RISING ABOVE

UNCERTAINTY: THE
2022 SAGA OF INDIAN
TECH START-UPS
INDIA TECH START-UP LANDSCAPE REPORT 2022 EDITION
Foreword

Thelast
The last10
10years
years have seen
seen the
theemergence
emergenceofofover
over25,000
25,000 to to
27,000
27,000tech start-ups
tech in India.
start-ups Home
in India. Thetocountry
some ofisthe brightest
home and of
to some the
most
the entrepreneurial
brightest and mosttalent, India has the
entrepreneurial added
talent, advantage
backed ofState
by the beingwhich
backed by a government
recognizes that recognizes
the potential the spaceand acknowledges
holds. A testamentits
topotential. In fact,would
this statement despitebeeconomic concerns
the fact that these that 2022 continue
start-ups witnessed, tothese
bringstart-ups
in steadycontinue
investmentsto bring in steady
despite investments
the ups and downs with
that23
newlyhas
2022 minted
seen,unicorns
and 23 joining
of themthe coveted
have club. to emerge as unicorns in the last year. 2022 also witnessed several other trends
managed
– such as seed stage and early stage start-ups attracting more investments than existing unicorns, continued growth of Deep
ACHYUTA GHOSH 2022start-ups,
teach was a yearandthat tested
a shift the mettlestrategies
in founders’ of Indian which
tech start-ups,
we have owing to market
explored in detailheadwinds,
in the report.a long funding cycle, and reduced
Sr. Director & Head of Insights
NASSCOM valuations. The global public markets experienced a correction – particularly in technology stocks, which saw a significant drop in
valuations.
However, Evenalso
2022 technology
saw the giants
global were
publicaffected.
marketsDespite such achallenges,
experience correction the fortitude showcased
– particularly by entrepreneurs
in technology stocks which andsawthea
investor trust in the ecosystem have been buoying. Interestingly, seed-stage and early-stage start-ups attracted more investments
significant drop in valuations. Even technology companies that were doing well for themselves were affected. These changes
than existing unicorns. The continued growth of DeepTech start-ups also highlighted the entrepreneurs’ shift to a first principles
prompted the tech start-ups to adapt to market shifts, and look at growth, not just survival with a dual focus on customers and
thinking to drive new to India, new to the world solutions.
investors in 2023.
The dynamism of the Indian tech start-up ecosystem is attributable to the deep heterogeneity of the start-ups’ growth stage, and the
Indiversity
this report, we analyze the tech start-up landscape, take a look at the critical sectors such as BFSI, Retail, Enterprise, and
it possesses across generations, genders, locations, and vertical solutions. 39% of tech start-ups founded in 2022 were
SANGEETA GUPTA EdTech, and seelocations
from emerging what theinnumbers
India, andsay
36about existing
unicorns Unicornsunicorns
and potential and potential
have atUnicorns
least onewithin
woman thefounder/co-founder.
country. Furthermore,
Also,we
the
SVP & Chief Strategy Officer
NASSCOM
present a detailed view of actionable recommendations that can help strengthen the ecosystem.
number of serial entrepreneurs has increased manifold, with many of them mentoring and nurturing first-time as well as other
entrepreneurs. Interestingly, more and more start-ups have made the definitive shift in focus from valuation to driving profitability,
We remain
where theyoptimistic about the
build businesses withyear
solidthat is to come,
foundations even
– built towith
last. as market recession and investor sentiments continue remain
concerning. It is anticipated that investments and exits will ramp up throughout the year, although the initial quarter(s) may be
slower
We areasoptimistic
decision makers
about 2023.seek clarity
Even asand a confidence
recession and in the market.
other We hope Zinnov’s
macroeconomic factorsdata
loomand
on analyses will give
the horizon, you insights
we anticipate that
into the Indianand
investments tech start-up
exits ecosystem
will ramp up through thatthe
proves valuable to
year, although theyour business.
initial quarters may be slower as decision makers seek clarity and
confidence in the market. We hope that insights from this report are useful to you and welcome your feedback and comments at
We hope that insights from this report are helpful to you and welcome your feedback and comments at research@nasscom.in.
research@nasscom.in.
PARI NATARAJAN
CEO, Zinnov
TABLE OF
CONTENTS

Executive Summary 04 - 09

2022 in Review 10 - 54
Insights and key data points from ecosystem analysis

Outlook 55 - 58
Our bold call-outs for 2023

Recommendation 59 - 66
For continued growth of the Indian start-up ecosystem

Note for Reader 67-76

Executive Summary
Snapshot of Indian tech start-up ecosystem – world’s third largest

Overall In CY 2022

25,000-27,000 Number of Active tech1 start-ups 1300+

5500+ Number of Unique Funded tech start-ups ~1400

$73Bn Equity investments2 raised 18.2Bn

89 Number of Unicorns3 23

174 Number of Potential Unicorns4 60

1000+ Number of Mergers & Acquisitions2 207

Note: (1) This report only covers start-ups founded in 2012-22 (2) For each calendar Year investment rounds & M&A of start-ups founded in 10-year timeline are taken for Analysis (3) Unicorns are private entities with more than 1Bn valuation, analysis as on date 31-Dec-2022.
Please refer to the note for readers for detailed list of exclusions from the unicorn club (4) Potential unicorns are start-ups founded between 2012-22 and with total funding more than 50Mn+. Does not include start-ups that became unicorn on or before 31-Dec-22
Key trends and positive shifts post-COVID continued to hold strong in 2022

Growth in Seed-stage and Strong Investor Continued Growth of Evolving pool of Unicorns
Early-stage Investments Commitment Deep-Tech Start-ups and Potential Unicorns

With slowdown in late-stage, 66% 18+ industry sectors raised more 12% of all start-ups are leveraging India added the 2nd highest
of investments were raised by investments than 4-year deep-tech to build more complex and number of Unicorns, only
non-unicorns average (2019-2022) and 2019 smart solutions across industries behind US
calendar year
Early-stage and seed-stage At 42%, 10-Year CAGR, deep-tech Simultaneously, potential
investments grew 25-35% over >1.6X increase in unique and start-up pool is growing faster than pipeline expanded to 170+
2021; ~18% increase in number of active venture capital and private the ecosystem pace at pace like 2021
unique start-ups funded equity firms, compared to 2021
More than 2.5X increase in
investments in last 3-years for
DeepTech Start-ups

Shift in Founder Consistent Corporate Thriving Multifaceted

Playbook Participation Ecosystem
30% of Unicorns and Potential 30% higher corporate participation 39% of start-ups incepted in 2022
Unicorns are investing, acquiring or in 2022 as compared to 2021 are based in emerging hubs.
actively collaborating with other
start-ups, similar to 2021 & up from 300+ corporates are actively 2.4X increase in Growth in
22% in 2020 investing, acquiring or partnering investment deals in Emerging Hubs
with start-ups. since 2019
Focus on improving business
metrics, 60% unicorns and potential Investments and M&A pace 18% of all start-ups, and 20% of all
unicorns are actively hiring, 25% improved over 2021 with unicorns, have at least one-woman
expect to be EBITDA positive participation of Indian corporates founder

Source-Zinnov CoNXT Research & Analysis

Founders are cautious about 2023 as they navigate turbulent times

Key Tech Start-Up Challenges Focused on business expansion

Founders are focusing on business expansion and using various strategies, such as
partnerships, business model and pricing adjustments, and marketing spend
Hiring, increasing optimization, to achieve their goals. Some are also exploring new growth opportunities
46% and tackling complex problems in order to improve operational efficiency.
competition

Investor Sentiment 47%

Intentional about fundraising process

57% of founders opt for longer fundraising process or forgo funding in 2022, focusing
Shift in Valuations 25% on building relationships with investors and improving business metrics. Most
anticipate strong investor interest in 2023 and do not plan to wait for 2021 valuations

Market Recession 33%

Optimistic about revenue growth, hiring and fundraising

48% are actively hiring and at least 70% expect their revenues to grow. 37% of
Series A+ start-ups are equally concerned about market, founders predict that investment pace will recover within the next 12 months,
hiring and investors. Others are more concerned about while an additional 25% believe it will take up to 18 months for the pace to return.
talent hiring and investor sentiments than market However, uncertainty about the market due to recessionary conditions in the
West has caused some hesitation.

Source- Insights based on NASSCOM-Zinnov survey of 100+ start-ups across funding stages and industry sectors ; Zinnov CoNXT Research & Analysis
The tech start-up ecosystem is expected to grow sustainably through 2023

Exits

Unicorns

M&A momentum will sustain

through 2023, with up-tick in
Investments Active Unicorn and IPO listings in H2 2023
Potential Unicorn pool
will expand in-line with
Investors and 2022, at least
Corporates
2023 will have a difficult
Growth of start, but we expect the
Ecosystem funding environment to
improve as the year
Competition will progresses
continue to intensify,
with higher participation
Deep-Tech, SaaS and from Indian institutions
B2B will continue to
expand and attract more
investments

Source-Zinnov CoNXT Research & Analysis

Focused initiatives from key stakeholders is essential for sustained growth

For Union Budget 2023-24, on behalf Simultaneously, we must also continue to strengthen core fundamental building blocks
of the ecosystem, NASSCOM suggests

Parity on long-term capital gains Attracting Overseas Indian Tech Redefining University Education
A tax for domestic investors
A Talent Gap
Talent to be Outcome-Driven

Institutional Support for Start-ups Significantly Increase Public

B Revenue Growth
to Tap into Global Markets Procurement Targets
Revise eligibility criteria for ESOP
B tax deferment

Special Investment Fund for Provide Institutional Support for

C Sector Focus
Start-ups Building for SDG Solving Bharat Challenges

Simplify compliance for

C
investments
Accelerate participation in Innovation Expand Industry-Specific Physical
D DeepTech Initiatives Clusters and ongoing initiatives and Digital Sandboxes

Allow losses to be carried forward Leveraging Incubators to Support Accelerate Deployment of CGSS
D and set-off E Improving Success Rate Unfunded Start-ups to Support Start-ups

Source-Zinnov CoNXT Research & Analysis

2022 in Review
Tech start-ups continue to be key drivers of India’s economic and social growth

1Tn India’s Digital Economy Ambition

01 02 03 04
Driving Inclusive Increasing Technology Enabling Sustainable Improving industry
Growth Exports Growth competitiveness

20% of Indian B2C tech With estimated revenue of Tech start-ups have been 60% of Indian B2B tech
start-ups are focused on 8Bn+ in 2022, Indian SaaS central to the expansive growth start-ups are focused on Small
low-income group with start-ups are targeting to in Electric Vehicle adoption in and Medium Businesses with
significant majority focusing on generate 100Bn+ in the country and are critical significant majority focused on
financial inclusion, access to revenues by 2026 players in initiative for better – access to capital, access to
affordable healthcare, better climate, affordable and clean customer, improved
education and higher earnings energy, and sustainable compliance, productivity and
as the core value proposition. communities. worker efficiency as primary
value proposition.
Through 2022, start-ups have been net job creators with a significant majority on track to
report improvement in key metrics

Indexed Chart of Direct Employees of Mature Start-ups1 Indexed Chart of Cumulative Revenue3 of Mature Start-ups1
At six-month interval from Dec-20 till Dec-22 By Financial Year, annualized basis FY 2019

200 380

180 330

160 280

140 230

120 180

100 130

80 80
As on Dec 20 As on Dec 21 As on Jun 22 As on Dec 22 FY 2019 FY 2020 FY 2021

60% Unicorns and Potential Unicorns are actively hiring2 albeit at a slower pace 25% of Unicorns and Potential Unicorns are profitable3, or expect to be by mid-2023
and with more discretion
Layoffs have been pre-dominantly in EdTech, on account of shift to new normal. Start-up performance is driven by sector/market – with Travel and Hospitality
Otherwise, layoffs are preemptive or in adjustment to slower growth due to recovering rapidly and EdTech witnessing softness as students return to campuses
recession in west

Note : (1) Unicorns and Potential Unicorns are collectively referred as the pool of Mature Start-ups, (2) Entities with more than 5% growth in headcount between June 2022 to Dec 2022 have been referred as hiring entities ;
Others include 17 sectors like Automotive, Mobility, Media and Entertainment etc. (3) Revenue Indexing & Profitability analysis is done basis the subset of 120 entities representative of the pool Mature start-ups, which are registered in India and have publicly available data ; Source – LinkedIn, MCA
Investments dropped 24% over 2021, but crossed pre-pandemic highs

Equity investments in Indian Tech Start-ups

While there is a slowdown – annual investments were slightly higher than By calendar year1
four-year average. A significant share of investments in non-Unicorns and
increase in unique start-ups funded suggest that 2022 has been transition
to new normal post two, statistically, exception years. Total Funding ( Bn) No. of Deals
1589

1412

~1400 # of Unique start-ups funded, 18% higher than 2021

1177

4-Year
Avg.
Funding
918

66% % share of investments in non-unicorns2

24.1

18.2

13.1
Increase in Median Ticket size in Seed and Early 8.2
>20% stage compared to 2021, with overall ticket size
similar to 2021
2019 2020 2021 2022

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered (2) Unicorns are private entities with more than 1Bn valuation, analysis as on date 31-Dec-2022 ; Source-Zinnov CoNXT Research & Analysis
Late-stage investments bore the brunt with a staggering 40% drop

Late-Stage2 Equity investments in Indian Tech Start-ups

By calendar year1 The change in valuations for technology companies in the public
markets also affected the private markets. Investors have seen a
decrease in unrealized Internal Rate of Return (IRR) and start-ups
have had a harder time demonstrating their business metrics to
justify the valuations they were asking for in follow-on rounds,
which has slowed down the pace of deals.

4-Year
Avg.
Drop in mega-rounds
Funding

18.7
41% (deals with round size greater than USD 100 Mn )

11.1
9.3
Drop in median deal value for all late-stage deals;
5.9 29% 14% increase in Median deal value excluding
mega rounds

2019 2020 2021 Change in Change in # 2022

Round Size of Rounds

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered (2) Late Stage include Series C and above funding rounds. Source-Zinnov CoNXT Research & Analysis
While early-stage and seed-stage investments, both grew by more than 20%

Distribution of Early-Stage2 Investments Distribution of Seed-Stage2 Investments

By calendar years1 By calendar years1

Total Funding ( Bn) No. of Deals Total Funding ( Bn) No. of Deals

419

1018
939
329
297

4-Year 255 4-Year 700

Avg. Avg.
Funding Funding
545
5.9 1.2

4.4 0.9
3.4

2 0.4 0.4

2019 2020 2021 2022 2019 2020 2021 2022

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered (2) Seed stage include Seed and Angel stage funding rounds, Early stage include Series A and Series B funding rounds ; Source-Zinnov CoNXT Research & Analysis
47% of all investment deals involved a start-up raising their first round

% Share Of Start-ups Raising First-round1 % Share Of Start-ups Raising First-round1 And within 2 Years
Of all unique start-ups funded, by calendar year2 from Inception, Of all unique start-ups funded, by calendar year2

35%
58%

27%
47%
45% 25%
40%
21%

2019 2020 2021 2022 2019 2020 2021 2022

Note: (1) First-round round refers to the first equity funding round of a tech startup (2) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis;
similarly, for CY 2021, investment rounds of start-ups founded between 2011-21 are considered ; Source-Zinnov CoNXT Research & Analysis
Tech IPOs declined sharply while M&A held steady due to Indian corporates

Distribution of IPO Listings Distribution of M&A Deals Distribution of M&A Deals

By calendar year By calendar year1 By primary reason for acquisition2

Start-ups deferred their IPO plans in order to secure better

valuations and deliver improved post-listing performance
200+ Total # of M&A deals in 2022
114 85 216 207
53

11% 11% 8%
25%
8% Product Portfolio Expansion
19% 68%
25%

29 25%

23% Building Tech Capabilities

81%
70% 67%

10 50%
18% Market Expansion
4

2021 2022 2019 2020 2021 2022

3% Acquihire
Non-Tech Tech Global or Indian Startup Indian MNC Global MNC

Note: (1) For each calendar Year, M&A rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , M&A rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, M&A rounds of start-ups founded between 2011-21 are considered
(2) Percentage does not add up to 100% as a deal can have multiple reasons ; Source-Zinnov CoNXT Research & Analysis
Emerging tech start-up hubs continue to expand with 39% share of start-ups founded in 2022

% Share of Tech Start-ups in Emerging Hub

By Year of Inception
% share of all tech start-ups based
28% in Emerging Hubs1 Emerging Established

# of Active Unicorns and potential

10 unicorns in Emerging Hubs1
72% 69% 68% 66% 61%

Growth in investment deals2 in

2.4X Emerging Hubs1 since 2019

Growth in first-round3 investments

~3X since 2019
28% 31% 32% 34% 39%

2018 2019 2020 2021 2022

Note: (1) Established hubs are cities with at-least 1000 startups founded between 2012-22. Emerging hubs are Indian cities with less than 1000 tech startups founded between 2012-22 excluding established hubs ; (2) For each calendar Year investment rounds of start-ups founded in 10-year timeline
are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded between 2011-21 are considered (3) First-round round refers to the first equity funding round of a tech startup ;
Source-Zinnov CoNXT Research & Analysis
Women entrepreneurs' success in the tech start-up ecosystem is becoming evident

% Share of Women-Founded1 Start-ups

The percentage share of women-founded1 start-ups across stages of growth is by Funding Stage
in line with their participation in the ecosystem - indicating equal odds of success
compared to their male counterparts. Thus, providing evidence of the women's
intent and capability to play a role in the nation's economic growth and the crucial
need for accelerating DE&I initiatives.

Unfunded Start-ups 18%

36 # of Unicorns and Potential Unicorns with at least

Similar odds of success

one women founder/co-founder

Seed Stage 18%

18% Share of all start-ups in the ecosystem with at least

one-woman founder/co-founder Early Stage 14%

Late Stage 16%

Share of all Investment deals2 between 2019 to
17% 2022 were raised by women-led1 start-ups
Unicorn 16%

Note: (1) Start-ups with women as founders or co-founders are referred as women-founded or women led start-ups. (2) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 ,
investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded between 2011-21 are considered ; Source-Zinnov CoNXT Research & Analysis
How did Indian tech start-ups tackle the storm in 2022
The year 2022 has been challenging for technology start-ups. The founders have struggled with a
skills shortage, which was made worse by the economic downturn. This also led to a decrease in
business demand.

However, Indian start-ups have shown resilience by shifting their business strategies and focusing
on operational efficiency rather than laying off employees or closing down operations. They have
also turned to partnerships and collaboration models or have even considered expanding into new
areas to revive business demand.

Despite steady revenue growth for many start-ups, investor sentiment and valuations remain a
concern. This information is based on interviews and surveys conducted with over 100 start-up
founders from various funding stages and industry sectors.
Undoubtedly, 2022 was a challenging year for founders

Founders have transitioned well with return to office and WFH. As collaborated
by data, for seed and early-stage start-ups valuations and fundraise has been Low Moderate High
lesser challenge. Market demand and talent supply, however, have been
extremely challenging.

Shift in valuations 20%

Access to quality talent has been biggest Funding Availability 27%

challenge for founders

Product Innovation 23%

Labour/Talent availability
Low customer uptake, due to recessionary mood, 48%

has also contributed to extreme cashflow challenges

Cash flow crunch 41%

Shifting to WFH 18%

Founders appear to have taken shift in valuations
and funding availability in stride, as part of business
Low customer demand 39%

Source: Insights based on NASSCOM-Zinnov survey of 100+ tech start-ups across funding stages and industry sectors
Founders acted on multiple levers to improve cashflows to sustain business

What levers did you leverage to tackle business challenges

For Unfunded Start-ups For Funded Start-ups For Series A+ Funded start-ups

Operational cost optimization 41% 66% 90%

Marketing and Sales Spend Cut 18% 34% 40%

Hiring Freeze / Downsizing 16% 25% 50%

Retaining talent 39% 31% 30%

Change in Business Model 39% 39% 30%

Looking for investors / funding 65% 58% 40%

Revenue Growth / Diversification 41% 47% 60%

Merger / Selling off the business 4% 12% 20%

Scope for operational cost optimization Action driven by need to extend Actions driven by need to protect current
has been limited and consequently the runway and prepare for fresh valuation while extending runway and
focus has been on funding growth capital infusion. preparing for fresh capital infusion

Source: Insights based on NASSCOM-Zinnov survey of 100+ tech start-ups across funding stages and industry sectors
And quickly focusing on multiple strategies to expand customer base

How did your business strategies change in the past 6-12 months Rank in terms of Importance

Rank 1 Rank 2 Rank 3

Partner or Collaborate for

41% 16% 18%
Better Customer Access

Enhance existing solutions /

18% 18% 8%
Launch new offering

Increase focus on deep-tech and

complext problems /Solutions 13% 17% 20%

Expand to new business

segments (verticals,customers) 11% 23% 16%

Pivoting to new/adjacent
8% 14% 27%
portfolios

Source: Insights based on NASSCOM-Zinnov survey of 100+ tech start-ups across funding stages and industry sectors
48% founders are hiring while 29% have been unable to raise funding this year

How have your hiring plans changed in past 6 months Have you been able to raise funds in past 6 months

Found prospective investors 29%

Hiring, or increased hiring 48%

Fundraised as per plan 15%

Not actively hiring 39%

Not looking to raise funds 28%

Reduction in Workforce 13% Unable to raise funds 29%

Only 11% of funded start-ups reported inability to raise funding

Per expectation, funded start-ups have reduced or reallocated teams
Majority start-ups either deferred fundraise or shifted focus to building
Start-ups across stages continue to hire people albeit at rationalized pace
investor relationships in preparation for future fundraise

Source: Insights based on NASSCOM-Zinnov survey of 100+ tech start-ups across funding stages and industry sectors
54% tech start-ups reported improvement in revenue in the past 12 months

How was your valuation How has your revenue At this moment,
changed in past 6-12 months? changed in past 12 months? what is your biggest concern?

Significantly Down Slightly Down Reduced by > 20% Reduced Marginally

No major impact Increased Marginally Hiring, increasing 46%
No Change Slightly Up competition
Significantly Up Increased by >20%

Investor
47%
Sentiment

Shift in Valuations
7% 11% 34% 34% 13% 13% 3% 23% 12% 42% 25%

Market Recession
33%

54% Of start-ups reported increase in revenue

Series A+ start-ups are equally concerned about
Approx. 15-20% funded start-ups, across funding
stages, reported drop in valuations market, hiring and investors

7% start-ups have halted operations temporarily Others are more concerned about talent hiring and
Change is minimal for Seed-stage start-ups
60% unfunded start-ups reported drop in revenue investor sentiments than market

Source: Insights based on NASSCOM-Zinnov survey of 100+ tech start-ups across funding stages and industry sectors
Continued momentum in sector diversification
There has been a marked expansion in the industries targeted by Indian start-ups and an improvement in the quality
of use cases being solved. Most sectors have raised investments greater than they did in 2019, with BFSI, Retail and
Retail Tech, Enterprise Tech, and EdTech remaining the most preferred sectors.

Nascent sectors, including Agri-Tech, Industrial and Manufacturing, Energy and Utilities, are also growing rapidly with
the adoption of technology-led solutions by end-customers and players across the value chain.

Sectors affected by the pandemic continued to see muted investor interest, while sectors critical to India's
development, such as Environment Tech, Aviation, Maritime and Defence, and Life Sciences gained sustained interest.

B2B start-ups, with their technology and business model innovation, also gained prominence, as did SaaS which
continues to advance India's position on the global product innovation map.
Most sectors have raised investments greater than 2019

Comparative Assessment of Total Investments1

The last three years have been outliers and consequently, 2019 and the By Sector, in $ Bn, for sectors with $100Mn+ investments in 2022
4-year average are better baselines for analyzing investment trends within
the ecosystem. Almost all sectors have raised investments higher than 2019 Sectors 2019 4-Year Avg. 2022
and the 4-yearaverage.
BFSI
Retail and Retail Tech
Food-Tech
Enterprise Tech
EdTech
Mobility
# of Sectors2 with investments lower than
04 2019 and 4-Year average
SCM & Logistics
HealthTech
Automotive
Agri-Tech
Energy & Utilities
Advertising & Marketing
Social Platforms
# of Sectors most impacted – Mobility, Fitness Industrial & Manufacturing
03 and Wellness, Travel and Hospitality Media and Entertainment
HR-tech/Human Resources
Real Estate & Construction
Professional Services
Life Sciences
Gaming
All three sectors were severely impacted during Fitness & Wellness
pandemic and are expected to beat pre-pandemic Aviation, Maritime & Defence
Travel and Hospitality
highs in 2023
Relative Investments Intensity
Low High

Note: (1) For each calendar year, Investment analysis is done for start-ups and unicorns founded in the 10-year timeline (2) Sector definitions are included in “Notes for Reader” section.; Source-Zinnov CoNXT Research & Analysis
BFSI, Retail, Enterprise and Education continue to be most preferred sectors

Shifting in Ranking in 2022 vs 2019 Based on investments in a sector in a calendar year1

High (#1)
Retail and
Retail Tech, 3, 2
Enterprise Tech, 7, 3
Food Tech, 16, 4 BFSI , 1, 1

EdTech, 9, 5 SCM & Logistics, 4, 7

Social Platforms, 15, 6
By $Bn investments in the year

Automotive, 8, 9
Ranking of Sectors2 in 2022

Agri-Tech, 13, 10

Advertising & Marketing, 19, 12 HealthTech, 6, 8

Energy &
Utilities, 12, 11
HRTech/Human Resources, 20, 16 Real Estate &
Aviation, Maritime Construction, 10, 13 Mobility, 5, 14
Media and
& Defence, 31, 19 Life Sciences, Industrial &
Entertainment, 21, 17
27, 20 Manufacturing, 14, 15
Professional
Services, 18, 18 Fitness & Wellness, 11, 22
Travel and Hospitality, 2, 23
Gaming, 17, 21
Environment Tech, 25, 24
Consumer Tech, 23, 25

Ranking of Sectors in 2019 High (#1)

By $Bn investments in the year

Label =
Moved Down in Ranking Moved Up in Ranking Neutral – no major shift in ranking Sector Name, Rank in 2019, Rank in 2022

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded between
2011-21 are considered (2) Sector definitions are included in “Notes for Reader” section.; Source-Zinnov CoNXT Research & Analysis
Nascent sectors are growing rapidly as solutions mature and gain market traction

Equity investments1 in Sectors

Growth is more evident considering small-base in 2019 and, increased In Bn, by calendar year
adoption of technology-led solutions by end-customers and players
across the value chain. Agri-Tech, industrial and manufacturing, energy
Food Tech Agri-Tech
and utilities are also sectors with strong SDG aspect. Energy & Utilities Advertising & Marketing
Industrial & Manufacturing Media and Entertainment
HRTech/Human Resources Social Platforms
A priority sector for India, Agri-Tech has been gaining $5.3
increasing share of investments driven by market adoption
$4.8

Food-Tech has undergone massive shift in past three-years; 4.5X

including leading the return-to-normal movement

Industrial and manufacturing, energy and utilities focused

solutions have witnessed increasing uptake from end-users

$1.1
$0.7

Technology-adoption has hit record highs in media and

entertainment, advertising and marketing sectors
2019 2020 2021 2022

Note: (1)For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered; Source-Zinnov CoNXT Research & Analysis
Sectors affected deeply by pandemic continued to witness muted investor interest

Equity investments1 in Sectors

Building novel solutions, these start-ups have two key characteristic – In Bn, by calendar year
significant portion of workforce is skilled in deep-tech with focus on
building patentable intellectual property.
SCM & Logistics Mobility Fitness & Wellness Travel and Hospitality
$4.1
~ 3X
Increase in fuel prices and slow market recovery made
profitable growth challenge in SCM and Logistics

Mobility contracted with slow return to work, increase fuel

costs, and increased preference for personal transport

$2

Travel and Hospitality, apart from mobility, has been one

of the slowest sectors to recover to pre-pandemic levels $1.4

$0.7

In Fitness and Wellness investors have taken

wait-and-watch approach for “winning” business model
2019 2020 2021 2022

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered; Source-Zinnov CoNXT Research & Analysis
Sectors critical to India’s holistic development are gaining sustained interest

Equity investments1 in Sectors In $Mn, by calendar year

Environment Tech ( Mn) # of Deals Aviation, Maritime & Defence # of Deals Lifesciences ( Mn) # of Deals

17 10
15
6 6
9 9
3
6
4 60.64 186.52 166.00
2 2
95.54
18.34 64.37
15.22 44.30
10.57 0.96 5.00 4.58

2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022

Driven by increased focus on ESG by large Driven by growth of Space-Tech start-ups Currently cornered by few start-ups – the sector is
enterprises and search for sustainable businesses coupled with increased adoption of autonomous at intersection of science and technology driven by
/ remote-controlled solutions in private and need for digital therapeutics and marked demand
Sector has strong tailwinds for next decade public sector to reduce cost of drug discovery and diagnostics

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered; Source-Zinnov CoNXT Research & Analysis
B2B start-ups gained prominence with technology and business model innovation

Equity investments in B2B Start-ups

Small Medium Businesses (SMBs) are key driver of economic growth. In By calendar year
India they contribute 27% of national GDP. Start-ups are actively driving
digital maturity of this underpenetrated market seeking cost-effective 765
Total Funding (in Bn)
solutions to take-on large enterprises.
Total # of Deals
671

% of Unicorns1 and Potential Unicorns2 with B2B

50% business model, driven by significant investment
growth in 2022
482

4-Year 416
% of Unicorns1 and Potential2 Unicorns are servicing Avg.
74% SMBs; only 26% of start-ups are purely focused on
Large Enterprises
Funding
10.4

8.1

4.7
% of Unicorns1 and Potential2 Unicorns are servicing
52% global markets(including non-SaaS solutions)
3.3

2019 2020 2021 2022

Note: (1) Unicorns are private entities with more than 1Bn valuation, analysis as on date 31-Dec-2022 (2 ) Potential unicorns are start-ups founded between 2012-22 and with total funding more than 50Mn+.
Does not include start-ups that became unicorn on or before 31-Dec-22; Source-Zinnov CoNXT Research & Analysis
SaaS continues its long-march to place India on global product innovation map

Equity investments2 in SaaS1 Start-ups

Entrepreneurs are leveraging India’s unique strength – largest pool of devel- By calendar year
opers, small medium businesses, and largest R&D location for global MNCs
outside HQ – to build solutions that are viable across borders. Segment was
deeply impacted by shift in public market valuations. Total Funding (in Bn) Total # of Deals

59 # of Unicorns (26) and Potential Unicorns (33) 306

263
4-Year
Avg. 217
Funding 204

4.2
% of SaaS1 Unicorns and Potential
68% Unicorns serving global markets
2.7
2.3
1.7

% of SaaS1 start-ups building Horizontal

68% Business Applications (57%) and Infrastructure
Applications (11%) 2019 2020 2021 2022

Note: (1) Enterprise tech start-ups with Software as their main source of revenue are termed SaaS (2) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 ,
investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded between 2011-21 are considered; Source-Zinnov CoNXT Research & Analysis
Deep-Tech Start-up Growth Continues
The base of deep-tech start-ups in India is rapidly expanding in response to market needs,
constituting 12% of the overall start-up ecosystem and growing faster than the ecosystem.

Deep-tech start-ups have also witnessed an increase in investments, with a 3x growth in seed-stage
investments from 2020 and more than 30% year-on-year growth in early-stage investments, which
is up 2x from 2020. There are over 500 inventive’ deep-tech start-ups in India that are building
new-to-world technologies and have a significant portion of their workforce skilled in deep-tech,
with a focus on building patentable intellectual property.

Applications of deep-tech have permeated across all industrial sectors, with the convergence of
technologies enabling start-ups to solve for more use-cases. The increasing adoption of deep-tech
is essential in many industries due to increasing global competition and is also reflective of the
improving technology skills in the Indian start-up ecosystem. With increasing focus and support from
policymakers, an expanding base of talent with niche skills, and improving exposure to applications
and technologies, we expect the diffusion of deep-tech to increase.
With 12% start-ups leveraging deep-tech, base continues to expand consistently

Distribution2 Of Deep-Tech1 Start-ups,

Deep-tech start-ups are growing faster than the overall By technologies leveraged
ecosystem. Significant majority is based in Established Hubs
due to better access to talent, subject matter experts and
proximity to customers.
Artificial Intelligence

N = 3100+
3100+ # of unique Deep-Tech1 start-ups
Internet of Things

Big Data & Analytics 19%

42% % growth rate over last decade

64%
Blockchain 4%
18%
78% % share of B2B start-ups,
AR/VR
7% 9%
% of start-ups were in Enterprise Tech,
55% BFSI, Health Tech, EdTech and Advertising 3D Printing & Drones
and Marketing

Note: (1) Deep-Tech start-ups are active tech start-ups that create, deploy or utilize advanced technology in their products or services. Advanced technologies largely include Artificial Intelligence/ Machine Learning, Internet of Things (IoT), Blockchain, Big Data & Analytics,
Augmented Reality/ Virtual Reality (AR/VR), Robotics, 3D printing and Drones. (2) Total does not add to 100% as a deeptech start-up can leverage multiple technologies simultaneously to create products/ solutions ; Source-Zinnov CoNXT Research & Analysis
With 3Bn+ in investments, deep-tech start-ups had a record year

Equity investments in Deep-Tech Start-ups

By calendar year1 With increasing digital spends from large enterprises across sectors –
investments are expected to increase as start-ups gain business tractions
Total Funding ( Bn)
and mature their product portfolio for scale.

~2.8X

Investments increased across all

the funding stages2

3.6 3X Growth in seed-stage from 2020, Increased

from 0.1Bn to 0.3Bn in 2022
2.7

1.5
1.3
Growth in early-stage investment from 2020
2X Increased from 0.6Bn to 1.4Bn in 2022

2019 2020 2021 2022

Note : (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered (2) Seed stage deals include Seed and Angel stage funding rounds. Early-stage deals include Series A and Series B funding rounds. Late-stage deals include Series C and above funding rounds.;
Source-Zinnov CoNXT Research & Analysis
500+ “inventive1” deep-tech start-ups are building new-to-world technologies

Distribution of “Inventive” Deep-Tech Start-ups

Building novel solutions these start-ups have two key By percentage workforce with relevant skills3
characteristic – significant portion of workforce is skilled in
deep-tech with focus on building patentable intellectual
property.
31% 40% 20% 9%

940+ # of patents filed2 in and outside India

0-24% 25-49% 50-74% 75-100%

22% % share of granted patents of all active filings

Distribution of other4 Deep-Tech Start-ups
By percentage workforce with relevant skills3

94% % share of all fillings were in 2016-22 period

60% 29% 7% 3%

350+ # of patent filings in India

0-24% 25-49% 50-74% 75-100%

Note: (1) Deeptech start-ups that are creating new products/ solutions with unique intellectual property or/and backed by scientific advances or fundamental research (2) A sample of 450+ deeptech start-ups were analyzed for patent analysis (3) A sample set of 500+
DeepTech start-ups considered for workforce analysis. % DeepTech workforce with relevant skills indicates presence of deep technology skilled employees in a DeepTech start-up including but not limited to roles like AI/ML Engineer, Blockchain Developer, Computer Vision Engineer,
Blockchain Scientist, Robotics Engineer, AR Designer, Research Scientist etc. (4) Others consist of non inventive DeepTech start-ups; Source-Zinnov CoNXT Research & Analysis
Unicorn and Potential Unicorns Pool Strengthens
The shift in public market valuations has had a direct impact on the pace of unicorn development in India.
A slowdown in late-stage funding was observed, due to a decrease in mega-rounds and median deal size.
However, India still added the second highest number of unicorns, after the US, with an increased
representation from B2B start-ups.

The potential unicorn club also saw similar growth as in 2021, with investments better distributed across
different round sizes. This led to an increase in the number of start-ups with total funding greater than USD
50 million, creating a strong pipeline of potential unicorns.

The expanding pool of start-ups with resources available to gain market share and leadership also
suggests that the years 2020 and 2021 were not an anomaly in terms of the number of start-ups
becoming unicorns.

Despite the slowdown, the number of unique and active institutional investors remained strong. With a
growing pool of experienced operators and India's unique parallel start-up ecosystem, continuous growth
of the ecosystem is expected.
Shift in public market valuations has had direct impact on unicorn pace

Valuation Multiples of Listed Technology Companies vs # of New Unicorns1 Created by quarter, by calendar years

Private market
valuation lag public
markets by 3-6
months
15
14 Drop in forward
13 revenue multiples
led to subsequent
11 drop in new
unicorns.

6 6

3 3
2
1 1

2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3

Note: (1) Unicorns are private entities with more than 1Bn valuation, analysis as on date 31-Dec-2022. Source-The BVP Nasdaq Emerging Cloud Index, Zinnov CoNXT Research & Analysis
Late-stage slowdown was due to drop in mega-rounds and median deal size

Distribution of Deals Across Investment Round Sizes Stage-wise2 Median Ticket Size Of Investments
By calendar years1 In $Mn, by calendar year1

2021 2022 Seed Early Late Late (exc. Unicorn)

549
510
70.0
473
436

50.0

39.0
35.2
221
25.0
171
20.0
13.0
9.8
67 9.0
7.0
45 55 40 5.0 5.0
4 2 0.34 0.63 0.55 0.67

2019 2020 2021 2022

< 1Mn 1- 10Mn 10- 50Mn 50- 100Mn 100- 500Mn > 500Mn

Note- (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded
between 2011-21 are considered (2) Seed stage include Seed and Angel stage funding rounds, Early stage include Series A and Series B funding rounds and Late Stage include Series C and above funding rounds ; Source-Zinnov CoNXT Research & Analysis
Against the odds, India once again added 2nd highest number of unicorns

USA1 China2 India3 U.K.4 Israel5 Germany1

Total Active Unicorns 619 312 89 57 44 30

Unicorns7 added in 140 11 23 14 11 5

2022

Innovation Clusters6
with at least 1 Unicorn
40 20 8 7 3 5

Avg. Time to Unicorn7

(in years) 6-8 5-7 7-9 7-9 7-9 5-7

Source: (1) CB Insights – the complete list of unicorns (2) Hurun Global Unicorn Index 2021 (3) Zinnov CoNXT Research & Analysis (4) Beauhurst UK Unicorn List Data as on 31st Dec 2022 (5) Tech Aviv Israel Unicorn List (6) Towns and Cities have been combined into clusters. For instance, Silicon Valley
clusters includes Palo Alto, Menlo Park, San Jose, Mountain View etc. Similarly, Delhi-NCR cluster includes Delhi, Noida and Gurgaon (7) Time to attain unicorn status is calculated from Year of Inception. Kindly refer to the unicorn definition from “Note for readers” section
The Unicorn club composition shifted with increased representation from B2B start-ups

Number of Unicorns1 Added or Removed

2021 was an outlier globally for new unicorn additions. With market By Calendar Year
shifts, the valuation multiples have changed and require start-ups to
have significantly better business metrics. Adjusting for correction,
unicorn creation pace is in line with ecosystem fundamentals. 892
23
X Total Unicorns at Year-end
-3
# of Unicorns added 42 69
% of new Unicorns are B2B start-ups; with significant
74% pool focusing on SMB customers # of Unicorns removed

-12

% of new Unicorns have SaaS business model;

30% increasing tally of Unicorns servicing global markets to 45%

12

# of Sectors with at least one new Unicorn; expanding total

10 to 20 sectors with at least one active unicorn 9

10 9
-1
1
Of new Unicorns were in Enterprise Tech, BFSI, Retail and
70% Retail Tech, SCM and Logistics; sectors constitute 56% 20
17
20
18
20
18
20
19
20
20
20
21
20
21
20
22
20
22
Un
ic o
rns

of all unicorns To
tal

Note: (1) Unicorns are private entities with more than 1Bn valuation, analysis as on date 31-Dec-2022 (2) Holding companies such as Mensa Brands and Global Bees have been excluded from the Unicorn club. Please refer to the note for readers for detailed list of exclusions from the unicorn club;
Source-Zinnov CoNXT Research & Analysis
Interestingly, in 2022, the potential unicorn club expanded at similar pace as 2021

# of Start-ups Crossing 50Mn+ in Cumulative Funding

By Calendar Year Seed-stage and Early-stage valuations held steady through 2021-22.
Growth in potential unicorn pool is reflective of ecosystem depth and
continued investor interest in technology start-ups. Pool is more diversified
in terms of sectors, business models, customers and geographies serviced.

60

1:1 Split between B2C and B2B start-ups in the pool

# of start-ups with 100Mn in total funding.

53 174 70+ We have strong pipeline for Unicorn club

# of sectors represented in the pool; with Aviation,

22
22 Maritime and Defence as newest entrant
18

8
13 39% % share of all Potential Unicorns1 servicing global markets
2017 2018 2019 2020 2021 2022 Total

Note: (1) Potential unicorns are start-ups founded between 2012-22 and with total funding more than 50Mn+. Does not include start-ups that became unicorn on or before 31-Dec-22;
Source-Zinnov CoNXT Research & Analysis
Despite slowdown, we witnessed in 1.6X growth in unique and active institutional investors

Number of unique institutional investors2

Through 2022, most active1 VC/PE firms remain largely unchanged By calendar year3, by various round sizes
albeit with definite shift in their investing strategy. Adjusting for market
normalization, we have largest-ever capital pool available for 2021 2022
deployment in tech start-ups. 780+

Increase in participation at Early-stage5

1.8X

435+
800+ Active Venture Capital firms, up 1.7X from 2021
380+

270+

190+ Private Equity firms with at least one investment, up ~2X

155+ 165+
145+
130+
105+ 115+

250+ Corporate investors4, up 1.4X from 2021 20+

5+

< 1 Mn 1 - 10 Mn 10 - 50 Mn 50 - 100Mn 100 - 500 Mn > 500 Mn

Note: (1) Active investors are investors that have taken part in at least one deal in a particular year (2) Unique institutional investors include Venture Capital firms, Private Equity Firms and Corporate investors (3) For each calendar Year investment rounds of start-ups founded in 10-year
timeline are taken for Analysis(4) Corporate investors include Indian/ global corporate organizations and corporate venture capitalists (CVCs) (5) Early stage deals include Series A and Series B equity funding rounds ; Source-Zinnov CoNXT Research & Analysis
Corporate Participation in Indian Start-ups Intensifies
Corporate participation in Indian start-ups continued to increase significantly in 2022, with large enterprises
investing, acquiring, and forming partnerships with start-ups. This trend reflects the ongoing confidence in the Indian
start-up ecosystem. Seed and Early-stage start-ups saw the most traction, with corporations investing the most in
mature sectors like BFSI, Retail and Retail Tech, Enterprise Tech, EdTech, Health Tech, and HR-Tech.

Indian MNCs leveraged start-ups for inorganic growth, while global MNCs appeared to have slowed their investments
due to recessionary market conditions in their home countries. M&A activity in India remained active in H1 2022,
despite the slowdown in global deals. There was a preference for mature companies due to more reasonable
valuations, higher confidence in unlocking value post-transaction, and increased availability of assets. Corporations
also deepened their open innovation capabilities.

The shift towards inorganic growth and open innovation in the wake of the pandemic has proven increasingly relevant
in handling uncertainty, including shifts in customer behavior, new geopolitical challenges, increasing supply-demand
gaps for technology talent, and reduced patience from financial investors.
Corporate participation grew 1.3X over 2021 baseline

Investments
Post-pandemic shift continues to stay relevant Increase in # of deals

Inorganic growth and open innovation have proved increasingly relevant 250+ 44%
with corporate
investments1 versus
2020
tools for handling uncertainty including - shift in customer behavior,
newer geopolitical challenges, increasing supply-demand gap for
technology talent, and reduced patience of financial investors.

M&A2

Acquisitions driven by

# of Active Corporates 55+ 64% product portfolio and

tech expansion
350
>2X
250
350+
150 260+
170+ Open Innovation
50
Programs3
# of sectors with active
2020 2021 2022
22
80+ corporate OI program

Note: (1) Includes both Corporate and Corporate Venture Capital (2) For each calendar Year M&A rounds of start-ups founded in 10-year timeline are taken for Analysis; (3) Open innovation refers to a company leveraging external knowledge and ecosystem for their innovation management strategies ;
Source-Zinnov CoNXT Research & Analysis
Investment deals grew by 44% since 2020 with increase across all investment stages

Distribution of Corporate Investment Deals

By funding stage2, by calendar year1 Corporate investments are most common in mature sectors like
BFSI, Retail and Retail Tech, Enterprise Tech, EdTech, Health
Tech and HR-Tech with significant majority being strategic
~ 2X 265+
bets for market expansion.

230+
59
Of all funding deals had at lease
65
17% one corporate investor3

106
130+
69 78%
% share of Indian MNCs of
43 55% unique corporates

54
67% 98 104

33 Of participation was in deal size

51% in the 1-10Mn range
2020 2021 2022

Seed Stage Early Stage Late Stage

Note: (1) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021, investment rounds of start-ups founded
between 2011-21 are considered (2) Seed stage include Seed and Angel stage funding rounds, Early stage include Series A and Series B funding rounds and Late Stage include Series C and above funding round (3) Includes both Corporate and Corporate Venture Capital
75% of corporate M&A was driven by Indian MNCs seeking inorganic growth

Distribution of Acquiring Corporate, Distribution of Acquired start-ups,

By calendar year1 By calendar year1

Indian MNC Global MNC

Age > 5 Years Age <= 5 Years

17
16

7
23
51
9 52
5
36
16 20
20

2020 2021 2022

2020 2021 2022

Indian MNC participation grew due to increasing comfort in

acquiring loss-making and/or technology businesses, and the India M&A was active in H1 2022 despite slowdown in global deals.
increasing number of success stories emerging from these Preference for mature companies can be attributed to more
transactions. Global MNCs appeared to have slowed due reasonable valuations, higher confidence in unlocking value
recessionary market conditions in home geographies. post-transaction, and increased availability of assets.

Note: (1) For each calendar Year M&A rounds of start-ups founded in 10-year timeline are taken for Analysis. For Instance- For CY 2022, M&A rounds of start-ups founded between 2012-22 are taken for analysis; similarly, for CY 2021, M&A rounds of start-ups founded between 2011-21 are considered ;
Source-Zinnov CoNXT Research & Analysis
Technology teams deepened their Open Innovation capabilities to build global solutions

Distribution of Active and Structured Open Innovation Programs1

Corporates are leveraging open innovation programs to reduce cost and (by calendar year, by sponsor type)
increase pace of experimentation; while overall optimizing time-to-market.
There is an increased preference to validate synergies before making
Global Corporates Indian Corporates
strategic investments or acquisitions in core business areas.
>1.5X
85+

22+ # of Sectors with at least one corporate

Open Innovation program1
60+ 30+
25+

20+
% share of programs operated by Global MNCs
64%
50+ 55+
40+
# of sectors with active corporate
22 Open Innovation program

As of 2019 As of 2021 As of 2022

Note : (1) Open innovation refers to a company leveraging external knowledge and ecosystem for their innovation management strategies . Types of Open innovation programs include Incubator, Accelerator and Partner Program ;
Source-Zinnov CoNXT Research & Analysis
More mature start-ups leveraged the ecosystem for growth
Well-funded start-ups continued to leverage inorganic and Open Innovation strategies in 2022, with 80 unique
active Unicorns and potential Unicorns deploying resources to leverage up-and-coming start-ups.

Equity investments remained the preferred mode for expanding market and technology capabilities. This trend
is being formalized through the creation of dedicated teams. Growth in Seed-stage and steady Early-stage
investments reflected market trends and were better suited to the size of available investment capital.

M&A activity slowed in 2022 as firms focused on capital optimization, including waiting for better valuations on
prospective targets. However, Unicorns and potential Unicorns backed by investors actively acquired start-ups
in H1 2022.

There was a fundamental shift in the growth playbook for start-ups and investors, with the playbook being
influenced by sector trends, presence of serial entrepreneurs, risk appetite of investors, and availability of
capital.
More well-funded tech start-ups leveraged inorganic and open-innovation strategies

Investments
# of mature start-ups actively

25+
investing, more than 4X increase
from 2019 , with increased activity
from potential unicorns

~2.5X Increase in
Unique Entities 30%
From 2019 M&A
# of firms with at least 1 M&A

50+ transaction, more than 2X

increase from 2019

% of mature start-ups1 inorganic and open innovation strategies Open Innovation

Programs
# of mature start-ups building
Open Innovation Programs,, ~3X
80 unique active Unicorns and Potential Unicorns are leveraging
up-coming start-ups as a means of growth and to prepare for the future. 15+ increase from 2019

Note : (1) Mature start-ups include Potential Unicorns and Unicorns ; Source-Zinnov CoNXT Research & Analysis
Equity investments continue to be the preferred mode for expanding market and
technology capabilities

Number of Investment Deals2 by Mature Start-ups1

By stage, by Calendar Year Strategy taps into pre-existing behavior of new founders preferring
experienced operators, especially successful entrepreneurs, to be angel
investors. Formalization through a dedicated team allows for mature
Seed 85 start-ups to build capabilities to discover new growth avenues.
Early 6
Late
Growth in seed-stage and steady
early-stage investments reflects market trends;
28 and suit corpus size better
4

>12X

Unique start-ups have raised investments

26
140+ from Unicorns or potential unicorns,
since 2019

51

3 29 % of 2022 investment in global start-ups;

7

3
5
50% driven by new-age technologies like web3 ,
for B2B product/market expansion
2 8
2
2019 2020 2021 2022

Note : (1) Mature start-ups include Potential Unicorns and Unicorns. (2) For each calendar Year investment rounds of start-ups founded in 10-year timeline are taken for Analysis, for instance for CY 2022 , investment rounds of start-ups founded between 2012-22 are considered for analysis; similarly, for CY 2021,
investment rounds of start-ups founded between 2011-21 are considered Source-Zinnov CoNXT Research & Analysis
M&A pace slowed as focus shifted to value maximization in bear market

Distribution of M&A deals2 led by Mature Start-ups1

Backed by investors, fueled by mega-rounds, unicorns and potential unicorns By calendar year
actively acquired start-ups in H1 2022. Deal pace significantly slowdown as
firms focused on capital optimization – including waiting for better valuations
Active Unicorns Potential Unicorns
on prospective targets.

77

Increase in number of unicorns and potential

~2X unicorns leveraging M&A, compared to 2019 34

37
2.7X

% of acquired start-ups were B2B,

61% up from 44% in 2021
28

7 52
12
40

% of start-ups acquired in EdTech,

58% Enterprise Tech and BFSI 16
22

2019 2020 2021 2022

Note: (1) Mature startups include Potential Unicorns and Unicorns. (2) For each calendar Year M&A rounds of start-ups founded in 10-year timeline are taken for Analysis. For Instance- For CY 2022, M&A rounds of start-ups founded between 2012-22 are taken for analysis; similarly, for CY 2021,
M&A rounds of start-ups founded between 2011-21 are considered; Source-Zinnov CoNXT Research & Analysis
Playbook is being leveraged more frequently and sooner in maturity cycle

Calendar Year of Deal Activity (Investment + M&A)

2015 2016 2017 2018 2019 2020 2021 2022

2008
Low High
2009 Intensity of engagement
(M&A +investments)
2010
Inception Year of Mature Start-ups

2011
(Unicorn + Potential Unicorn)

Firms with serial entrepreneurs have

2012 higher propensity for the approach
2013
BFSI, web3, SCM & Logistics and
2014 Enterprise Tech witnessed highest
2015 playbook adoption

2016

2017 Uptick driven by increasing investor

comfort with inorganic growth strategies
2018

2019

2020 Shift driven peer activity and formalization

of inorganic growth strategies through
2021
dedicated teams

Source-Zinnov CoNXT Research & Analysis

Outlook
Tech start-ups anticipate 2023 to be a turbulent year

By when, do you expect market valuations By when, do you expect investor interest How do you anticipate your business
to reach 2021 levels? and investments pace to reach 2021 levels? revenues to change in next 12 months?

3-6 Months 6-12 Months 3-6 Months 6-12 Months Reduce by > 20% Reduce Marginally

12-18 Months Difficult to Assess 12-18 Months Difficult to Assess Increase Marginally Increase by > 20%

Difficult to Assess

11% 17% 21% 51% 17% 19% 25% 36% 11% 60% 20%

Much alike investors, start-ups are unclear about Founders are less uncertain about investor
Funded start-ups have better clarity on 2023
valuations going forward but our preparing for interest – this is collaborated with increase in dry
compared to the unfunded start-ups
long-haul powder with VC/PE – yet cautiously optimistic
This can be attributed to availability of more
Funded start-ups are more optimistic with majority Funded start-ups seem to have better
resources, better visibility in market, access to
expecting valuations to reset in 6-18 months line-of-sight of investor interest but are less
better talent, and investor network
certain about investment pace in near term

Source: Insights based on NASSCOM Zinnov survey of 100+ start-ups

The focus is on expanding business and being investment-ready

What are your immediate business priorities over next 6-12 months?
Having adapted to market shifts, the start-ups are looking at 2023 for For Funded Start-ups
growth, not just survival, with dual focus on customers as well as investors.
A significantly high percentage is focused on business expansion – Very High High Neutral Low Very Low

including addition of new revenue streams.

Business Expansion 44% 19%

Fundraising 42% 29%

Business expansion along with fundraising are Cost Optimization 34% 28%

top priorities for funded start-ups Product / Revenue

Diversification 30% 36%

Unfunded start-ups are prioritizing fundraise What are your immediate business priorities over next 6-12 months?
along with revenue diversification – alluding to For Unfunded Start-ups
possible pivots
Very High High Neutral Low Very Low

Fundraising 55% 15%

Cost optimization is relatively lower priority Product / Revenue

33% 36%
Diversification
possibly because of interventions in
previous months Business Expansion 30% 21%

Cost Optimization 28% 18%

Source: Insights based on NASSCOM Zinnov survey of 100+ start-ups

The tech start-up ecosystem is expected to grow sustainably through 2023

The funding downturn in H2 2022 is expected to continue in H1 2023 due to global market recession fears, but factors like the availability of dry power, a
strong funnel of seed and early-stage start-ups, expansion in customer spend on tech-led solutions, and improving business metrics will drive the
start-up sector forward as the year progresses.

M&A activity is expected to continue in 2023, but the return of IPOs may be delayed until the latter half of the year. The demand for rapid growth, slow pace
of in-house development, ongoing difficulty in hiring technical personnel, and more reasonable start-up valuations are expected to maintain the pace of M&A deals.
The market conditions for IPOs remain challenging, and start-ups will need to showcase sustainable growth to increase the odds of a successful listing.

In a recessionary climate, private and public market investors are likely to favor companies that deliver sustainable growth. The pressure on technology stocks
may ease as these firms continue to achieve strong top-line growth and improving bottom-line results compared to non-tech companies. As a result, market
valuations for technology firms may improve to higher than pre-pandemic levels, with a wider gap between the bottom and top quartiles.

Technology innovation and deep-tech adoption are expected to continue increasing, particularly in areas related to SDG that require complex solutions.
The adoption pace may depend on the talent demand-supply gap as more global MNCs expand their India R&D centers. Start-ups are likely to continue drive
real-world application in areas such as Quantum Computing, Web3, AI/ML, Cybersecurity, Robotics, Drones, Aerospace, and the Circular Economy.

In the coming year, we may see new breakout sectors beyond the traditional favorites. Over the years, there has been a diversification of use cases and
opportunities that start-ups are pursuing across 25+ industries. SaaS as a revenue model and B2B as a business model are expected to become more prominent.
Sectors such as Agri-Tech, Environment Tech, Gaming, Automotive, Industrial & Manufacturing, Aviation and Defence see a higher share of investments.

Source: Insights based on NASSCOM Zinnov survey of 100+ start-ups

Recommendations
On behalf of the ecosystem, NASSCOM suggest some immediate steps

1 Parity on long-term capital gains tax for domestic investors 2 Revise eligibility criteria for ESOP tax deferment

Time to Time to
Impact Metrics Med Impact Metrics Low
Impact Impact
Increase in share of domestic • Increase in wealth-creation for employees
investments Criticality to • Increase in new angel investors Criticality to
High High
Ecosystem Ecosystem

Removes the tax arbitrage and levels the playing field for all investors. For start-up employees, significant value creation and improved odds of realization is possible
Increases attractiveness of private market investments as an asset class for HNI. only upon early-stage and late-stage investments. Unfortunately by then, majority start-ups do
While increasing realizing in hands of investors also helps expand the available pool of capital not qualify for recognition vide current definition and employees face the onerous burden of tax
from experienced investors for start-ups. payment on non-realized gains.

3 Simplify compliance for investments 4 Allow losses to be carried forward and set-off

Impact Metrics Time to Time to

Low Impact Metrics Med
Impact Impact
Increase in participation of investors
• Increase attractiveness for investors
Reduced compliance cost
Criticality to High • Improvement in cashflows Criticality to High
Ease of doing business Ecosystem Ecosystem

Withdraw the amendment requiring start-ups to explain the source of income of the investors. • Number of universities and programs implementing an outcome-driven education model
This will remove friction in seeking investments from friends, family, and other investors adding a • Increase in the employability of graduates, particularly in deep-tech fields
new asset class. It also reduces operational overheads for founders to focus on company building. • Increase in the participation of employers in the program
We must also continue to strengthen core fundamental building blocks

Key Challenges Recommended Initiatives

60% of deep-tech start-ups are Accelerate participation in innovation Expand industry-specific physical
A seeking better infrastructure and clusters and ongoing initiatives and digital sandboxes
knowledge access

Institutional Support for Start-ups to Significantly Increase Public

Revenue growth is a key priority for all Tap into Global Markets Procurement Targets
B start-ups with 33% expressing concerns
on market recession in 2023 Special Investment Fund for Provide Institutional Support for
Start-ups Building for SDG Solving Bharat Challenges

46% founders identified hiring as key

Attracting overseas Indian Redefining university education
C concern in 2023; complexity increases
tech talent to be outcome-driven
non-linearly with growth

36% founders are unsure about Leveraging technology and

investments while 25% anticipate Accelerate deployment of CGSS
D business incubators to support to support start-ups
12-18-month period for investment unfunded start-ups
pace to recover
Accelerate momentum of Deep Tech start-up growth with deep initiatives

A.1 Accelerate participation in ongoing Innovation initiatives A.2 Expand Industry-Specific Physical and Digital Sandboxes

Call to Action Time to Call to Action Time to

Low High
Impact Impact
• Universities and Academic Institutions • Central and State Government
• Government / PSU initiatives • Universities and Academic Institutions
Criticality to Criticality to
• Industry Associations Ecosystem Med • Industry Associations Ecosystem High

Action Items:
Action Items:
Research and identify critical and regulated industries (like defence, transportation, financial
Research and identify specific innovation clusters and ongoing initiatives in areas such as services, healthcare, and smart cities) where physical and digital sandboxes can be most
cybersecurity, AI, quantum, semiconductor, web3, and automotive effective in attracting intelligent entrepreneurs and promoting innovation.
Engage with academia, corporate, and start-ups to understand their needs and challenges Develop a plan to expand industry-specific sandboxes, including identifying potential sources
and how coordinated and comprehensive support can help them succeed of funding and resources.
Define current baseline for each initiative across key parameters - # of participants, activity Engage with start-ups, academia, and industry experts to understand the needs and
level of each participant and value-derived by each participant challenges of these industries and how sandboxes can help them solve underserved and core
Develop a plan to accelerate participation in innovation clusters and ongoing initiatives, challenges.
including – identifying proactive marketing, common repository of initiatives Review and select start-ups to participate in industry-specific sandboxes based on their
Create a streamlined process for interested entities to identify initiatives, finalize participation, potential for impact and the identified needs and challenges of these industries.
with reduced paperwork – a single-window approach to enable 1-to-many collaborations Provide funding and other resources to supported start-ups and offer ongoing support to help
Monitor the progress of supported start-ups and use the identified impact metrics to measure them succeed.
the success of the program Monitor the progress of supported start-ups and use the identified impact metrics to measure
the success of the program.

Impact Metrics: Impact Metrics:

Increase in the number of start-ups actively leveraging innovation clusters / initiatives Increase in the number of start -ups participating in industry-specific sandboxes
Improvement in the ranking of specific initiative in national ranking system Improvement in the recognition of India as a global leader in critical and regulated industries
Improvement in the recognition of India as a global innovation hub Increase in the number of innovative solutions developed in these industries
Accelerating revenue growth through structured and strategic interventions

B.1 Institutional Support for Start-ups to win Global Markets B.2 Significantly Increase Public Procurement Targets

Call to Action Time to Call to Action Time to

Med Med
Impact Impact
• Industry Associations • Central and State Government
• Central and State Government Criticality to • Public Sector Units Criticality to
Med Med
Ecosystem Ecosystem

Action Items:
Action Items:
Identify key business hubs being targeted by Indian B2B start-ups – especially in North Review and assess the current spend targets for public procurement in order to identify
America, Europe and South-East Asia. opportunities for increase, and define targets for each ministry, body and PSU.
Set up co-working and co-living space in these business hubs specifically for start-ups Develop a plan to significantly increase spend targets for public procurement, taking into
building SaaS solutions for global markets. account the needs and capabilities of start-ups in India.
Deploy dedicated full-time teams to build local network and brand for Indiaʼs Ease norms and streamline the process for public procurement to make it more accessible
technology-led businesses. and efficient for start-ups.
Offer networking and other support services to help start-ups build relationships and tap Promote the use of the Government e-Marketplace (GeM) among start-ups as a way to sell
into global markets. their products and services to government departments.
Measure the impact of the program on the number of start-ups successfully tapping into Monitor the number of start-ups registered on GeM and the amount of public procurement
global markets and the reduction in time-to-revenue. from start-ups to measure the impact of the program.
Use the success of the program as a marketing tool to attract more start-ups to the Use the success of the program as a marketing tool to attract more start-ups to participate
program. in public procurement.

Impact Metrics: Impact Metrics:

Increase in the number of start-ups successfully tapping into global markets Increase in the number of start-ups registered on the Government e-Marketplace (GeM)
Reduction in time-to-revenue for start-ups Increase in the amount of public procurement from start-ups, including PSUs
Reduction in Customer-Acquisition-Cost for start-ups, relative to direct independent efforts Improvement in the process for public procurement for start-ups
Additional and specific support for start-ups focusing on critical sectors

B.3 Special Investment Fund for Start-ups Building for SDG B.4 Provide Institutional Support for Solving Bharat Challenges

Call to Action Time to Call to Action Time to

Med High
Impact Impact
• Central and State Government • Corporate CSR
• Angel Networks / VCs Criticality to • Universities and Academic Institutions Criticality to
• Corporate CSR High High
Ecosystem Ecosystem

Action Items:
Action Items:
Research and identify potential sources of funding for the special investment fund. Research and identify the most pressing Bharat challenges that start-ups in India's cities
Develop a plan for the special investment fund, including criteria for selecting start-ups to and towns are addressing or could address.
receive funding and a process for disbursing funds. Engage with start-ups in India's cities and towns to understand their needs and challenges
Define policies, regulations and process to enable contribution of CSR founds from and how institutional support can help them succeed.
corporates. Research and identify the gaps in current co-working, incubation and acceleration
Establish partnerships with organizations and institutions working on SDG goals to identify initiatives in the specific regions.
start-ups in need of funding. Develop a plan to enable existing institution to support start-ups focused on solving these
Review and select start-ups to receive funding from the special investment fund based on the challenges, including identifying potential sources of funding and resources.
established criteria. Review and select start-ups to provide funding and other resources to selected start-ups
Disburse funds to selected start-ups and provide ongoing support and resources to help and offer ongoing support to help them succeed.
them succeed. Monitor the progress of funded start-ups and use the identified impact metrics to measure
Monitor the progress of funded start-ups and use the identified impact metrics to measure the success of the program
the success of the program.

Impact Metrics: Impact Metrics:

Number of start-ups receiving funding from the special investment fund Improvement in the scalability and sustainability of start-ups building solutions for SDG goals
Number of investors (VC/PE) with dedicated focus on SDG theme Increase in the number of start-ups solving Bharat challenges
Improvement in the scalability and sustainability of start-ups supported by the initiative Improvement in the support ecosystem for start-ups in India's cities and towns
Reducing talent demand-supply gap for experienced and new professionals

C.1 Attracting Overseas Indian Tech Talent C.2 Redefining University Education to be Outcome-Driven

Call to Action Time to Call to Action Time to

Low Med
Impact Impact
• State Government • Central and State Government
• Industry Associations Criticality to • Universities and Academic Institutions Criticality to
High • Industry Associations High
Ecosystem Ecosystem

Action Items:
Action Items:
Research and identify targeted sectors (quantum, web3, cybersecurity, Health Tech, Research and identify successful outcome-driven education models being used by EdTech
Fintech, and Enterprise tech) where local talent may be limited in terms of exposure and start-ups in India.
experience. Engage with universities and academic institutions to promote the adoption of
Prioritize target countries for sourcing candidates based on the availability of tech talent in outcome-driven education models in existing programs, particularly in deep-tech fields.
targeted sectors and the potential for success of the program. Provide resources and support to universities and academic institutions to help them
Develop a targeted marketing campaign to promote the "Return to India" program to Indian implement outcome-driven education models.
tech professionals in prioritized countries. Create a streamlined process for interested start-ups and students to apply to the new
Create a streamlined process for interested start-ups and professionals to apply to the programs / initiatives.
program. Measure the impact of the program on the placement performance to gauge employability
Track the number of Indian tech professionals attracted through the program and measure of graduates and the talent demand-supply gap.
the impact on the quality and experience of the local talent pool in targeted sectors. Use the success of the program as a marketing tool to attract global firms to invest in India.
Monitor the success rate of start-ups in targeted sectors to measure the overall impact of
the program.

Impact Metrics: Impact Metrics:

Number of Indian tech professionals attracted through the program Number of universities and programs implementing an outcome-driven education model
Increase in the quality and experience of the local talent pool in targeted sectors Increase in the employability of graduates, particularly in deep-tech fields
Improvement in the success rate of start-ups in targeted sectors Increase in the participation of employers in the program
Improve odds of success for top and middle of-the-funnel

D.1 Leveraging Incubators to Support Unfunded Start-ups D.2 Accelerate Deployment of CGSS to Support Start-ups

Call to Action Time to Call to Action Time to

Low Low
Impact Impact
• State Government • Central and State Government
• Industry Associations Criticality to • Universities and Academic Institutions Criticality to
High • Industry Associations High
Ecosystem Ecosystem

Action Items:
Action Items:
Engage with unfunded start-ups to understand their needs and challenges and how AIC/TBI Review and assess the current deployment of CGSS in order to identify opportunities for
intervention programs can help them succeed. acceleration.
Develop a plan for AIC/TBI intervention programs that provide non-equity support to Develop a plan to accelerate the deployment of CGSS, including identifying potential
unfunded start-ups, including identifying potential sources of funding and resources. sources of funding and resources.
Review and select unfunded start-ups to participate in TBI intervention programs based on Engage with start-ups, banks, non-banking financial companies, and SEBI registered
their potential for impact and the identified needs and challenges. alternative investment funds (AIFs) to understand the needs and challenges of the program
Provide non-equity support and guidance to supported start-ups on how to use their and how it can be improved.
resources more efficiently. Review and select start-ups to receive collateral-free funding through CGSS based on their
Monitor the progress of supported start-ups and use the identified impact metrics to potential for impact and the identified needs and challenges.
measure the success of the program. Provide funding and other resources to supported start-ups and offer ongoing support to
Use the success of the program as a marketing tool to attract more unfunded start-ups to help them succeed.
participate in AIC/TBI intervention programs. Monitor the progress of supported start-ups and use the identified impact metrics to
measure the success of the program.

Impact Metrics: Impact Metrics:

Number of unfunded start-ups receiving non-equity support through TBI intervention programs Increase in the number of start-ups receiving collateral-free funding through CGSS
Increase in the survival rate of participating start-ups beyond 12 months Improvement in the accessibility and efficiency of the CGSS program
Improvement in cashflow of participating start-ups Increase in the growth and success of start-ups receiving funding through CGSS
Note for the Readers
Methodology

This report has been co-developed by NASSCOM and ZINNOV through a comprehensive study to understand the Technology Start-up
Landscape in India.

This report analyses the following –

• Current scenario and emerging trends that define the Indian start-up ecosystem
• India’s position as a global start-up hub that is becoming attractive for investors, start-ups & corporates
• Role played by Ecosystem enablers like Incubators/Accelerators, Govt. policies in nurturing the start-up ecosystem

Data Aggregation Interviews / Discussions RESEARCH TEAM

Zinnov Data
150+ Surveys and Interviews with
industry participants (founders, investors,
enablers, policymakers)
NASSCOM Data
• Sangeeta Gupta • Keerthi Shree
Secondary Research • Achyuta Ghosh • Lavanya BG
• Nirmala Balakrishnan • Aditya Gopalakrishnan
• Start-up Indiahub • Cbinsights • Times of India
• Crunchbase • Quartz • Economic Times • Ashish Gupta • Aman Saraswat
• LinkedIn • Financial Express • Medium • Atit Danak
• Techcrunch • Forbes • Factor Daily
• Inc42 • Business Standard • Yourstory
• The Ken • Livemint • CapTable
Definition of a tech start-up

START-UP: An entity working towards innovation, development, deployment, and commercialisation of

new products, processes, or services driven by technology or intellectual property

01 02 03 04
Age: 10 YEARS Origin: INDIA Differentiator: Innovation Stage: Protype +

Active technology product / Founders of Indian origin, Innovation in technology, The start-up must have at least
platform companies incepted in with HQ or core product business process or business a prototype or MVP; Idea stage
the last 10 years (in 2012 or later) development in India model being executed at speed start-ups not considered

Note: This report is based on analysis for technology companies founded between 2012-22, until and unless specified otherwise.
Definition of industry verticals

B2B Product companies targeting Horizontal solutions for Large Enables financial services, banking and insurance through technology
Enterprise Enterprises / SMBs E.g. Online Banks, Financial Management Apps, Payment
E.g Data Analytics/AI/ML Platforms, Development Platforms, BFSI Management Platforms, Alternative Lending Platforms, Money
Tech Collaboration tools Productivity Applications, Customer Services, Big Transfer Platform, Expense Management, Investment Platforms,
Data/Cloud/Security Infrastructure, etc. Cryptocurrency & Trading Platforms, etc.

Provides technology platform for solving Healthtech problems Provides learning solutions & services through technology
E.g. Medical Solutions, Marketplace for Health Services, Health Lab E.g. Learning Apps, Test Preparation Tech, Education Advisory
Health Tech EdTech Platform, K-12/Higher education platforms, Language Learning
Aggregators, Online Pharmacies, E-Diagnostics, Ambulance
Aggregator, etc. Platforms etc.

Tech companies engaged in supporting the travel and hospitality

Tech-enabled companies supporting Human Resources Activities Travel and industry
HR-Tech E.g. Applicant Tracking systems, HR Management System,
Candidate Assistance & Sourcing, Recruitment Marketplaces, etc. Hospitality E.g. Hotel Booking Services, Travel Planning, Travel Packages Portal,
Travel Collaboration Community, etc.

Companies involved in production, manufacturing, sales and services Tech-enabled companies providing simplified Transportation services
of motorised vehicles to users
Automotive Mobility
E.g. Electronic Engineering, System Integration, Automotive E.g. Car pooling, Self Drive Rentals, Two-wheeler taxi aggregators,
Maintenance, Electric Vehicles, Automotive marketplaces, etc. Mass Transit, Tech Enablers.

Companies enabling Sales of goods and product online or Integration

Tech-enabled companies supporting Real Estate, Property of tech in offline markets
Real Estate & Management & Construction industry Retail and E.g. Products/Services cutting across several verticals -. Fashion &
Construction E.g. Construction design tools, Building Technology, Real Estate Retail Tech Lifestyle Marketplaces, Online grocery & Home essentials platforms
Management, Security, Smart Home & cities enablers. .Also includes Retail enablers, B2B marketplaces, Social commerce
platforms, Rental platforms etc.

Source: Zinnov CoNXT Research and Analysis

Definition of industry verticals

Engaged in manufacturing of tech-enabled devices or machines;

Industrial and Tech-enabled companies supporting the Food-tech industry
Construction/Mining sector, etc.
E.g. IoT based Predictive Maintenance of Machines, 3D Printing
Food-tech E.g. Online Food Ordering, Restaurant Management Cloud Solutions,
Manufacturing Food Discovery Platform.
(Manufacturing).

Provides content for entertainment across the web and mobile Enabling tech in logistics services and supply chain management
Media and medium SCM and E.g. Logistics and Distribution Platform, Fleet Management,
Entertainment E.g. News & Media Apps, Live Streaming Apps, News Platforms, OTT Logistics Warehousing, IoT Platform for Logistics, IoT Platform for Goods
Content, Video Intelligence Apps, etc. Transportation Marketplace, etc.

Start-ups engaged in tech enablement in the Agricultural Industry Tech Innovation and facilitation in the Gaming Industry
Agri-Tech E.g. Field Surveillance, Precision Agritech, Farm infrastructure, Soil Gaming E.g. AR/VR Gaming, Community platform Games, Fantasy Gaming
Testing, Farm Input E-Commerce etc. Platforms etc.

Aviation, Tech-based companies supporting the Marine, Defence and Aviation

Tech-based companies for Legal help to Individuals/Corporates
Industry
Maritime & Legal Tech E.g. Contract Management, Brand Protection and Anti Counterfeit,
E.g. Military Drones, Green Propulsion Systems developers, Sensors
Defence Legal Services Discovery/Booking marketplaces, etc.
and Platforms for security applications etc.

Energy & Tech Enablement for Natural Resource Management and Utilisation Provides direct advertising and marketing assistance through
E.g. Renewable Energy products, Recycling of Resources, Energy Advertising & technology
Utilities Production and Distribution, EV charging Infrastructure etc. Marketing E.g. Content marketing, influencer marketing, Push notifications etc.

Source: Zinnov CoNXT Research and Analysis

Definition of industry verticals

Includes Hardware, Software solutions for security and surveillance

Professional Tech-enabled companies providing concierge services Security and applications in Home, Enterprise and Govt institutions
E.g. home repairs, auto servicing, on-demand laundry, matchmaking
Services platforms etc. Surveillance E.g. Video surveillance softwares/platforms, Biometric systems, home
security products etc.

Includes solutions for sports industry Solutions for assisting Events industry
Sports Tech E.g. offline sports booking of the sports arena, sports content Events Tech E.g. Event Discovery, Booking Platform, Event Management Solutions.
platforms, player management, and performance analysis.

Startups associated with physical and mental wellness

Fitness and E.g. emotional, mental wellness solutions, apps for physical fitness Tech based solutions in life science
Life Sciences
Wellness (bookings, home fitness assistance), marketplaces for nutrition E.g. Genomics- DNA/Protein Sequencing, etc.
supplements, wellness products – women's hygiene etc.

On premise or cloud-based products & solutions which detect,

Companies providing products/services to assist telecom sector
prevent and respond to cyberthreat to organizations or consumers.
Telecom E.g. infrastructure enabling the delivery and transmission of telecom Cybersecurity E.g. Network Incident Response/Intrusion Detection solutions, Identity
services, Cloud Telephony, etc.
Access Management solutions, VPNs etc.

Online platforms that provide a medium for individuals or businesses

Environment Technology for environment preservation or green technology Social to connect, network, interact, share multimedia content, or seek
E.g. Tech solutions for air pollution, solid/water waste management, collaboration opportunities with other individuals or businesses
Tech recycling solutions, climate monitoring etc. Platforms E.g. Social networking sites, professional networking sites, online
communities, blogging platforms, etc.

Source: Zinnov CoNXT Research and Analysis

Other key definitions

Unicorn
Unicorns are privately held entities with valuation of over  1 Bn. They include companies serving D2C markets. Start-ups that have not been included
in the unicorn analysis:
• Holding companies like Globalbees and Mensa Brands.
• Unicorns that have raised IPO: Freshworks, Nykaa, Paytm, PolicyBazaar, Zomato, Delhivery
• Unicorns that been acquired or merged: BigBasket, Billdesk,Grofers, Shopclues, RenewPower, Flipkart
• Unicorns that have either devalued or shutdown: Snapdeal, Hike, Quikr, Paytm Mall

Institutional Investors
Institutional investors include Venture Capital firms, Private Equity Firms and Corporate investors
Seed and Angel funding rounds Series A & B funding rounds raised Series C and beyond funding rounds
Seed Stage Early Stage Late Stage
raised by Indian tech company by Indian tech company raisedby Indian tech company

Corporate Incubator
A fixed term, 6-24 month long, cohort-based program for pre-seed start-ups typically focused on Horizon 2 and Horizon 3 opportunities. Invariably, these are
equity-based programs for corporates to get early access to large pool of ideas/solutions.

Corporate Accelerator
A fixed term, 3-6 month long, cohort-based program for pre-growth and growth stage start-ups. During program, the emphasis is on building proof-of-concepts
and/or on integrations to determine on long-term engagement.

Partner Program
A requirement-based program, where corporate business units define problem statements that they are looking to solve, and partner with growing, mid, or late-stage
start-ups to build complimentary solutions in exchange for a financial commitment .

Source: Zinnov CoNXT Research and Analysis

Disclaimer

The information contained herein has been obtained from sources believed to be reliable. NASSCOM and its advisors & service providers disclaims all warranties as to the
accuracy, completeness or adequacy of such information. NASSCOM and its advisors & service providers shall have no liability for errors, omissions or inadequacies in
the information contained herein, or for interpretations thereof. The material or information is not intended to be relied upon as the sole basis for any decision which may
affect any business. Before making any decision or taking any action that might affect anybody’s personal finances or business, they should consult a qualified
professional adviser.

Use or reference of companies/third parties in the report is merely for the purpose of exemplifying the trends in the industry and that no bias is intended towards any
company. This report does not purport to represent the views of the companies mentioned in the report. Reference herein to any specific commercial product, process
or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by NASSCOM
or any agency thereof or its contractors or subcontractors.

The material in this publication is copyrighted. No part of this report can be reproduced either on paper or electronic media without permission in writing from NASSCOM.
Request for permission to reproduce any part of the report may be sent to NASSCOM.

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About the Authors

NASSCOM is the industry association for the technology sector in India. A not-for-profit organization funded by the industry, its objective is to build a growth-led and sustainable
technology and business service sector in the country with over 3,000 members . NASSCOM Insights is the in-house research and analytics arm of NASSCOM generating insights and
driving thought leadership for today’s business leaders and entrepreneurs to strengthen India’s position as a hub for digital technologies and innovation.
NASSCOM is focused on the development of the technology sector through policy advocacy and setting up the strategic direction to dominate new frontiers.

Founded in 2002, Zinnov is a leading global management and strategy consulting firm, with presence in New York, Seattle, Santa Clara, Houston, Bangalore, Gurgaon, Paris, and Pune.
Over the last 20 years, Zinnov has successfully consulted with 250+ Fortune 500 enterprises and technology companies to develop actionable insights that help them create value –
across dimensions of both revenue and optimization. With core expertise in Product Engineering, Digital Transformation, Innovation, and Outsourcing Advisory, Zinnov assists clients by:
• Helping global companies outline and drive their open innovation programs, design and operate accelerator programs, and enable collaboration with cutting-edge technology start-ups
across specific use cases and predefined outcomes;
• Enabling global companies to develop and optimize a global engineering footprint through center setups, and technology and functional Centers of Excellence (COEs) to achieve higher R&D
efficiencies, innovation, and productivity;
• Tracking and orchestrating network effects within the larger GCC/GCoE ecosystem by enabling partnerships and real-time data and insights – through GCoE Accelerator Platform (GAP);
• Advising global PE firms in asset shortlisting and target evaluation, commercial due diligence, and value creation;
• Facilitating inorganic growth opportunities for global companies through Mergers & Acquisitions by asset shortlisting, target evaluation, commercial due diligence, and value creation;
• Growing revenue for companies’ products and services in newer markets through account intelligence, market entry, and market expansion advisory;
• Structuring and implementing Digital Transformation levers enabled by technologies like AI/ML, Cloud, IOT, and Intelligent Automation.

With their team of experienced consultants, subject matter experts, and research professionals, Zinnov serves clients from across multiple industry verticals including Enterprise Software,
BFSI, Healthcare, Automotive, Retail, and Telecom in the US, Europe, Japan, and India.

For more information, visit www.zinnov.com

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