BENGALURU: Karnataka  has emerged as a top performer, along with Kerala, in providing a strong ecosystem for startups, according to the startup ranking-2019 of states and Union Territories, released by the Department of Industry and Internal Trade (DPIIT) on Friday. The second edition of the ranking lists Gujarat (among states) and Andaman & Nicobar Island (UTs) as the best performers with 100 percentile score. The state-wise performances were evaluated on seven parameters including institutional support, easing compliances, relaxation in public procurement norms, incubation, seed funding and venture funding support, awareness and outreach. A total of 22 states and three UTs participated in the exercise. The other states were classified as leaders, aspiring leaders and emerging startup ecosystems.

NE states mark their startup presence

Amongst  them, Bihar, Maharashtra, Odisha, Rajasthan, Chandigarh were classified as leaders, Haryana, Jharkhand, Punjab, Telangana, Uttarakhand as aspiring leaders and Andhra Pradesh, Assam, Chhattisgarh, Delhi, Himachal Pradesh, Uttar Pradesh, Madhya Pradesh and Sikkim as emerging startup ecosystems. Amongst the UTs, Chandigarh was declared as a leader, Nagaland as an aspiring leader and Mizoram and Sikkim in the emerging startups ecosystem category. With the simplification of regulations at the central and state levels, startups in the country are increasingly registering with the DPIIT which has seen an addition of 8,550 such companies during the Covid pandemic alone.

Currently, every state has a startup registered with the government, taking the number of such new-age firms to 36,550 across 580 districts in the country. India’s vibrant startup ecosystem, the third largest in the world, is well on its way to have 95 unicons (with over $1 billion valuation) by 2025, a three times increase from the current number, with an overall valuation of $390 billion, according to the DPIIT report. India’s potential $1 billion newage firms are likely to be in sectors such as e-commerce, software- as-a service (SaaS), fintech, renewable energy, logistics, etc.

Furthermore, with the adoption of advanced technology and increasing market capitalisation, the time taken for a startup to mature into a unicorn has significantly decreased from 12 years in 2010 to two years in 2015-2019, the report added. Overall, the sector attracted $50 billion in funding between 2014-2019.