India fastest-growing ecosystem for IT start-ups, says Nasscom study

India has emerged as the third-largest start-up 'ecosystem' in the world after the US and the UK – and is moreover the fastest-growing, according to information technology body National Association of Software and Services Companies.

Nasscom's India Start-up Report 2014 also says India is poised to see rapid growth in the number of product start-ups that will be operational by 2020. At present, there are around 3,100 start-ups in India, and this is expected to grow to 11,500 by the end of 2020.

Major cities such as Bangalore, Delhi-NCR, Mumbai, Hyderabad, Pune and Chennai account for 90 per cent of the start-up activity.

 ''The Indian start-up ecosystem is rapidly evolving driven by extremely young, diverse and inclusive entrepreneurial landscape. An additional driving force is a four-fold increase in access to capital through VCs, angel investment and seed funding for the Indian entrepreneurs,'' said Nasscom President R Chandrashekhar.

The Nasscom report says the rapid growth in start-up will create an employment for around 250,000 people by 2020 as against the current 75,000.

The study says that in the last five years there were more than 70 VC/PE (venture capital/private equity) firms with investment worth over $2 billion in the Indian start-up ecosystem.

According to Nasscom data, there were over 20 merger and acquisition deals worth $ 1billion in the last three years.

The presence of more than 80 business incubators and accelerators providing seed stage support to start-ups is also another major reason for the growth of start-ups in the country, the study says.