Despite the looming global recession, the early-stage startup funding momentum in India in 2023 will continue to accelerate amid an increased investor database of micro-VC funds, family offices, and angels.
“The volatility in markets does impact the next round funding opportunities and investor sentiments, but in India, the customer purchase intent is not plagued in any manner and business remains insulated,” said Sanjay Mehta, Founder and Partner, 100X.VC.
According to the report ‘Startup Sectors Outlook Report 2023’ by 100X.VC,
“The volatility in markets does impact the next round funding opportunities and investor sentiments, but in India, the customer purchase intent is not plagued in any manner and business remains insulated.”
Due to layoffs at some large corporations, well-funded startups now have access to a new pool of brilliant people during the global economic slowdown. The report stated that startups born in 2023 will have a more cash-conservative attitude and will be focused on revenue and growth.
The report outlined in-depth insights into the current trend in industries such as quick-service restaurants (QSR), direct-to-consumer (D2C), electric vehicle market, and infrastructure.
The report stated that there is still significant opportunity for startups to succeed in the highly competitive enterprise software market.
“Startups can differentiate themselves by offering innovative solutions that address unique needs or problems within the market, such as logistics, analytics, and collaboration,” it states.
The enterprise software market is being shaped by trends including cloud-based delivery, artificial intelligence and machine learning, mobile and web-based applications, the Internet of Things, collaboration and social media, and cybersecurity.
Startups can focus on improving efficiency and productivity, reducing costs, improving customer interactions, and managing and making sense of data to meet the needs of businesses seeking digital transformation.
The QSR industry in India is experiencing rapid growth, driven by young working populations with a desire for local and international cuisine at affordable prices. Cloud kitchens, also known as ghost kitchens, virtual kitchens, and dark kitchens, are a fast-growing segment of the QSR industry in India and are seen as a more efficient way to run a restaurant.
The QSR sector in India has a large untapped potential and is viewed as a low-risk, scalable, and profitable business.
The growing ecommerce market in India, with its large and young population and increasing disposable incomes, presents a significant opportunity for D2C brands. India’s e-commerce industry is expected to reach $200 billion in size by 2026.
D2C brands in India often prioritize customer service and have a strong brand identity to build a loyal customer base. The success of D2C startups often depends on their ability to identify a specific problem, offer high-quality products that solve the problem, and effectively market and sell their products.
Low code—no code
No-code programming tools are growing in popularity as they enable developers or in-house employees to innovate and develop software products quickly and refine them as they are introduced to the market.
In 2023, it is expected that as much as 65% of the development will be done in-house using no-code and low-code tools, and AI software bots due to the increased demand for personalised tech applications and the growth of the hybrid or borderless workforce. Companies are investing heavily in low-code production, and it is predicted that nearly 60% of all apps will be built outside of the IT department.
EV market and infrastructure
The electric vehicle (EV) market for startups is a growing space as more companies look to produce EVs and related technologies. Startups are working on various technologies in the EV market, including advanced battery technologies, charging infrastructure, EV components, and self-driving technology.
The EV market in India is expected to create 10 million direct jobs by 2030 and 50 million indirect jobs in the sector.
The government has introduced initiatives to support the manufacturing and adoption of EVs in the country, such as tax exemptions and reduced customs duties on EV components. However, the mass adoption of EVs in India will also require the expansion of infrastructure, including charging stations, and vehicles with a longer range.
Future of work–HRTech
The future of work is expected to be significantly impacted by technology, particularly artificial intelligence (AI) and automation. Many experts predict that some jobs will be replaced by machines, while others believe that technology will create new, more complex jobs requiring higher skill levels and education.
Startups are developing various technologies to improve various aspects of the future of work and HRTech, including time tracking and productivity tools, talent management platforms, HR process automation, workplace communication and collaboration tools, career development and training platforms, mental wellbeing, and tools for the hiring and interview process. The use of AI in the hiring process is still in its early stages and is expected to continue evolving.
In India, the adoption of agritech solutions is expected to increase, with government support and investment in agritech startups. Financial institutions can provide risk management tools and financing options to support the adoption of new technologies and farming methods. According to the report, the future of agritech in India looks bright as technology continues to transform the agriculture sector.
Security, compliance and privacy
The security, compliance and privacy market for startups is an exciting and rapidly-growing field, with opportunities for innovative companies to make a significant impact. Threats such as malware, ransomware, phishing, and denial of service attacks are constant concerns in the field of cybersecurity, and it is important for individuals and organizations to be aware of these threats and take steps to protect themselves.
The fintech business in India has been growing rapidly in recent years, with many fintech startups disrupting traditional financial services and gaining significant market share. The Reserve Bank of India (RBI) has taken several steps to promote the growth of fintech in the country, including establishing a regulatory sandbox, issuing guidelines for digital lending, setting up a fintech unit, collaborating with other regulators, and engaging with fintech stakeholders.
Key trends in the future of fintech in India include continued growth, increased regulatory oversight, increased collaboration between traditional financial institutions and fintech startups, and greater use of technology such as artificial intelligence, blockchain, and biometrics.
Edited by Kanishk Singh