even shutting down, underscoring a challenging funding scenario for smaller firms.
Anil Nagar, founder, Adda247
Google-backed edtech startup Adda247 on Monday announced its first-ever employee stock ownership plan (Esop) buyback for 130 employees across various roles and functions.
Pricing and more: The edtech firm, which plans to go public in 2026, priced the buyback at 40 times the average of its initial purchase price.
“This Esop buyback represents a pivotal moment in Adda247’s evolution…Our employees are the strength of Adda247, and this initiative demonstrates our appreciation for their dedication and hard work and the wealth they can create,” said Anil Nagar, founder and chief executive, Adda247.
FY24 scorecard: The edtech firm recorded revenue of Rs 243.39 crore in FY24, an 88% increase on year. It has also reduced net loss by 66% to Rs 101 crore, down from Rs 296 crore in FY23. The company has about one million paid users and aims to reach 1.7 million paid users by the end of this year.
Adda247 recently acquired Ekagrata Eduserv, a chartered accountancy (CA) test preparation firm, marking its entry into the CA test preparation market.
Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai and Riya Roy Chowdhury in Bengaluru.