India can expect $600 billion in investments for startups over next 3 years, say experts

Startups

India's startup ecosystem can expect $600 billion in alternative investments over the next three years, experts have noted. While speaking at the launch of Centre for Financial Markets (CFM) by IMT in Mumbai last week, they noted that this capital boost is expected to enhance innovation, support entrepreneurship and create a better environment for new ventures to thrive.

Atish Chattopadhyay, Director of IMT Ghaziabad said that estimates indicate over $600 billion in private equity and venture capital (PE/VC) investments over the next three years for the startup ecosystem, which is poised for significant rise.

Chattopadhyay further said that this represents nearly 13 percent of the estimated $4.7 trillion (including government investments, corporate retention, PE/VC funding, corporate debt, IPOs and other sources) required to achieve a $5 trillion economy by financial year 2027.

Notably, Indian unicorn startups have seen a strong decline in the stakes held by their founders over the last six years. This comes amid a challenging funding environment.

The median stake that founder groups hold in their unicorn startups has gradually fallen over the last six years to just 13 percent in 2024, down from 24.6 percent in 2018, according to data from Tracxn.

This includes data collected from India's 102 unicorn startups that are valued at or more than $1 billion.

This comes at a time when several founders of prominent startups have been resigning from their posts, be it due to market pressures, sectoral challenges, or to start new ventures.

"In a challenging funding environment, if the choice is between taking a little bit of a knock on ownership to raise fresh capital or letting the business shut down, most founders would choose the former," said Sandeep Murthy, Managing Partner at early-stage venture capital firm Lightbox.

(With inputs from PTI)