The year 2015 saw an 87 per cent increase in the number of startups being founded, the number dropped by 67 per cent in 2016.
The Startup India campaign aimed at boosting entrepreneurship marks its first year anniversary January 16 but it has not yet rendered the desired results. The year 2015 saw an 87 per cent increase in the number of startups being founded, the number dropped by 67 per cent in 2016. Funding also slumped in 2016 by around 47.7 per cent. At least 800 start-ups founded after 2011 have shut shop, signalling a deteriorating health of the sector, according to data analyst firm Tracxn Technologies.
Startups such as Peppertap, BeStylish, Fashionara and Localbanya form a part of the Deadpool List, a catalogue of dead or dying startups compiled by Traxcn. Until 2015, startups in the country were consistently growing because of the government’s promises on funds, assistance hubs and tax relaxation.
Moreover, the Startup India initiative had received only 1,368 applications by mid-December last year, of which only 502 were recognised as startups by the Department of Industry Policy and Promotion (DIPP). “The decline was ironical,” said Praveen Chakravarty, co-founder of Mumbai Angels, an angel investment group. “Just after the government launched a Startup India initiative on January 2016, investments into startups dropped and therein lies a lesson.”