India's start-up culture concentrated in a few states: RBI survey

A survey on start-ups by the Reserve Bank of India (RBI) has found that India’s start-up culture is concentrated in a few states, and that most of these emerging firms took shape in the past three years, taking funds from family and friends. The survey was conducted during November 2018 and April 2019 with 1,246 start-up participants.
 
“Nearly three-fourths of the participants were from Karnataka, Maharashtra, Telangana, Delhi, and Tamil Nadu, indicating large concentration of the start-up sector in India in a few states,” the RBI’s pilot survey on Indian start-up sector revealed.
 
Nearly half of the start-ups were from six sectors — agriculture, data and analytics, education, health, IT consulting/solution, and manufacturing. The respondents said there was market or industry demand, both in domestic and international markets, for the services and products they would provide.
 
The annual turnover for over one-fourth of the respondents was up to Rs 10 lakh, whereas around 20 per cent start-ups did not report any revenue generation. Less than one-fifth of the respondents reported that their turnover exceeded Rs 1 crore.
 
Around 43 per cent of the start-ups mobilised funding from families and friends, apart from own funds. About 13 per cent of the start-ups received international funding. Only 1.7 per cent of the start-ups availed of external commercial borrowings.
 
Over three-fourth of the start-ups had up to Rs 1 crore of capital investment, whereas around 41 per cent infused capital up to Rs 20 lakh each. On the other hand, nearly 5 per cent start-ups infused capital above Rs 10 crore each. Nearly three-fourth of the start-ups had working capital requirement of more than Rs 10 lakh a year.