Indian Startup Ecosystem - Traversing The Maturity Cycle PDF

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FOREWORD
India has witnessed an phenomenal progress of the technology start-up ecosystem in the last 10 years. The period was marked by the
inception of several thousands of start-ups, rise of unicorn companies with a total current market valuation of over US$ 32 Bn and the
emergence of category leaders in areas of Robotics, Analytics, Edu-tech, Health-tech, Fin-tech, etc. In 2017, the start-up base in India is
expected to cross 5000 with a 7% net growth from 2016. The number of new start-ups is likely to come down from 1400+ in 2016 to 1000+
in 2017 as entrepreneurs pivot their business models and explore untapped opportunities.
Multiple indicators point that the Indian start-up ecosystem is traversing the maturity cycle. There has been impressive traction in the B2B
space with almost 50% of the new start-ups in 2017 in this segment, up from 34% last year. Number of new additions of Advanced
R Chandrashekhar Technology start-ups is also witnessing a five-year CAGR of over 30%.
President, NASSCOM
Indian ecosystem continued to remain attractive for investors with almost US$ 6.4 Bn of funding in first half of 2017 demonstrating 167%
growth over H1 2016. Unicorn funding took centre stage with big deals announced in the year. Foreign investors formed a significant share
of the investor mix and non-US investors expanded their investments in Indian start-ups as well.
In addition, the start-up ecosystem also witnessed the mushrooming of a significant base of start-ups building solutions for India centric
grass root level problems. 325+ such start-ups are currently solving challenges in Healthcare, Education Inclusion, Financial Inclusion, Clean
Energy, Agriculture etc.
The fourth edition of the NASSCOM-Zinnov report titled “Indian Start-up Ecosystem – Traversing the Maturity Cycle – 2017” is a
compilation of facts, trends, and insights on the Indian tech start-up landscape. The report examines the evolution of the ecosystem, its
growth drivers, and highlights the role played by investors, incubators/ accelerators, and the government.
Pari Natarajan
CEO, Zinnov We hope this report is useful to you and we welcome your feedback and comments at research@nasscom.in
Mr. Pari Natarajan Mr. R. Chandrashekhar

CEO, Zinnov President, NASSCOM
3
ACKNOWLEDGEMENT
This report has been co-developed by NASSCOM and ZINNOV MANAGEMENT CONSULTING through a comprehensive three-month study to understand the
Technology Product & Digital Start-up Landscape in India.
The preparation of this report has been facilitated by a number of organizations and people who have extended great help to the research team. We wish to
sincerely thank all of them for their valuable contributions without which this report would not have been possible. Mentioned below are the names of the
industry experts who provided insights for the report, along with the research team members that developed this report.
INDUSTRY EXPERTS
Ajeet Khurana (Angel Investor /
RESEARCH TEAM
Gaurav Gupta (Unilever) Sameer Verma (NexusVP)
Mentor)
Alex Prather, Srikrishna Ramamoorthy
Harsh Vaidya (Pitney Bowes) Sanjay Vijayakumar (Start-up Village)
(Unitus Seed fund)
Anil Chhikara (Marcopolo Ventures) Lalit Ahuja (ANSR) Seetharaman Venkatraman (Soc Gen)
Mukesh Malik, Abhijeet Kumar (Ah! • Sangeeta Gupta
Ankush Grover (Innov8) Shivam Ahuja (Delhi Angels)
Ventures) • Rakesh Kumar
Apul Nahata (Brigade Reap) Murali Nandigama (Goldman Sachs) Shubhankar Bhattacharya (Kae Capital) • Manishree Bhattacharya
Ashish Fafadia, Dhanasree Molugu
Naveen Asrani (Microsoft) Simi Joshi (Oracle)
(Blume Ventures)
Ashish Taneja (GrowX Ventures) Nitish Agrawal (SAP) Sunil K Goyal (Yournest)
• Praveen Bhadada
Avnish Sabharwal (Accenture) Padmaja Rurapel (IAN) Tata Elxsi
• Nischay Mittal
Paul Justin, Anzy Mohammed (SAP Veera Manikandan Raju (Texas • Abhijeet Gogoi
Ayush Srivastava (Amazon)
Start-up Studio) Instruments)
• Jasleen Kaur
Poyni Bhatt (Sine IITB (Society for
Bharat Ravuri (ex-IHS Markit)
Innovation and Entrepreneurship))
Venkataraman Seetharaman (Socgen) • Neha Jagadeesh
Biten Kathrani (Boston Scientific) Rajesh Dhuddu (Quatrro)
Brij Bhasin (Rebright Partners) Rajiv Vaishnav (Reliance GenNext Hub)
4
WHAT IS A START-UP AS PER OUR DEFINITION?
Start-ups: Intellectual Property (IP) backed technology product/platform; eCommerce/ aggregators using digital
platform for customer engagement
Companies incorporated in the One or more Founding Company headquartered in IP-backed technology
last five years members should be of Indian India OR outside with product product OR technology
origin development centre largely in
platform OR eCommerce OR
India
Aggregators considered
5
EXECUTIVE SUMMARY
India Start-up Landscape 2017
QUICK FACTS1
5000-5200 Total tech start-ups in 2017 | Up by 7% YoY Slow-down in new start-up addition, as focus shifts
START-UP BASE2 5,000
1000 #–of5,200
new start-up additions in 2017 | Down by 29% YoY to quality
Tier 1 cities8 continue to form the lion share (~80%)

START-UP HOTSPOTS Bengaluru, Delhi NCR & Mumbai form 68% of start-up base | Up by 7% YoY
5,000 – 5,200 of the overall start-up base
BUSINESS FOCUS3 B2B start-ups

5,000 – 5,200 form 40% of the overall start-ups | Up by 16% YoY B2B start-ups continue to gain prominence
$1.8 Bn Funding raised by start-ups so far in H1 2017 | Down by 14% Cautious investors shifting money from Seed Stage
FUNDING ANALYSIS4 5,000 – 5,200
$6.2 Mn Average funding per funded start-ups | Up by 7% to Early/Growth Stage
44% Foreign investors among 500+ active investors in H1 2017 Increasing traction from Foreign Investors, esp.
INVESTOR MIX3 5,000
Non-US–forms
5,200
45% of foreign investor mix from non-U.S. geos
Aggregators / eCommerce: $1.1 Bn funding | Up by 22% Investors continue to remain bullish on Aggregators
VERTICAL FOCUS3 5,000 – $200
5,200Mn funding | Up by 135%
Fin-Tech: / eCommerce and Fin-Tech verticals
Key focus on Analytics, Artificial Intelligence and
ADVANCED TECH FOCUS5 700+ Advanced
5,000 – 5,200Tech start-ups | 30%+ CAGR for new start-up additions since 2012 Internet of Things
START-UPS SOLVING Rise of new breed of start-ups solving key India
325 Start-ups
5,000 – 5,200 focused at solving core India problems | Up by 18% YoY
SOCIAL PROBLEMS6 problems
20-25% overall mortality rate B2B start-ups more likely to survive vis-à-vis B2C
MORTALITY ANALYSIS7 5,000 – 5,200
Further reduction in share of B2B in failed start-ups from 36% in 2016 to 30% in 2017 start-ups
INCUBATORS /
190+ active
5,000 Incubators/Accelerators | Up by 36% YoY
– 5,200 Continued growth of Incubators / Accelerators
ACCELERATORS
Note: 1 Growth and de-growth %ages are for H1-2017 over H1-2016 (unless specified otherwise); 2 Start-up numbers for 2017 estimated based on analysis of data for Jan – Jul’2017 period; 3 Extrapolated based on analysis of 2100+ start-ups
formed over 2012-2017 period; 4 Analysis of funding data for H1-2017; 5 Includes Analytics/Advanced Analytics, Artificial Intelligence, IOT, AR/VR, Robotics, 3D Printing, Blockchain; 6 Start-ups working to solve India problems such as Clean 6
Energy, Agriculture, Education Inclusion, Healthcare, Financial Inclusion, etc.; 7 Mortality rate incl. analysis done for start-up mortality across 5 Years (2012-2017); 8 Includes Delhi NCR, Mumbai, Bangalore, Kolkata, Hyderabad, Chennai
DEEP-DIVE AGENDA
India Start-up Landscape 2017
This report analyzes –

OBJECTIVE OF  Current scenario and emerging trends that define the Indian start-up ecosystem
REPORT  India's position as a global start-up hub that is becoming attractive for investors, start-ups & corporates
 Role played by Investors, Incubators/Accelerators, Government of India, and Corporates in nurturing the start-up ecosystem
1 2 3 4 5
CLOUD & START-UPS
START-UP FUNDING M&A
ADVANCED TECH SOLVING SOCIAL
LANDSCAPE ANALYSIS ANALYSIS
FOCUS PROBLEMS
6 7 8 9 10
GOVERNMENT SUCCESS
MORTALITY INCUBATORS / ROLE OF
FOCUS FOR STORIES
ANALYSIS ACCELERATORS CORPORATES
START-UPS
7
PROMINENT START-UPS OF THE YESTERYEARS (LAST 10 YEARS)
LANDSCAPE
Over the past 10 years, India has seen inception of several prominent start-ups projecting tremendous growth stories
2.3X Revenue Raised over $155 Unicorns (>$1 Bn Valuation)

80,000+ Daily 15X Revenue
orders processed growth (2016) Growth YoY Mn funding till
7 Mn+ (2017) (2016) date (2017)
Transactions a
Trained over 500K day (2017)
professionals Start-up definition period (Incepted
30 Mn+ (2016) in the last 5 years)
users/month (2017) $200 Mn+
$3 Mn per Revenue in 3
$2.2 Bn Revenue 3X Revenue month in 15K Orders per
(2016) Growth YoY - $84 day (2017) years (2017)
Revenue (2017)
$1 Bn Valuation Mn (2016)
(2017)
55 Mn Users
(2017)
100%+ revenue 100% Revenue 6X Revenue 100%+ Revenue
growth YoY (2017) growth (2016) Growth YoY growth (2016)
$1.5 Bn+ Over 100K
(2016)
Valuation 4x increase in customers
(2015) number of (2017)
32 Mn+ Customer rides (2016)
5000–5200 Total Start-up
visits per month
(2016) 4700–4900 Base1
80% Revenue
growth YoY (2017)
Over 23.7 Mn 4100–4300
total transactions
(2016) 3600–3800
3200–3400
3000–3200
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Inception Year
Note: 1 Start-up base for 2012 and 2013 estimated based on average growth across 2014-2017; Start-up base for 2014, 2015 and 2016 taken from NASSCOM-Zinnov Start-ups reports 8
Source : Zinnov Research & Analysis, CrunchBase, TechCrunch (For Valuations), AngelList, Tracxn, Press Articles, Inc42
START-UP BASE AND GROWTH – 20171
Indian tech start-up base to reach 5000+ in 2017; slowdown in new start-up addition, as founders explore untapped LANDSCAPE
opportunities
Improvement in the quality of start-ups

1000 # of new start-up additions
(2017) • Rise of ‘Verticalized or Specialized’ Aggregators/eCommerce
5000 – 5200 Down by ~29% YoY

•
start-ups
47% B2B start-ups in the new start-up additions in 2017
Total start-up base (2017) 100-105K Total Talent • 15% Advanced Technology start-ups in the new start-up
employed by Start-ups additions (such as Analytics, AI and IoT)
7% growth YoY 5% growth YoY • 18% SaaS start-ups in the overall start-up base
Employee Pyramid – across start-ups incepted from 2012 - 20172
Split of Employee Segments 1% 5% 13%

13% 5%
100+ 16% Consistent growth
50-100 37% in employee base
10-50 54% witnessed as start-
86%
1-10 53% ups attain maturity
17%
Inception Year 2017 Inception Year 2014 Inception Year 2012
Note: 1Start-up numbers for 2017 estimated based on analysis of data for Jan – Jul’2017 period; 2Employee pyramid analysis based on a sample of employees of 2100+ start-ups formed over 2012-2017 period 9
Source : Zinnov Research & Analysis, CrunchBase, AngelList, Tracxn, Start-up India Website, Inc42
GLOBAL START-UP COMPARISON FRAMEWORK
LANDSCAPE
India is now competing with Israel to be the 3rd largest start-up base, while U.S. and UK retain the top two spots
Highest Rating
United
United States
Govt. Focus & Kingdom
Country Specific
Indices
= f [Government China*
Initiatives (Govt.
Policies, Govt.
Funding), Country Israel
Specific Indices India
(Global Innovation
Index, Ease of Doing
Business)]
Lowest Rating
*Size of the bubble

represents the total
number of start-ups in
the geo ASPIRANTS EMERGENTS MAVERICKS
Lowest Rating Start-up Activity Index Highest Rating

= f [Landscape (Total Start-ups, Start-up Per Capita, Acquisitions), Unicorns Analysis, Investors Ecosystem & Funding, Advanced Tech Focus]
* China – unknown territory
Note: Definitions: Mavericks – Evolved countries with mature start-up ecosystem; Emergents – Countries where start-up ecosystem is evolving at a rapid pace aided by increasing investments, Govt initiatives, etc.; since several start-ups and their
Aspirants – Countries where start-up ecosystem is beginning to grow; however, lacks in terms of enablers such as investments, Govt. Initiatives, etc. activities in stealth mode
10
Source : Zinnov Research & Analysis, CrunchBase, AngelList, World Bank Report
GLOBAL START-UP COMPARISON – RELATIVE RATINGS & DEEP-DIVE (1/2)1
LANDSCAPE
While U.S. is a clear outlier, Indian start-up ecosystem showed similarities to Israel and UK
START-UP ACTIVITY INDEX (X-AXIS)

U.S. INDIA UK ISRAEL CHINA
START-UP LANDSCAPE
1
# of start-ups
# of start-ups / capita Israel has the highest start-
up/capita
# of start-up acquisitions
UNICORN ANALYSIS
2 # of Unicorns
Average valuation per Unicorn
U.S. and China top 2 geos. for
Potential Unicorns ($500 Mn+ valuation)
# of Unicorns; India with 2nd
% of Unicorn exits - -
highest average Unicorn
valuation led by Flipkart
INVESTORS ECOSYSEM
# of VC firms
3 # of Angels U.S. has the most active
# of Incubators / Accelerators investor ecosystem; U.S. and
Total funding value (2016) China lead w.r.t. total funding
# of funding rounds (2016) value for start-ups
U.S. - Outlier China – Unknown

(most start-ups in stealth mode)
Note: 1Weightages used for Rating: X-Axis – Start-up Landscape (25%), Unicorn Analysis (15%), Investor Ecosystem (35%), Tech/Advanced Tech Focus (25%); Y-Axis – Govt. Focus & Initiatives (60%), Country Specific Indices (40%)
Legend: 11
Source : Zinnov Research & Analysis, CrunchBase, AngelList, World Bank Report Lowest Rating Highest Rating
GLOBAL START-UP COMPARISON – RELATIVE RATINGS & DEEP-DIVE (2/2)1
LANDSCAPE
India showed progress w.r.t. government initiatives; however, still requires improvement in Global indices
U.S. INDIA UK ISRAEL CHINA
4 TECH / ADVANCED TECH FOCUS

% of Consumer-Tech start-ups (2012-17)2
% of Advanced Tech start-ups (2012-17)
Israel shows the highest % of
Avg. funding for Advanced Tech start-ups
Advanced Tech start-ups
GOVT FOCUS & COUNTRY SPECIFIC

INDICES (Y-AXIS)
1 GOVT. FOCUS & INITIATIVES

Govt. start-up policies & initiatives
Govt. Funding & Investment Though India has shown good
progress in Govt. initiatives, it
2 COUNTRY SPECIFIC INDICES still requires improvement in
Global Innovation Index (GII)3 Global indices3
Ease of Doing Business
U.S. - Outlier China – Unknown

(start-ups in Stealth Mode)
Note: 1 Weightages used for Rating: X-Axis – Start-up Landscape (25%), Unicorn Analysis (15%), Investor Ecosystem (35%), Tech/Advanced Tech Focus (25%); Y-Axis – Govt. Focus & Initiatives (60%), Country Specific
Indices (40%); 2 Consumer-Tech includes Start-ups across Music, Messaging, Social Media, Gaming, eCommerce, Marketplace, Mobile Payments, Lifestyle, Travel & Accommodation, Edutainment, Fitness, Personal
Finance, etc.; 3 Global Innovation Index (GII) is a function of parameters such as ICT services exports, graduates in science and engineering, e-participation, presence of global R&D companies, government’s online
service, general infrastructure, creative goods exports, knowledge impact, and intellectual property payments
Source : Zinnov Research & Analysis, CrunchBase, AngelList, World Bank Report Legend: 12
Lowest Rating Highest Rating
LOCATION ANALYSIS – TIER 1 CITIES1,2,3
LANDSCAPE
Bengaluru, Delhi NCR and Mumbai continue to be the leading start-up hubs, with ~2/3rd of the overall start-up base
TIER-1: ~80%
Bengaluru B2C Hyderabad
79%
B2C 83%
27% B2B 6%
43% B2B 46%
Delhi NCR B2C 87%

Chennai B2C 51%
25% B2B 38%

4% B2B 48%
Mumbai B2C Kolkata

89% B2C 98%
16% B2B 2%
38% B2B 15%
• ~80% start-ups are concentrated in tier 1 Cities

• Chennai & Hyderabad with maximum proportion of B2B start-ups, led by the presence of tech institutions and
GICs4
Note: 1 % represents share of start-ups in a particular city amongst total # of start-ups in India; 2 % within bars represent the B2C/B2B focus of start-ups within each city; 3 Number of Start-ups across cities estimated
based on a sample of 2100+ start-ups incepted between 2012-2017 period; 4Hyderabad and Chennai feature among the top 5 locations for R&D / GIC talent in India 13
Source : Zinnov Research & Analysis, CrunchBase, AngelList, YourStory
LOCATION ANALYSIS – TIER 2/3 CITIES1,2
LANDSCAPE
Promising start-ups also emerging from tier-2/3 cities, which account for 20% of start-up base (up from 16% in 2016)
Promising start-ups across top tier-2/3 cities Other illustrative examples
Inception Year: 2015

Vertical: SCM & Logistics • Currently handles over 100,000 deliveries a day
Pune: 5% Funding Raised: Undisclosed
Inception Year: 2014 • 1000+ loans worth ~$250 Mn disbursed across tier
Vertical: Fin-Tech 2/3 cities
Ahmedabad: 2% Funding Raised: $12.5 Mn • 1 acquisition made – KountMoney (Fin-tech)

Top Tier-2/3 Vertical: Jewellery • Plans to achieve revenue of $75 Mn till 2020 at
Cities Jaipur: 2% Aggregator/eCommerce 70%+ growth (3-year CAGR)
% share of start-ups
in the total start-up Inception Year: 2014
base in India
Vertical: Enterprise Product (Cloud • Acquired 2 companies in 2016 –
Indore: 2% Solutions Provider) DGWHyperloop and Aphelion Labs Pvt. Ltd.

• Witnessed over 100% increase in bookings across
Chandigarh: 2% Vertical: Travel & Hospitality
critical markets such as NCR and Bengaluru

Kochi: 2% Vertical: Edu-tech • ~$65k revenue in 2016, with tie-ups with 64
Entri Funding Raised: Undisclosed institutes, 420 teachers, and 35,000 students
Flipmotion
Note: 1 % represents share of start-ups in a particular city amongst total # of start-ups in India; 2 Number of start-ups across cities estimated based on a sample of 2100+ start-ups incepted between 2012-2017 period,
Source : Zinnov Research & Analysis, CrunchBase, AngelList, YourStory 14
BUSINESS FOCUS ANALYSIS - B2B & B2C
LANDSCAPE
Share of B2B in newly incorporated start-ups (47%) higher than B2B share in the overall start-up base (40%)
B2B v/s B2C focus of start-ups1 B2B v/s B2C focus across verticals2
VERTICALS B2C B2B
B2C B2B Aggregators / eCommerce 92% 19%

2017 73% 40%
TOTAL BASE
5000-5200 13% start-ups both B2B & B2C Enterprise Product 100%
1%
2016 77% 37% 87% 26%

Health-Tech
14% start-ups both B2B & B2C
Fin-Tech 70% 49%

2017 59% 47%
NEW START-UP 6% start-ups both B2B & B2C
ADDITIONS (1000) Food-Tech 98% 8%
B2B share up from 34% in 2016
Sum of B2B, B2C % within a vertical would be higher than 100% due to overlaps
• Share of B2B in newly incorporated 2017 start-ups is 1.2X the share of B2B in the overall start-up base
• Enterprise product emerges as the top vertical for B2B start-ups, followed by fin-tech
Note: 1 Sum total of %ages would be greater than 100% due to overlaps in B2B and B2C start-ups. 13% start-ups had both B2B & B2C focus (in 2017) while 14% start-ups had both B2B & B2C focus (in 2016); 2B2B /
B2C overlaps across verticals: Aggregator/eCommerce (11%); Enterprise Product (1%), Health-tech (13%), Fin-tech (19%), Food-tech (6%), Travel & Hospitality (12%)
Source : Zinnov Analysis, CrunchBase, AngelList, YourStory 15
DEMOGRAPHIC ANALYSIS OF FOUNDERS1
LANDSCAPE
Diversification of talent, with both student and experienced entrepreneurs at the helm
Educational Female
Age Distribution Student Start-ups
Qualification Entrepreneurs
<=25 yrs 20% Engineering 50%

2016 2017
Graduate/PG Male Female
26-30 yrs 31% 350 450+
MBA 25% 2017 89% 11%
31-45 yrs 44%
Total # of student
> 45 yrs 5% start-ups in 2017 2016 90% 10%
Others 25%
Others incl. CA/Financial Diploma, 30% YoY Growth Rate 2015 91% 9%
Median age of founders:
2017 – 32 years | 2016 – 31 years MBBS, BCA/MCA, BA/MA, etc.
50% of start-up founders ~30% growth in student Consistent increase in % of

~50% of the founders are
have Engineering start-ups, driven by growth female entrepreneurs since
more than 30 years of age
background in academic incubators 2015
Note: 1 Analysis based on start-up founder details for a sample of 2100+ start-ups incepted between 2012-2017 16
Source : Zinnov Analysis, LinkedIn, CrunchBase, YourStory, Inc42
OVERALL FUNDING LANDSCAPE – H1 2017
FUNDING
Though Unicorn funding showed an exponential growth, “Start-up” funding reduced in H1 of 2017
Funding for start-ups incepted 2012

onwards – H1 20171 Analysis of funding across stages4
$2.1 Bn $1.8 Bn H1 2016 Funding H1 2017 Funding

H1 2016 H1 2017 -14% $105 Mn $49 Mn
Seed Stage -53% [$0.4 Mn]
# of start-ups funded 2 [$0.4 Mn]
350
H1 - 2016 -17% 290
$168 Mn $307 Mn
# of deals 2,3 360 -17% 300 83%
Early Stage [$2.4 Mn]
[$3.4 Mn]
Average funding per
funded start-ups $ 5.8 Mn 7% $ 6.2 Mn
$504 Mn $618 Mn
Growth Stage 23%
Total start-up [$14.4 Mn] [$8.7 Mn]
Unicorns raised in excess of $3.8 Bn in H1 2017
ecosystem funding
in H1 of 2017 Companies incepted before 2012 raised $0.8 Bn $825 Mn
$1323 Mn5
Expansion Stage -38%
[$75.6 Mn] [$88.4 Mn]
[ ] - Average Funding Value
Though both funding value and # of deals dropped in H1 2017 Cautious investors shifting money from Seed stage start-
(compared to H1 2016), funding per start-up grew by 7% ups to Early and Growth stage start-ups
Note: 1 Estimates based on average deal size and number of deals (extrapolated based on number of deals within H1- 2017). Deals worth $ 1.8 Bn already closed by end of H1-2017; 2 Extrapolated based on data
recorded till the end of H1-2017; 3 Based on multiple rounds of funding in start-ups funded in H1-2017; 4Definition of funding stages: Seed Stage - <$1 Mn, Early Stage - $1-5 Mn, Growth Stage - $5-20 Mn, Expansion
Stage - >$20 Mn; 5Expansion stage in 2016 also includes $638 Mn raised by start-ups incepted in 2011 (such as Byju, Big Basket, Qubole etc.) and Unicorns (such as ShopClues and Hike) 17
Source : Zinnov Research & Analysis, Tracxn, CrunchBase
FUNDING ANALYSIS ACROSS TOP DEALS
FUNDING
Top 10 deals alone amounted to ~30% of the overall funding value
Analysis of Funded Deals (H1 2017) Top 10 Deals & Investors (H1 2017)
Funding: $250 Mn Investors: SoftBank Vision Fund, Lightspeed

1 Vertical: Aggregator / Venture Partners, Sequoia Capital India
eCommerce Advisors, Greenoaks Capital Partners
Funding: $80 Mn Investors: Accel India, SAIF Partners, Bessemer

2 Venture Partners, Harmony Partners, Norwest
Vertical: Food-tech
Venture Partners
Funding: $70 Mn Investors: Sands Capital, IFC, Accel Partners,

3 Vertical: SCM & Logistics Flipkart
4 Funding: $21 Mn Investors: Vy Capital, SAIF Partners, Accel

Vertical: Aggregator / Partner, Bessemer Venture Partners
eCommerce
5 Funding: $21 Mn Investors: Mahindra Partners, Eight Roads

Vertical: Health-tech Ventures, F-Prime Capital Partners
6 Funding: $18 Mn Investors: Bessemer Venture Partners, Orios

Vertical: Health-tech Venture Partners, Trifecta Capital
Funding: $15.2 Mn Investors: Kalaari Capital, SAIF Partners,

7
Vertical: Aggregator / Steadview Capital, Sequoia Capital
eCommerce
Funding: $15 Mn Investors: Private Sector Banks (Debt Funding)
8
Vertical: SCM & Logistics
Top 50 deals (i.e. 16% deals) accounted for nearly 9

Funding: $15 Mn Investors: Softbank Ventures Korea, IMM
Vertical: Fin-tech Investment
~45%+ of the total funding value
10 Funding: $15 Mn Investors: CapitalG, Sequoia India
Vertical: Edu-tech
18
Source : Zinnov Research & Analysis, Zinnov Research & Analysis, Tracxn, CrunchBase
ANALYSIS OF ACTIVE INVESTORS (H1 2017)1
FUNDING
Foreign investors formed a significant share (44%) of active investors, led by VCs
INCUBATORS /
ANGELS VCS CORPORATES
500+ Split of # of investors
ACCELERATORS
Total across categories

220+ 220+ 30-40 10-20
Active
Investors
Angels form a
significant share
Indian
Investors
280+ 150 95 15-20 5-10 (>50%) of the active
Indian investor mix
(56%)
Share of
Indian &
Foreign
Investors
Foreign VCs - most active

Investors
220+ 70 125 15-20 5-10 foreign investors
(44%) (~57% share of
foreign investors)
Note: 1 Estimated based on data recorded till the end of H1-2017;

Source : Zinnov Research & Analysis, CrunchBase, Tracxn, YourStory, Inc42 19
DEEP DIVE ON FOREIGN INVESTORS & FUNDING (H1 2017)
FUNDING
Non-U.S. investments formed a sizeable share of >50% of the foreign funding value
# of Foreign Investors: 220+ $ Value of Funding: $1.2 Bn

Illustrative list of funded start-ups with foreign investor presence
Share of investors across Geos Share of funding across Geos1 (Foreign Investor Name | Start-up Funded | Total Funding Amount )
Nasper Sands Capital

U.S. 55% 46% (Corp)
$80 Mn
(VC)
$70 Mn
Sistema Asia Vertex

Singapore 16% 8% $8 Mn $7.5 Mn
(VC) Ventures (VC)
Blue Orchard Earlsfield

$8 Mn $1 Mn
Europe 15% 8% (VC) Capital (VC)
Softbank $250 Mn IMJ Inv.

Japan 6% $4.6 Mn
31% (VC) (VC)
China 6% Shunwei Cyber Carrier

3% Capital (VC)
$3 Mn
(VC)
Undisclosed
Others2 2% 3% Vy Capital $21 Mn

Powerhouse
$3.6 Mn
(VC) Ventures (VC)
Japan forms a significant 30%+ share of foreign funding, second only to U.S. (~45%)
Note: 1 Funding share of Foreign investors incl. analysis of funding deals in H1 2017 where Foreign investor were present as either standalone investor or along with other Indian or Foreign investors; 2 Others:
Thailand, Germany, Dubai, Mauritius, Canada, etc.; 20
Source: Zinnov Research & Analysis, CrunchBase, Tracxn, YourStory
BUSINESS FOCUS OF FUNDED START-UPS
FUNDING
B2C continues to have a significant share in funding; however, B2B share rises from 27% in 2016 to 31% in 2017
Funding Split by Business Focus (B2C/ B2B)1.2
H1 2016 H1 2017
($ 2.1 Bn) ($ 1.8 Bn)
B2B share of funding increased

B2C 85% from 27% in 2016 H1 to 31% in
76%
$6.3 Mn average funding per funded B2C start-up 2017 H1
B2B 27% 31% $4.2 Mn average funding per funded B2B start-up
Prominent B2B Funded Start-ups

$10 Mn $10 Mn $8 Mn $7 Mn
Funding Funding Aye Finance Funding Funding However, B2C start-ups continued
(Data analytics for mobile (Enables SMBs to build their (Financial services to SMBs (Logistics and distribution to garner ~1.5X more average
audience engagement) online presence) in north India ) platform) funding value vis-à-vis B2B start-
ups
Investor: Investor: Investor: Investor:
Star India Pvt Ltd Blume Ventures, Omidyar Blue Orchard Kalaari Capital, Norwest
Network Venture Partners
Note: 1 % share of funding across customer segments estimated based on total funding raised for H1-2017. Deals worth $ 1.8 Bn already closed by end of H1-2017; 2 Overlap of start-ups with focus across B2C and B2B
Segments : 12% in 2016 and 7% in 2017 21
Source : Zinnov Research & Analysis, CrunchBase, Tracxn
VERTICAL ANALYSIS OF FUNDING1
FUNDING
Investors continue to remain bullish on Aggregators / eCommerce and Fin-tech verticals
Distribution of Indian start-ups by key Industry Verticals
45%
*Bubble size represents the Vertical Aggregator /

# of start-ups funded eCommerce2
Distribution of Funding (%)
Horizontal
20% Aggregators/eCommerce
Health-tech and
Enterprise
15%
Fin-Tech
Product emerged
as other key
Health-
Food-Tech
Tech funded verticals
Enterprise
10% Product
200 400 600 1100
Total Number of Start-ups

Note: 1 Estimates based on average deal size and number of deals (extrapolated based on number of deals within H1-2017) across each vertical; Deals worth $1.8 Bn already closed by end of H1 -2017; 2Vertical
aggregators/eCommerce has overlaps with other industry verticals such as Travel & Hospitality, Food-tech, Fin-tech, Health-tech etc. 22
Source : Zinnov Research & Analysis
AGGREGATORS / eCOMMERCE VERTICAL
FUNDING
Enhanced investor focus on “Verticalized or Specialized” Aggregators / eCommerce start-ups
# of Aggregator / eCommerce start-ups1 13% YoY Top Funded Verticals within Vertical Aggregators / eCommerce
1700+ growth since
(33% of the total start-up base)
2016 35%
Oyo Rooms ($250 Mn),
$1.1 Funding raised by Aggregator / eCommerce 22% growth Zolo Stays ($5 Mn),
Explore Life ($~1 Mn)
Bn start-ups in H1 of 20172 (61% share) since H1 2016
20%
Swiggy ($80 Mn),
Split by Horizontal & Vertical Aggregators / eCommerce Scootsy ($4 Mn),
Box8 ($1 Mn)
HORIZONTAL VERTICAL
15%
% share in # of start-ups 33% (560) 67% (1140)
Blackbuck ($70 Mn),
Blowhorn ($4 Mn),
% share in funding 30% ($330 Mn) 70% ($770 Mn)
Trukky ($1 Mn)
12%
Cover Fox ($15 Mn),
Paysense ($6 Mn)
6%
Vertical Aggregators / eCommerce form ~70% share of Growfit ($5 Mn),
the overall Aggregator / eCommerce funding value and CreditHealth ($2 Mn),
# of deals AirMed Lab ($1.4 Mn)
Note: 1 Extrapolated based on data analysis for a sample of ~2100 start-ups incepted between 2012-2017; 2 Estimates based on average deal size and number of deals (extrapolated based on number of deals within
H1-2017) across each vertical; Deals worth $1.8 Bn already closed by end of H1 -2017;
23
FIN-TECH VERTICAL
Fin-tech showed a massive increase in funding, led by an impressive portfolio of start-ups across specialized sub- FUNDING
verticals
Top Fin-tech Sub Verticals Illustrative start-ups

# of Fin-tech start-ups1 (% Share of Funding across Sub-Verticals)
360+ ($12.3 Mn Funding)– Instant ($12.5 Mn Funding)– Financing
(~7% of total start-ups) 28% P2P Lending online credit company
31% YoY growth in # of start-ups ($4 Mn Funding)– Savings

($15 Mn Funding)– Balance
from 2016 19% Wealth Management3 utility app
management app
($8 Mn Funding)– Fin Services ($4.8 Mn Funding)– Working

Funding raised in H1 20172 17% SME Lending capital finance to SMEs
$200+ to SME
Mn (~11% of overall funding)

Consumer Credit & ($6.5 Mn Funding)– Consumer ($5 Mn Funding)– Consumer
15% Lending credit loans
135% growth in funding since H1
2016 ($15 Mn Funding)– Brokerage (Undisclosed Funding)–
8% Insurance Tech services General Insurance
($3.7 Mn Funding)– SaaS ($3 Mn Funding)– Web and

7% Digital Payments Payment solution mobile API
31% YoY growth in overall # of ($2.5 Mn Funding)– Micro (Undisclosed)– Education

Fin-tech start-ups;
4% Educational Loan Lending Platform focused at Loan marketplace
redcarpet students
2.3X increase in funding value ($0.4 Mn Funding)–
($3 Mn Funding)– Online
2% Others4 marketplace for Lending Automated Stock Advisor
Note: 1 Extrapolated based on data analysis for a sample of ~2100 start-ups incepted between 2012-2017; 2 Extrapolated based on Funding data recorded till H1-2017, Deals worth $ 1.8 Bn already closed by end of
H1-2017; 3 Includes Apps which help manage expenses, bill management, etc.; 4 Others: trade financing, remittance services etc.
Source : Zinnov Research & Analysis, CrunchBase, Tracxn 24
ENTERPRISE PRODUCT1 VERTICAL
FUNDING
Though the number of Enterprise Product start-ups saw a decline, the funding value increased by 45% in 2017
Top Enterprise Product Sub Verticals Illustrative start-ups

# of enterprise product start- (% Share of Funding across Sub-Verticals)
480+
ups2 (~9% of total start-ups)
Data Analytics / ML / AI ($7.5 Mn Funding)– Machine ($ 2 Mn Funding) - AI
13% YoY decline in # of start-ups 21% Platforms intelligence platform powered bot
from 2016
HRM / Workforce ($10 Mn Funding)– ($4 Mn Funding)– Cloud based
20% Management Solutions Recruitment solutions HR management and Analytics
Platform
$145+ Funding raised in H1 20173
($2.2 Mn Funding)- Cloud (Undisclosed)– End-to-end
Mn (~8% of overall funding) 14% Security Solutions security-based start-up cyber security solution
provider
45% growth in funding since H1 ($6.7 Mn Funding)–
($10 Mn Funding)– Enable
2016 13% SMB focused solutions SMEs to get an online
SaaS m-commerce enabler
and mobile applications
Sales / Marketing ($1.1 Mn Funding)– Predictive (Undisclosed)– Automated

13% Solutions Prospecting Platform LeadGen platform
($5.5 Mn Funding)– Corporate

13% YoY drop in overall # of 19% Others4 Social Responsibility
($5 Mn Funding)– Video
Discovery Platform (Tagos)
start-ups Management Solution
1.4X increase in funding

90% of these “Enterprise Product” start-ups are SaaS solutions
Note: 1 Enterprise Product vertical includes B2B start-ups which are largely focused on horizontal solutions for both Large Enterprises and Small / Medium Enterprises (SMBs); 2Extrapolated based on data analysis for
a sample of ~2100 start-ups incepted across 2012-2017; 3 Extrapolated based on Funding data recorded till H1-2017, Deals worth $1.8 Bn already closed by end of H1-2017; 4 Others: AR/VR Solutions, Video Discovery
Solutions, Infrastructure Management Solutions, etc. 25
HEALTH-TECH VERTICAL
FUNDING
Health-tech showed an impressive increase in funding, led by start-ups within e-Diagnostic and Anomaly Detection
Top Health-tech Sub Verticals Illustrative start-ups

# of Health-tech start-ups1 (% share of funding across sub-verticals)
320+
(~6% of total start-ups) Tech-enabled Diagnostic ($18 Mn Funding)– Order and (Undisclosed)– Technology-led
23% Services scheduling diagnostic check-up diagnostics and wellness
company
28% YoY growth in # of start-ups
from 2016 Anomaly Detection & ($5.8 Mn Funding)– ML based (Undisclosed)– Offers Breast
23% Disease Monitoring
solutions for medical diagnosis Cancer Screening Solutions
Funding raised in H1 20172 (Undisclosed)– Discover and

$160+ 19% Aggregator/E-Commerce (Undisclosed)– Online pharmacy
and hygiene products purchase fitness services
Mn (~9% of Overall Funding)
129% growth in funding since H1 Personal Health & Fitness ($4.5 Mn Funding)– Mobile ($5.8 Mn Funding)– Offers
13% Discovery health companion membership for more than
2016 1000+ gyms in NCR
Health Information ($1.5 Mn Funding)– Unified (Undisclosed)– Cloud based

8% Management (HIM) digital health platform Solutions for Dental Practice
Management
Tele-Health / Remote ($1.5Mn Funding)– Online (Undisclosed)– Offers instant
28% YoY growth in overall # of 5% Consultation clinics consultation for women health reports via video
conferencing
start-ups
($0.7 Mn Funding)- Healthcare
2.2X increase in funding value (Undisclosed)– Medical
9% Others3 devices for diabetes related related content platform
complications
Note: 1 Extrapolated based on data analysis for a sample of ~2100 start-ups incepted across 2012-2017; 2 Extrapolated based on Funding data recorded till H1-2017, Deals worth $1.8 Bn already closed by end of H1-
2017; 3 Others: Medical devices, Health Discovery Platforms, Social Discovery etc. 26
FOOD-TECH VERTICAL
FUNDING
Food-tech vertical saw a decline in both the number of start-ups and funding garnered in 2017
Top Food-tech sub verticals Illustrative start-ups

(% share of funding across sub-verticals)
# of Food-tech Start-ups1
200+
(~4% of total start-ups) ($80 Mn Funding)– Food ($3.6 Mn Funding)– On-Demand
66% On-Demand Delivery ordering and delivery solution Food Delivery
33% YoY decline in # of start-ups
from 2016
($10 Mn Funding)– Online ($3 Mn Funding)– Provides
Funding Raised in H1 20172
16% Online Grocery meat and fish ordering ready-to-cook products
$180+
Mn (~10% of Overall Funding)
($3 Mn Funding)– Healthy ($0.5 Mn Funding)– Online Asian

40% decline in funding since H1 8% Gourmet / Curated Food home cooked food delivery gourmet food
2016
Restaurant Management (Undisclosed)– Solutions to (Undisclosed)– Cloud based

6% solution restaurants such as POS and restaurant management
loyalty apps software
33% YoY drop in overall # of
food-tech start-ups in 2017;
(Undisclosed)– Guide to eating ($0.4 Mn Funding)– Online food
40% decline in funding value 4% Discovery Platforms out options and reservations discovery platform
Note: 1 Extrapolated based on data analysis for a sample of ~2100 start-ups incepted across 2012-2017; 2 Extrapolated based on Funding data recorded till H1-2017, Deals worth $1.8 Bn already closed by end of H1-
2017; 27
REVENUE MODEL ANALYSIS OF FUNDED START-UPS1
FUNDING
Commission and Subscription based revenue models remain the most popular among Investors
% share of funding across major revenue models Illustrative start-up examples Other Innovative Revenue Models
33% Start-ups charge a

commission for a
Insights Based Model
Commission Based transaction that it mediates Food-tech: Earns a commission Aggregator/eCommerce:
of nearly 10-15% for every Charges a commission of 10% ($1.1 Mn funding) intelligent sales prospecting platform
Model between two parties charges customers for # intelligent attributes such as
online order on the products sold SKUs (or Stock Keeping Units) bought
Hyper-Personalized Model
30% Customers pay a
subscription price to have Health-tech: Charges Enterprise Product: Analytics for
Subscription Based access to a product or a consumers on personalised competitive intelligence on ($10 Mn funding) offers recruitment solutions and
Model service diet plan and concierge Pricing and various SKUs2 charges based on level of customization required for
each job (Commission Based Model)
Retainership Model
27% Customer paying a fee for a
SCM & Logistics: Charges 10- SCM & Logistics: Charges a 2%
Transaction / Fee transaction to the operator
of a platform 15% on each transaction transaction fee (Funding Undisclosed) works with customers providing
Based Model tailormade digital marketing techniques and charges on
a monthly retainership basis
10% Start-ups earning from Ad Freemium Model

revenue from sponsors
Advertising / (mostly for start-ups offering Fin-tech: Apps revenue model Aggregator/eCommerce: Earns ($3 Mn funding) fitness platform providing work out
Affiliate Based free content or services to revolves around earnings from from advertising and listing fees video tutorials for free while charging customers access
customers) advertisements for cult fitness centers (Subscription based Model)
Model
Note: 1 Analysis based on a sample of 60+ funded start-ups across different verticals incepted across 2012-2017; 28
Source : Zinnov Research & Analysis;
MERGER & ACQUISITION ANALYSIS – BY ACQUIRER CATEGORY MERGER &
ACQUISITIONS
Rising role of corporates, with 30% share in M&As
25% Growth
40+ M&A deals 50+ M&A deals
(H1 of 2016) (H1 of 2017)
Indian Start-ups – 60% Indian Corporates – 16%

Acquirer + Acquired
Little, a deal discovery start-up acquired beauty
and wellness start-up
Acquirer + Acquired
Axis Bank acquired FreeCharge, an online
payment platform
MyDidi, domestic help provider acquired home
services start-up TimeMyTask Kalyan Jewellers acquired Candere, a
Acquisitions by jewellery e-commerce platform
Acquirer Category
Global Corporates – 14% Indian Unicorns – 10%
Acquirer + Acquired Acquirer + Acquired
Google acquired Halli Labs (within 4 months of Paytm acquired Insider.in, an online ticketing
inception) and events platform
News Corp, diversified media and information Quikr acquired Zimmber, hyper local home
services acquired analytics start-up GyanMatrix services start-up
29
Source : Zinnov Research & Analysis, Press Articles, VCCircle
B2C / B2B SPLIT OF START-UP ACQUISITIONS (H1 2017) MERGER &
ACQUISITIONS
B2B acquisitions continue to rise, mostly focused at building tech capabilities
Share of B2C in M&A Share of B2B in M&A
2017 64% 2017 36%

B2C B2B
2016 90% 2016 10%
Market expansion - primary reason for B2C Building tech capabilities - primary reason for B2B
acquisitions (40%+ share) acquisition (80%+ share)
Examples B2C acquisitions for market expansion Examples of B2B acquisitions for building tech capabilities
Acquirer + Acquired Acquirer + Acquired

OneLoyalCard, a restaurant table reservations and deals Google acquiring Halli Labs to build new
platform acquired Pocketin to consolidate their position in Machine Learning based innovative
(Vertical: NCR and expand to other markets (Vertical: Enterprise
products
Aggregator/eCommerce) Product)
Mastitcikets.in acquired to target regional markets, Leverage Shoppist’s NLP-based recommendation

specifically Andhra Pradesh and Telangana capabilities to create a personalised experience
(Vertical: Media & (Vertical:
Entertainment) Aggregator/eCommerce)
30
ANALYSIS OF CLOUD START-UPS1 CLOUD &
ADVANCED
Increasing focus on Cloud start-ups, with SaaS forming a mammoth share TECH
Split of Cloud start-ups across SaaS/PaaS/IaaS1,2 Examples to Illustrate
950+ # of Cloud start-ups
SaaS 900+ IOT-based SaaS

IoT platform for
(95%) Solutions for managing and optimizing
Transportation Industry machine performance
Share in overall start-
19% up base
PaaS 70+ Smart building platform App building platform to

Funding raised by (5%) focused at connectivity build native apps for iOS
$250 Cloud start-ups in H1
solutions and android
Mn+ of 2017
IaaS 15+ IaaS platform which helps large businesses

Share in overall (2%) allows users to setup and offer suite of IaaS products
14% funding of $1.8 Bn (H1

manage servers to their customers
of 2017)
SaaS start-ups form majority share (~95%) of the 950+ Cloud start-ups
Note: 1 Extrapolated based on data analysis for a sample of ~1000 start-ups incepted across 2012-2017; 2 Sum may not add up to 950 due to overlap of start-ups providing both SaaS as well as PaaS offerings 31
Source : Zinnov Analysis
GROWTH OF ADVANCED TECH START-UPS1,2 SINCE 2012 CLOUD &
ADVANCED
Impressive growth in the number of new-age Advanced Technology start-ups over the last 2 years TECH
30% CAGR
~215 ~700+ Unique

~180 450+ Analytics /

Advanced Analytics
~130
~100 200+ Artificial
# of Unique Intelligence (AI)
Advanced Tech ~75
Start-ups
125 220+ Internet of Things
(post removal of overlaps) (IoT)
85 90
80
70 70
55 80+ Augmented /
45 45 40
35 Virtual Reality (AR/VR)
25 30 30 25
20 25
2 8 2 7 3 12 4 8 3 15 6 8 5 8 12 8 10 15
Inception Year 2012 2013 2014 2015 2016 Onwards

50+ Robotics
of Start-ups
Blockchain AR/VR 3D Printing Robotics Internet of Things Artificial Intelligence Analytics/Advanced Analytics
30+ 3D Printing
Growth of new-age Advanced Tech start-ups; 30%+ CAGR for new start-up additions since 2012 20+ Blockchain
The individual
Note: 1 Extrapolations based on data analysis for a sample of ~2100 start-ups incepted between 2012-2017; 2 In-depth analysis of ~600 Start-ups in the Advanced Tech space across Advanced Analytics, IOT, Artificial numbers do not add to
Intelligence (Including ML, NLG, NLP etc.), AR/VR, Robotics, 3D Printing, Blockchain; 700 due to overlaps
32
Source : Zinnov Research & Analysis, CrunchBase, Inc42
ADVANCED TECH START-UPS – FUNDING ANALYSIS (H1 of 2017) CLOUD &
ADVANCED
Advanced Technology start-ups garnered an impressive 20%+ of the overall funding in H1 2017 TECH
~$340 Mn Funding1 for Advanced ~ 20% of total funding (H1 2017)

Tech start-ups
Illustrative start-ups (with funding raised in 2017)

Share of $340 Mn funding across
Advanced Tech areas2
Analytics /
Logistics services and
Advanced Analytics Solutions Truck Network Platform Lending Platform
60% $ 15 Mn $ 10 Mn $ 7.6 Mn
30%
10% Artificial Intelligence
Recruitment solutions Machine Intelligence Solutions to analyse
(AI) $ 10 Mn Platform Medical Data
10% $ 7.5 Mn $5.8 Mn
H1
2017
Internet of Things
Healthcare Lab Energy Management & IOT Solutions for
(IoT) Aggregator Analytics Transportation
$ 1.4 Mn $1.2 Mn $0.9 Mn
Others3
(Incl. AR/VR, 3D Printing, &
Robotics) CV on Embedded Systems AR/VR based Edu-Tech VR Head mounted device
(Funding Undisclosed) (Funding Undisclosed) $1.2 Mn
Within Advanced Technology, AI start-ups top gainers with ~3X more funding compared to IoT start-ups
Note: 1 Extrapolated based on Funding data recorded till H1 of 2017; Deals worth $1.8 Bn already closed by end of H1-2017; 2Sum total of %ages do not add up to 100% due to overlaps; 3Blockchain start-ups did not
receive any funding in 2017 33
Source : Zinnov Research & Analysis, CrunchBase, Inc42
VERTICAL ANALYSIS OF ADVANCED TECH START-UPS1 CLOUD &
ADVANCED
Enterprise Product, Fin-tech, and Health-tech emerge as the top verticals being disrupted by Advanced Tech TECH
Others2
Analytics / Artificial Internet of Things
Top Verticals (Incl. AR/VR, 3D Illustrative start-ups
Advanced Analytics Intelligence (AI) (IoT) Printing, & Robotics)
Total Funding Value ($ Mn)
($4 Mn) Provides cloud-based

Enterprise Product
DarwinBox integrated HR management and
$95 Mn analytics solutions for businesses
Fin-tech ($2.5 Mn) ML-led credit scoring and

redcarpet Micro Lending Platform
$65 Mn
Health-tech (Undisclosed) AI based health

$50 Mn content platform
($4.5 Mn) 3PL start-up that provides

SCM & Logistics
Less than truck load (LTL) distribution
$45 Mn and warehousing for SMEs
Aggregators / eCommerce ($0.2 Mn) Data driven aggregator

$40 Mn platform for transportation industry
Legend: Funding Value of Start-ups High - $20 M+ Medium - $10-20 Mn Low Funding- <$10 Mn No Funding
Note: 1 Extrapolated based on Funding data recorded till H1 of 2017; Deals worth $1.8 Bn already closed by end of H1-2017; 2Blockchain start-ups did not receive any funding in 2017 34
Source
Source : :Zinnov
ZinnovResearch
Analysis;
& Analysis, CrunchBase, Inc42
FOUNDERS’ ANALYSIS OF ADVANCED TECH START-UPS1,2 CLOUD &
ADVANCED
More founders with Engineering background at the helm of Advanced Technology start-ups TECH
Founder Work Educational Professional

Age Experience Qualification Courses
33yrs Median age of ~45% Founders have 80%+ Founders have an 20% Founders have 1.6X more founders
Advanced Tech founders previous work experience Engineering background complete advanced tech with Engineering
(compared to 32 yrs overall) (Tech or Non-Tech) (incl. Engg. Graduate / PG) Professional Courses background for
Advanced Tech vis-à-
55% founders have more than 30 yrs Previous companies include Infosys, Student Start-ups in Advanced Tech Prominent Courses: Analytics (19%), vis overall start-ups
of age Microsoft, IBM, Intel, Persistent, Cisco, remain low (less than 10%) Robotics & Mechatronics (18%) and
Citrix, Dell etc. AI (7%) among others
Advanced Tech Founder Profiles (for illustration)
1 Martian Way is focused on AI technologies to

Gade Autonomous Systems focused on developing develop software powering drones, robots and SenseGiz is focused at IOT based wearable tech (incl.
state of the art social and service robots automation products | Founded in December, 2014 smart watches) | Founded in March, 2013
Prior Industry Experience – 6 years+ in Nordstrom Prior Industry Experience – 8 years+ in Marine Group, Prior Industry Experience – 7 years+ in Girnar Alloys
Robotics, Bonn Rhein Sieg University Digibag
Sasi Kiran Gade Karan Kamdar Abhishek Lathe

Founder at Gade Highest Education – M.S. In Robotics – Bonn-Rhein- Founder & CEO at 1 Highest Education – M.S. EE In Concentration ACE Founder & CEO at Highest Education – M.Sc. In Mechatronics –
Autonomous Systems Sieg-University of Applied Sciences (top themes incl. Martian Way (Robotics) – University of California (top themes incl. SenseGiz University of Southampton (top themes incl. Control
Robotics Design, R&D, etc.) Age – 33 years Bio Robotics, Telematics, etc. Part of Stanford Ignite, Design, Robotic Systems, Advanced Electrical
Age – 33 years Stanford University Graduate School of Business
Age – 35 years Systems, Sensors & Signal processing, etc.)
Note: 1 Analysis done on founder profiles of ~350+ Advanced Tech start-ups; 2 Advanced Tech start-ups include start-ups leveraging Analytics/Advanced Analytics, IoT, Artificial Intelligence, Robotics, AR/VR, 3D
Printing, Blockchain 35
Source : Zinnov Research & Analysis, CrunchBase, LinkedIn, Start-up Website
START-UPS TARGETING SOCIAL PROBLEMS IN INDIA SOLVING SOCIAL
PROBLEMS
Mushrooming of a huge base of start-ups catering to social challenges – HealthCare and Education Inclusion at the top
# of Start-ups1 solving Social

18% YoY Growth in # of Start-ups Start-ups based out of Tier 1
325+ Problems
compared to 2016
75% Cities
~65 start-ups incepted post 2016
Share of start-ups Solving Social Problems across Sub-segments
Education Financial Crime

Healthcare2 Inclusion3 Inclusion4 Clean-tech5 Agri-tech6 Energy-tech Prevention
4%
12% 8%
18% 18% 15%
20%
Low cost diagnostic Provides loans to school (Raised $2mn funding) (Raised $10 Mn Raised $2.5 Mn funding) Provides Analytics
Academic Crowdfunded students for their –Offers recycling funding) - m-commerce based applications to
solutions in semi-urban – A marketplace for solar
Scholarship platform school fees services platform for farmers predict crime hotspots
and rural areas solutions
India's 1st Video Online platform that FREE On-Demand and (Raised $10 Mn Helps optimize energy Solutions to monitor
Virtual master-tutors to Recurring recyclable funding) – Renting and reduce carbon foot-
Medicine Company for offers unsecured location and movement
support teachers waste pickup services Farming machinery print for organizations
online consultation business loans to SMBs incl. women safety
Note: 1 In-depth analysis of 325+ start-ups focused at solving key India challenges (based on data recorded till July, 2017) 2HealthCare – incl. tele-medicine, remote healthcare, mobile health, medical devices and
healthcare solutions targeted at rural / semi-urban areas, etc.; 3 Education Inclusion – incl. remote education, education loans, scholarship crowdfunding platforms, education & training targeted at rural areas etc.; 4
Financial Inclusion – incl. micro financing, rural and Agri lending, crowdfunding, investments, and other solutions targeted at rural / semi-urban areas etc.; 5 Clean-tech – incl. solutions for waste management,
sanitation, clean energy, air / water / land pollution monitoring etc.; 6 Agri-tech – incl. agro-services and solutions to enable farmers to improve yield, sell directly by eliminating middlemen, product & price discovery
platforms, etc. 36
Source : Zinnov Research & Analysis, Press Articles, CrunchBase, YourStory, Inc42
SOLVING SOCIAL
TIER-2/3 CITY START-UPS TARGETING CORE INDIA PROBLEMS PROBLEMS
Healthcare • Providing integrated healthcare to rural areas through mobile

Udaipur Inception Year: 2014 technology
• India’s first online Academic Crowdfunded Scholarship Platform for

Educational Inclusion less affluent students
Coimbatore Inception Year: 2016
• Have supported 60+ students so far with 76.8% success rate
Financial Inclusion • Online platform focused at providing working capital finance to SMBs
Jaipur Inception Year: 2013 • 620% Revenue growth YoY achieved in FY17
Agri-tech • M-Commerce platform for farmers which offers farm solutions, data
Pune Inception Year: 2013 analytics and agri inputs
• Aids farmers through technology by providing them timely

Indore Agri-tech information, technology and inputs to achieve better yields.
Energy-tech
Ahmedabad Inception Year: 2014 • Online marketplace for solar products and services
Crime Prevention • Offer iCapture surveillance camera product which offers facial
Kochi Inception Year: 2015 recognition and notifying system
37
ADVANCED TECH FOCUS OF START-UPS TARGETING CORE INDIA PROBLEMS1,2 SOLVING SOCIAL
PROBLEMS
~20% start-ups solving social problems are leveraging Advanced Technology at the back-end
Advanced Tech Top Advanced Tech Verticals Leveraging Advanced Tech Illustrative start-ups
Segments Use Cases Education Crime
Clean-Tech Agri-Tech Healthcare
(% share in # of start-ups) Inclusion Prevention
38% • Environment Quality Monitoring IoT based air pollution & quality
• Smart Devices for Agriculture & Homes monitoring systems
• Fuel & Energy Waste Management
• Health Diagnostic Devices IoT based Smart water management
Internet of Things • Monitoring Devices solution
(IoT)
36% •
•
Medical Diagnostics
Crime Detection & Prevention
Analytics led solutions to predict crime
hotspots
• Aerial Land Surveillance & Analytics
• Energy Management Optimization Predictive Healthcare Analytics start-up
Analytics / Advanced • Self Health Diagnostics for quick and accurate heart diagnosis
Analytics
25% • Medical Diagnostics

Intelligent solutions for medical
diagnosis using Machine Learning
• Children Safety
• Aerial Surveillance & Intelligence AI based conversational agents for
Artificial Intelligence • Actionable Data Insights for Agri sector financial institutions to assist people in
(AI) tier-2/3 cities
Note: 1 In-depth analysis of 325+ start-ups focused at solving key India challenges (based on data recorded till July, 2017); 2Analyzed Start-ups leveraging Advanced Technologies such as Analytics/Advanced Analytics,
Artificial Intelligence, IOT, AR/VR, etc.
38
MORTALITY ANALYSIS OF START-UPS1 MORTALITY
ANALYSIS
Start-up mortality continues to be a key problem with majority start-ups dying within 1.6 – 1.9 years of inception
20–25%
Scalability Related Issues External Factors
Failure to scale business, low market demand 49% 5-year Mortality Rate of 8%
Macro factors such as Regulatory changes,
Demonetization, Govt. norms etc.
and sales, strong competition Start-ups1
(incepted between Online community for music creators
P2P Marketplace for pre-owned Received a number of Digital
2012-2017)
cars Millennium Copyright Act (DMCA)
Faced difficulties in achieving notices from different labels leading
unit economics with market to its closure
difficulties in sales
43% 10%
Funding & Cash Related Issues Founder/Top Management Related
Unable to raise funds, high cash burn rate 21% Difference in opinion between Co-Founders, Disconnect with
Investors
Hyper-local grocery retailer
Excessive cash burn and unrealistic expansion plans Business Model Related Dental and School ERP solution provider
coupled with low demand from tier-2/3 cities Non-scalable business model, model not suited to Lack of co-ordination between founders and team
India market, failure due to revamping model support led to the downfall
Consumer search platform

Unable to scale with the current business model
leading to investor loss
1.6-1.9 years to failure (from inception) 55% Failed Start-ups had received Funding 20% Failed Start-ups graduated from I/As
Note: 1 Analysis based on a sample of ~1000 start-ups (incepted between 2012-2017) analyzed for dead / active status; further deep dive of 100 failed start-ups to analyze the top reasons for mortality 39
Source : Zinnov Research & Analysis, Press Articles, AngelList, YourStory, Inc.42
MORTALITY ANALYSIS OF START-UPS ACROSS BUSINESS FOCUS1 MORTALITY
ANALYSIS
B2B start-ups show higher stability, with further reduction in share of B2B in failed start-ups
B2C / B2B Share of Failed Start-ups
2017 80% 2017 30%

2017
B2C B2B
2016 64% 2016 36%
Examples of failed B2C start-ups Examples of failed B2B start-ups
$5.7 Mn $1.5 Mn $0.7 Mn $0.15 Mn $5 Mn

NA
Funding Funding Funding Funding Funding
Home service start-up Hotel Booking Start-up Online platform for loyalty Hyperlocal logistics start-up On-demand logistics services Marketplace for Industrial Goods
Inception Year: 2014 Inception Year: 2014 cardholders provider Inception Year: 2014
Inception Year: 2013 Inception Year: 2014
High cash burn rate and Dip in sales and

Unable to reach the desired Unable to raise funds Low product demand and Poor margins and high cash
unable to raise funds underperformance following
scale and profits cash crunch burn rate
demonetization
Delhi NCR top state for B2C start-up failures (40%+) while Bengaluru leads w.r.t. B2B start-up failures (33%)
Note: 1 Analysis based on a sample of ~1000 start-ups (incepted between 2012-2017) analyzed for dead / active status; further deep dive of 100 failed start-ups to analyze the top reasons for mortality 40
JOURNEY OF FAILED START-UPS – MORTALITY V/S FUNDING ANALYSIS OF 100 FAILED START-UPS1,2 MORTALITY
ANALYSIS
Start-ups are most vulnerable from inception till early stage funding, thereby needing maximum support
Average Funding:
>$25 Mn $
20
~45-50% die even

Valley of Death before securing seed
% of Failed Start-ups
stage funding, and
Mortality need maximum
Funding Value of Start-up ($ Mn)
Average Funding: ~10% support to kick start

$6-8 Mn
$
Mortality
Average Funding:
$2.0-2.5 Mn
~15% Start-ups become
$
stable post growth
Start-up Safe Zone
Average Funding:
stage funding with
$200-250 K minimal risk of
Mortality
$ 30-35% mortality
0
Mortality
45-50%
Inception Seed Stage1 Early Stage1 Growth Stage1 Expansion Stage1
Note: 1 Definition of funding stages based on funding amount: Seed Stage - <$1 Mn, Early Stage - $1-5 Mn, Growth Stage - $5-20 Mn, Expansion Stage - >$20 Mn; 2 Analysis based on a sample of ~1000 start-ups
(incepted between 2012 – 2017) analyzed for mortality; further deep dive of 100 failed start-ups across their funding values and stages 41
INCUBATOR / ACCELERATOR (I/A) ANALYSIS INCUBATORS /
ACCELERATORS
Vibrant Incubator/Accelerator ecosystem; growth led primarily by Private & Corporate Incubators / Accelerators
190+ # of Active Incubators / Accelerators in 2017 (~35% YoY Growth) ~40% Incubators / Accelerators are based out of Tier 2/3 Cities
Types of Incubators / # of Incubator / Location Illustrative

Focus Verticals Focus Tech Key Support for Start-ups
Accelerators Accelerators (Tier-1 / Tier-2/3 Examples of I/As
• Offers on-Premise or Cloud tech Platform

Fin-tech, eCommerce, Cloud, Analytics/ • Technology counsel and mentorship
CORPORATE 20 90% | 10% Health-tech, Advanced Analytics, • Networking opportunities
(up by 33% YoY) Enterprise Product ML/ AI • Alignment with BUs for live POCs
• Access to Customers
75% | 25% Aggregator / • Mentorship by diverse set of experienced

Metro’s, Pune,
65 Ahmedabad, Jaipur,
eCommerce, Media & Cloud, Big Data, IOT, leaders
PRIVATE (up by 55% YoY) Ent-tech, Edu-Tech, AR/VR • Free office space for a tenure of 6 to 12
Lucknow, Chandigarh, months
Fin-Tech
etc.
40% | 60% IIM IIT

• Access to faculty
Ahmedabad, Kanpur, ML/ AI, Analytics/ Kozhikode Roorkee
90 Bhubaneshwar, Multiple Advanced Analytics,
• Access to active eco-system of mentors,
ACADEMIC (up by 29% YoY) funders, entrepreneurs and industry experts
Guwahati, Roorkee, IOT • Creative and supportive work environment
Patna, etc.
15 30% | 70%
Analytics/ Advanced
• Strategic mentorship
GOVT. SUPPORTED (up by 25% YoY) Kochi, Goa, Trivandrum, Multiple • Access to govt schemes
Analytics, Cloud, IOT • Legal & Statutory Support
Ahmedabad, etc.
42
Source : Zinnov Research & Analysis, Press Articles, incubator/Accelerator Website
GOVERNMENT START-UP POLICIES ACROSS YEARS AND FOCUS AREAS GOVERNMENT
FOCUS FOR
With 50+ active policies, Government continues to support the start-up ecosystem in India START-UPS
Policy Focus Areas 56 # of active Government policies targeted at start-ups

• Patent Protection: SIP-EIT
• National Clean Energy Fund (NCEF) Refinance
• Pradhan Mantri Mudra Yojana (PMMY)
Funding Support • MSME Market Development Assistance
• Dairy Entrepreneurship Development Scheme
• IREDA Scheme For Discounting Energy Bills
• Loan for Rooftop Solar PV Power Projects
& Incentives • Revamped Scheme of Fund for Regeneration of Traditional
• Enhancement of Competitiveness in the Indian Capital
• Credit Enhancement Guarantee Scheme
• Udaan Training Programme For Unemployed Youth Of J&K • Stand Up India
(54%) Goods Sector
• 4E (End to End Energy Efficiency)
• SIDBI Make in India Soft Loan Fund for Micro Small and
Medium Enterprises (SMILE)
• National Science & Technology Management Information • Aspire - Scheme for promotion of innovation,
Industry System (NSTMIS) entrepreneurship and agro-industry
• Atal Tinkering Laboratories
• Biotechnology Industry Partnership Programme (BIPP) • Industry Innovation Programme on Medical Electronics
Academia • Atal Incubation Centres (AIC)
• Extra Mural Research Funding (IIPME)
• Industry Relevant R&D
Partnership • SPARSH (Social Innovation programme for Products: • Promoting Innovations in Individuals, Start-ups and MSMEs
• High Risk-High Reward Research
Affordable & Relevant to Societal Health) (PRISM)
• Electronic System Design & Manufacturing (ESDM)
(35%) • Rapid Grant for Young Investigator (RGYI) • Science and Technology of Yoga and Meditation (SATYAM)
• Biotechnology Ignition Grant (BIG)
• Software Technology Park (STP) Scheme

Simplification • Raw Material Assistance
• Scheme to Support IPR Awareness Seminars/Workshops in
& Handholding • Single Point Registration Scheme (SPRS)
E&IT Sector
• Infrastructure Development Scheme
• Infrastructure Development Scheme
(12%) • Credit Linked Capital Subsidy for Technology Upgradation
2013 & Before 2014 - 2015 2016 Onwards

% Policies launched across
years1 37% 33% 30%
~30% of the active start-up policies have been launched post 2016
43
KEY GOVERNMENT INITIATIVES FOR START-UPS GOVERNMENT
FOCUS FOR
Govt. also announced key initiatives across funding, industry-academia partnership and simplification of policies START-UPS
Government’s “Start-Up India” initiative Government Initiatives announced since 2017
Jan’17
Start-up India Learning Program (4 Week Program)
 ~$1.5 Bn corpus for over 4 years to aid start-up funding
 Credit guarantee Trust to support flow of funds Free online entrepreneurship program in collaboration with UpGrad through
Funding Support  No Capital Gains Tax while Income tax waived off for 3 years structured learning
and Incentives  Tax Exemption on Investments Above Market Value
May’17
Extends Definition of Start-ups
 Atal Innovation Mission to boost innovation & encourage youth Overall age limit has been raised for all start-ups to 7 years
Industry-  Focus on PPP model to create 35 new incubators and 31 Biotechnology firms saw the limit raised to 10 years from the date of
innovation centers incorporation
Academia  Set-up 7 new Research Parks with ~$1.2 Mn investment into each
Partnership and  5 Bio-Tech clusters to be established
June’17
Incubation
Start-up India Hub
A virtual online platform for all stakeholders of the entrepreneurial
 Self-certification to reduce regulatory liabilities ecosystem in India to discover, connect, and engage with each other
 Easy registration through mobile app
Simplification and  Fast tracking patent examination and providing rebates
 Legal support to Start-ups Aug’17
Handholding  Simplifying public procurement rules and support faster exits
FDI for Start-ups
As per Department of Industrial Policy and Promotion (DIPP), start-ups can
raise up to 100% of funds from Foreign Venture Capital Investors (FVCIs)
44
Source : Zinnov Research & Analysis, Action Plan start-up India report, Press Articles, Stand Up India website
CORPORATE INITIATIVES FOR START-UPS ROLE OF
CORPORATES
Increasing advent of corporate initiatives – both Indian and Global –focused at nurturing the start-up ecosystem
Key Levers
Access to
Engagement Models Access to Coaching & Funding &
Facilities / Illustrative Examples
Description Market Mentorship Grants
with Start-ups Infrastructure
Acts as a promising way for Corporates to YES Bank launched its Apple announced its
INCUBATORS / better understand and leverage emerging business accelerator for first App Accelerator in
ACCELERATORS technologies Fintech in March, 2017 Bengaluru
Venture Arm setup a fund of Announced $30 Mn fund

Dedicated funds for Start-ups to aid them in association with Israel-
$170 million to nurture
CORPORATE FUNDS across financial, technological, customer
Advanced Tech start-ups based Teva for Health-
acquisition, etc. tech start-ups
START-UP Corporates partnering with start-ups to

Launched Foundry acting as Set-up Innovation labs in
a platform connecting India to ride the Fin-tech
PARTNERSHIPS FOR co-develop solution across an existing use
Unilever brands with and emerging tech wave
case area
JOINT GTM
Acquired India’s Halli Labs
START-UP Acquisitions to build tech capabilities, Acquired FreeCharge from in July 2017 to build new
market expansion and acqui-hire Snapdeal for $60 million ML based innovative
ACQUISITIONS products
Actively engages with start- Collaborated with Tie

ENTREPRENEURSHIP Participation in such events opens up new up communities such as Bengaluru to launch an
avenues for corporates for idea
NETWORKS / SIGs1 generation, validation and business deals
MobileMonday, Start-up
Week, etc.
IOT SIG
Organized India’s first Organized a Blockchain

EVENTS & Help reveal new insights and use cases for Insurance-tech hackathon to hackathon for start-ups to
problem solving using technology / tap talent from start-ups & create novel prototype
HACKATHONS emerging technologies institutes product
Note: 1 SIG: Special Interest Groups – Community with a shared interest in advancing a specific area of knowledge such as IOT, Analytics, Addictive Manufacturing, Mobility etc. 45
Source : Zinnov Research & Analysis, Press Articles, YourStory
NEW START-UP “SUCCESS METRICS” & SUCCESS STORIES
SUCCESS
While Funding has been the de-facto success parameter, Indian start-ups are now exhibiting newer “Success” STORIES
parameters
REVENUE & REVENUE

1 GROWTH E-platform for SME working capital P2P lending platform Online automobile transactional
marketplace
620% Revenue growth YoY achieved 300% Revenue growth YoY achieved Revenue Growth of 600% YoY in 20163
in FY171 in FY172
PROFIT MARGIN /
2 BREAK EVEN Hyper-local grocery start-up HR & Payroll Management Solutions Provides premium washing
Achieved operational break-even in 2 Achieved operational break-even in 1 Break even in less than a year
years4 since inception in 20156
year5
# OF CUSTOMERS /
3 CUSTOMER GROWTH
Enables SMBs to build websites instantly Fintech / Consumer finance start-up e-Comm for fresh, chemical-free seafood
225% CAGR growth in Customers from More than 10,000 customers More than 80,000 customers across 5
2013 to 20177 onboarded in 2 years8 cities in 2 years alone9
4 REPEAT CUSTOMERS AI based search for Fashion Industry Online medicines ordering & delivery Food Tech – Offers Meal Packages
Achieved 85% repeat customers within Achieved 75% customer retention 60% repeat customers since inception
2 years10 rate since inception in 201411 in 201412
Source : Zinnov Research & Analysis, 1Inc42,2Faircent Website,3Business Standard, 4Business Insider, 5iamWire, 6YourStory, 7,8FinancialExpress,9,11GadgetsNow,10Entrackr, 12The Hindu 46
NASSCOM 10,000 Start-ups Program
IMPACT OF NASSCOM 10,000 START-UPS
About 10,000 Start-ups Impact

10,000 Start-ups is an initiative by India's premier IT industry  10 warehouses incorporated since its
body NASSCOM to scale up the start-up ecosystem in India inception in 2013
by 10x through incubation, funding and support for 10,000
technology start-ups in India over the next ten years. The  Incubated ~ 300 start-ups across
program's vision is to: warehouses with more than $40.7 mn
funding raised
Foster entrepreneurship and build entrepreneurial
capabilities at scale  800+ high impact events conducted in 22
cities - attended by 35,000 attendees
Strengthen support Impact 10,000 tech  Initiatives impacted 2468 start-ups - out of
system for tech start-ups through F.A.M.E. which 327 received funding, and all start-ups
startups model by 2023 received mentorship
NASSCOM 10,000 Start-ups Programs

Virtual Program/Warehouse Program NASSCOM Industry Partner Program (NIPP)
10,000 Startups Virtual Program is designed to help startups who are NIPP is India's largest industry backed corporate innovation program,
product ready and have reasonable traction. Our industry-wide supporting open innovation initiatives. It is designed to foster sustained
connects and huge partner network ensures that the right engagement with startups, developers and the broader ecosystem.
opportunities are created for these startups. The program is a series
of small and big sessions and workshops such as Mentor 101,
Investor 101 and other equally impactful initiatives to ensure that the
startups scale to the next level.
48
APPENDIX
PROJECT SCOPE & METHODOLOGY
Introduction List of Data Sources

The start-up report evaluates the current scenario of Indian start-up ecosystem and gauges India’s position as a global start-up
hub. This report analyzes prominent verticals such as Fin-tech, Health-tech, Enterprise Products etc. along with the adoption of
technologies such as Cloud, Analytics, Artificial Intelligence, IoT etc. and the recent investment trends. Public Sources:
• NASSCOM 10,000 Start-up Database
• YourStory
1 2 3 4 5 • CrunchBase
START-UPS • Angel List
CLOUD & • LinkedIn
START-UP FUNDING M&A SOLVING
ADVANCED • VCCircle
LANDSCAPE ANALYSIS ANALYSIS SOCIAL • Start-up Websites
TECH FOCUS
PROBLEMS • Trak.in
• Investor Websites
• Media Articles
• Incubator/Accelerator Websites
6 7 8 9 10
GOVERNMENT Zinnov Repository:

MORTALITY INCUBATORS / ROLE OF SUCCESS
FOCUS FOR • Zinnov tech product start-up database
ANALYSIS ACCELERATORS CORPORATES STORIES
START-UPS
Expert Discussions:
• 20+ Technology product companies/ start-ups
• 30+ Interactions with VCs, Angel Investors,
The report will help Indian as well as global stakeholders (start-ups founders & employees, investors, government, regulatory and Incubators/ Accelerators
bodies, incubators, accelerators, students) in identifying key growth areas, drivers, policies and start-up support ecosystem
50
DEFINITIONS – START-UPS, INVESTORS AND INCUBATORS/ACCELERATORS
Intellectual Property (IP) backed technology product/platform; eCommerce/ aggregators using digital platform for
customer engagement
• Incorporation Year: Companies incorporated in 2012 and beyond

Start-ups
• Founder: Founding members should be of Indian origin
• Headquarters: Company headquartered in India OR outside with product development centre largely in India
• Product: Intellectual Property backed technology product OR technology platform OR eCommerce OR Aggregators
considered
• Investment by firms such as Venture Capitalist (VC) Firms, Corporate VCs

Investors
• Angel Investments by individuals in their personal capacity
• Investments by incubators & accelerators
• Incubators help start-ups in idea development, and • Accelerators support start-ups in building prototypes,
developing prototypes. scaling by providing help for fundraising, brand building,
They typically offer: customer growth. They typically offer:
Incubators/  Office space  Shared resources
Accelerators  Research labs  Developer tools
 Library  Co-creation/co-innovation
 Start-up boot camps/ e-summits  Client-specific solution
 Alumni support  Investor connect/ VC sessions
 Faculty & industry mentorships  Business mentorship
51
VERTICAL DEFINITIONS
Provide product/ services from multiple sources

Provide learning solutions & services through
| Selling of goods & services on the internet
E.g. Both Horizontal & Vertical – such as Fashion & Lifestyle, Grocery,
technology
Home Décor, Travel & Transport, Food, Coupons, Events, Real Estate E.g. Learning Apps, Online Education Services, Education Advisory
etc. Platform, Aggregator of Educational Institutions
eCommerce | Edu-tech
Aggregators
Enables financial services and payments through Provides logistics services and supply chain
technology management
E.g. Online Banks, Financial Management Apps, Payment E.g. Logistics and Distribution Platform, Fleet Management,
Management Platforms, Crowdfunding Platforms, Lending Warehousing, IoT Platform for Logistics, IoT Platform for Goods
Fin-tech Marketplace, Money Transfer Platform, Expense Management
SCM & Logistics Transportation Marketplace
Provides technology platform for solving Technology enabled companies supporting food
healthcare problems industry
Health-tech E.g. Medical Solutions, Marketplace for Health Services, Health Lab Food-tech E.g. Online Food Ordering, Restaurant Management Cloud Solutions,
Aggregators, Wellness Platforms, Online Pharmacies, E-Diagnostics, Food Discovery Platform
Ambulance Aggregator
B2B Enterprise Product companies targeting Media & Ent Tech

Enterprise Product Provides content for entertainment across web
Horizontal solutions for Large Ent. / SMBs (Including Gaming)
and mobile medium
E.g. HR Management, Workforce Management, Solution & Platform E.g. Gaming, News & Media Apps, Live Streaming Apps, News
Provider, Technology Solution Providers such as Marketing, CRM, Platforms, Event Management Apps, Video Intelligence Apps
Sales & Marketing solutions, AI/IOT Platform Solutions,, etc.
Manufacturing
Travel & Hospitality (incl. Auto)
Tech companies engaged in supporting travel Engaged in manufacturing of tech enabled
industry devices or machines
E.g. Car Rental, Car Pooling, Bus Pooling, Hotel Booking Services, E.g. Electric Vehicles, IoT based Predictive Maintenance of Machines
Travel Planning, Travel Packages Portal, Travel Collaboration
Community.
52
MAJOR CHALLENGES FACED BY START-UPS IN INDIA
LANDSCAPE
Talent and global market access – top areas to be addressed for a sustainable growth of the ecosystem
2014 2015 2016 2017

Major Start-up Challenges How have they been addressed over the years
• While early and growth stage funding saw improvement, availability

Seed stage funding continues to be of seed stage funding continues to be a challenge
1 Funding a challenge Funding Funding $3.8-4 Funding
• Funding over the years has seen a decline, from $4.9 Bn in 2015 to
$4.9Bn Bn ~$3.6Bn (E) $3.6 Bn(E) in 20171
• 45% start-ups feel that finding the right skilled talent is a key
Skilled talent, stability of talent and challenge2
2 Talent availability of advanced tech talent
“Innovation and lack of skilled personnel remain major pain points for most of the
• NASSCOM, along with other industry associations are working
remain top challenges towards improving the talent and skilling landscape
Start-ups” IAMAI Survey
• Corporates actively running live POCs and providing market access to

3 Market Access / Access to customers remains
another key impediment for
start-ups
• Incubators / Accelerators (I/As) grew by 35% and play critical role in
Go-To-Market majority start-ups I/A* – 80+ Corp Investors - 12
I/A* – 140+
Corp Investors - 35
I/A* - 190+
GTM activities of start-ups1
• Over 56+ active start-up policies launched by the Govt.

4 Government Lack of comprehensive dedicated • Govt. announced $1.5 Bn corpus for funding Start-ups
start-up policies before 2015 • However, 93% of start-ups say that they’ve not been able to realize
Policies Start-Up India
announced in Aug,
Atal Tinkering
Laboratories launched
Start-up India HUB
announced in June,
any Govt benefits under Start-up India Policies3
2015 2017
5 Product Challenges across identifying • ~50%+ start-ups cite “Building Products” as the 1st challenge; 20%
product owners, R&D capabilities, feel that “Minimum Viable Product” is another challenge4
Management testing and market fitment 36k - # of 47k - # of • However, expected rise in the availability of Product Managers in
Product Managers Product Managers India – set to increase to 68,000 by 2020 (overall India)5
Low Medium High

Intensity of Challenge
Intensity Intensity Intensity
Note: E – Estimated based on H1-2017 Funding; * I/A – Incubator / Accelerator; 1 Zinnov Start-up Funding Analysis; 2 Survey Report by Athena; 3 Press Article Inc42; 4 NIT University Survey of Product Start-ups across
the Globe; 5 Google & Accel Partner Report 53
Source : Zinnov Analysis, LinkedIn, CrunchBase, YourStory, Inc42
LOCATION ANALYSIS OF 2017 H1 FUNDING1
FUNDING
Delhi NCR and Bengaluru continue to garner a mammoth share of 75%+ of the overall funding value
> 30 % $730 Mn+

High $600 Mn+ Delhi NCR funding
(41%) (33%)
led primarily by DELHI NCR TOP DEALS BENGALURU
Funding [91 Deals] [97 Deals] Oyo Room’s $250
Mn funding (Aggregator/ (Aggregator/
$ 250 Mn $ 80 Mn
DELHI NCR BENGALURU eCommerce) eCommerce)
(Aggregator/
$ 21 Mn (Aggregator/ $ 70 Mn eCommerce)
10 – 30 %
eCommerce)
Medium (Aggregator/
$ 15 Mn (SCM & Logistics) $ 15 Mn
Funding MUMBAI
eCommerce
$250 Mn (14%)
[61 Deals] $ 15 Mn (Fin-Tech) $ 12 Mn (Fin-Tech)
(Recruitment
$ 15 Mn (Edu-Tech) $ 10 Mn Solutions)
< 10 %
Low
HYDERABAD PUNE KOLKATA AHMEDABAD CHENNAI JAIPUR
Funding
$50 Mn $35 Mn $25 Mn $25 Mn $22 Mn $20 Mn
[13 Deals] [6 Deals] [5 Deals] [4 Deals] [8 Deals] [4 Deals]
*Bubble size represents the overall # of start-ups in that city
Note: 1 Estimates based on average deal size and number of deals (extrapolated based on number of deals in first two quarters) across cities, Deals worth $1.8 Bn already closed by end of H1-2017; Other cities that
raised funding in H1-2017 includes Kochi, Goa, Surat, Chandigarh, Trivandrum etc. 54
KEY REASONS FOR ACQUISITIONS MERGER &
ACQUISITIONS
50% of M&A for building tech capabilities, up from 17% in 2016
M&A break-up by key reasons for acquisitions
(Total M&A = 50 in H1 2017)
50% Up from 28% Down from 13% Down from 11% Up from
17% in 40% in 15% in 8% in
2016 2016 2016 2016
Building Tech Market Expansion Product Portfolio Acqui-hire

Capabilities Expansion
Expand capabilities across Analytics, Expand into new markets, geo expansion, Strengthen position within existing Acquisition to acquire talent of the acquired
Innovation, Platforms, etc. enhancing business model and area of segment, expansion of product portfolio company
expertise
Acquisitions by Indian Corporates Acquisitions by Global Corporates Acquisitions by Indian Start-ups

Acquirer + Acquired Acquirer + Acquired Acquirer + Acquired
Leverage Zapr’s platform to detect Enhance products through Ramyan’s Strengthen its technology platform
offline media and enabling better unique Customer Experience through StyleSpot's product
(Vertical: Aggregator / discovery platform
(Vertical: M&E) understanding of mobile audience (Vertical: Enterprise Management (CEM) Platform eCommerce)
Product)
Use Seynse Digital Financial platforms Leverage FinitePaths platform to offer Integrate Fitard's capabilities of real
and their algorithms to build new (Vertical: Enterprise
superior customer experience time analysis of users
(Vertical: Health-
(Vertical: Telecom) products Product) Tech)
Incorporate Exclusif’s tech capabilities Jobspire will be integrated with Leverage Shoppist’s NLP-based
in the space of SMB customized (Vertical: Prof. Services) JustCode to strengthen its core recommendation capabilities to
(Vertical: Aggregator
(Vertical: Enterprise create a personalised experience
Product) solutions products and tech capabilities / eCommerce)
55
INCUBATORS / ACCELERATORS INCUBATORS /
ACCELERATORS
Incubators/Accelerators differ in their focus areas and the type of support they provide to start-ups
Govt.
Corporate Private Academic
Founded: 2017 Founded: 2017 Founded: 2017
supported Founded: 2016
Bengaluru Mumbai Bengaluru Bengaluru
Program Period 4 Months 4 Months 12 Months 4.5 Months (20 weeks)
$100,000 Seed Funding; 8% Equity

Grants $15,000 (Equity Free Grant)
charged
No Charges 2% Equity
Batches / Cohort of 6 Start-ups 12 Start-ups 12 Start-ups NA

Start-ups
 Mentorship from financial sector  Industry connects
leaders  Strategic mentorship
 Business mentorship  Mentorship by faculty members
 Demo day to pitch to investors  Access to Govt. schemes
Start-up Support  Technology mentorship  Networking events, seminars, etc.
 Access to ecosystem partners  Investment support
Initiatives  Target customer access/POC’s  Access to investors
(Banks, Insurance Companies, Retail  Business acceleration
 Investor connects  Access to Govt. schemes
NBFC’s etc.  Legal & statutory support
 Media & marketing support  Media visibility
Maker Space, Rapid Prototyping Lab, Yes – meeting rooms, conference

Co-working Space Yes No
Sandbox Center, Demo Room rooms at subsidized rates
Software & Hardware design support,
Access to ONTAP Cloud, SDK,
Tools/Software 100K Cloud Credits - UI/UX and Architecture level design
Collaboration & Productivity Tools
support
Cloud, IoT, Artificial Intelligence, Data

Tech Focus Area Security, Storage, Analytics
Fin-Tech - IoT, Security
Banking, Consumer Finance, Insurance Smart Cities, Energy & Utilities, Waste
Focus Verticals Multiple
Tech, Payments
Horizontal
Management, Clean Tech
56
Source : Zinnov Research & Analysis, Press Articles, Incubator/Accelerator Website
TIMELINE: JOURNEY OF SEVERAL START-UPS FROM INCUBATORS/ACCELERATORS1,2 INCUBATORS /
Start-ups graduating from Incubators / Accelerators continue to have both success and failure stories ACCELERATORS
Timeline: 2012 2013 2014 2015 2016 onwards Active

Currently expanding product
capabilities
Seed: Undisclosed Early: $ 2.5Mn Growth: $ 5Mn
Plans to grow users through the

funding raised
Non-Equity Assistance Seed: Undisclosed Seed: Undisclosed Growth: $6 Mn Growth: $1 Mn
2017: Lead Investor : IdeaSpring
Start-up Deep-Dive (2012 Incepted Start-ups)
Capital
Non-Equity Assistance Seed:

$ 600 K
Signed MOU with China Lodging
Company for joint GTM
Seed: Undisclosed Seed: Undisclosed Seed: Undisclosed Growth: Undisclosed Expansion: $100 Mn Expansion: $90 Expansion:
Mn $250 Mn
Acquisition primarily for Acqui-
hire for AI space
Seed: Undisclosed Acquired by Facebook
Already accounts for 50% of the

total Market share
Seed: $20k Seed: $500k

Acquisition to improve mobile
experience for customers
Seed: $20K Acquired by Inshorts
Seed: $1.2M
Seed: 800K Failed

Start-ups
Seed: $75K
Seed: $30k
Note: 1 Definition of funding stages based on funding amount: Seed Stage - <$1 Mn, Early Stage - $1-5 Mn, Growth Stage - $5-20 Mn, Expansion Stage - >$20 Mn; 2 Includes data for funding received till Jul’2017
Source : Zinnov Research & Analysis, Press Articles, AngelList, YourStory, Inc.42 57
STATE GOVERNMENT INITIATIVES FOR START-UPS GOVERNMENT
FOCUS FOR
Karnataka, Maharashtra and Telangana emerge as the leading states in terms of start-up focus and initiatives START-UPS
State Heat Map for Focus on Start-ups & Policy

Formulations Karnataka Maharashtra Telangana
Signed Pact with DigitalOcean (Sep’17) Setting up of an Innovation Ecosystem Early-Stage Fund To Promote
• Signed MoU with DigitalOcean to provide cloud (Jul’17) Entrepreneurship (July’17)
infrastructure and support to start-ups ($1000 • Government of Maharashtra, FICCI and University • Government to set up $310 Mn (INR 2,000 Cr)
15+ States/ UTs have already Cloud Credits) enrolled with the Karnataka Start-up of Texas Austin-USA, collaborated to set up master fund for investment in sector-specific start-
Cell Innovation Ecosystem in Maharashtra to drive ups, along with general venture capital funds
formed start-up policies creation of at least 1,000 enterprises as technology • Plan to set up a $38.7 Mn (INR 250 Cr) T-SEED fund
start ups, create thousands of jobs and create INR to support seed stage start-ups
6,000 crore (US$ 1 billion) impact in the state
Start-up Elevate Programme (May’17)

• Identify 100 innovative start-ups across sectors in
the state and enable access to mentors,
networking, funds, idea validation, incubation, etc. 100% waiver to start-ups or incubators Expansion plans to its T-Hub Incubator
• $620 Mn allocated for the initiative (April’17) (March’17)
• Proposed to issue a 100% waiver to start-ups or • Five fold expansion of T-Hub, a PPP initiative across
3 incubators on stamp duty and registration; 50% 300,000-350,000 sq ft for development of start-ups
proposed waiver on their second transaction as in the state
2 • Post operations scheduled in 2018, the facility
well
Focus levels across states in terms of • Announced to compensate for the cost of obtaining would be the largest of its kind in the world
Investment in Incubation Hubs (Nov’16) an Indian patent (up to $0.3 Mn) and international
start-up policies • Govt. announced to invest $4.5 Mn into a start-up patent (up to $1.5 Mn)
incubation hub at 35,000 sq ft plot in Bengaluru
1 High : Several policies already established • Plan to set up 5 start-up incubators across the state
at a cost of $6.8 Mn to nurture innovators in tier-
2/3 cities
Drafted Maharashtra State Innovation Telangana’s Open Data Policy
Medium : Start-up policy Established and Start-up Policy (April’17) • This policy enables information from various
• Proposes to establish incubators in 12 prominent government departments to available online easily
high demand sectors including construction, to enable transparency
Low Focus: Start-up policy work in progress production and manufacturing, textile, automotive, • It enables start-ups in the state to address public
Tourism Promotion Programme by hospitality, health care, banking & finance and issues by finding solutions using the information
Government (Sep’16) Insurance online
• 8 innovative tourism related start-ups were • Plans to attract an investment of $780 Mn while • Second state in India after Sikkim to have such a
No Focus: Yet to frame a policy developing at least 2000 start-ups in 5 years policy
selected for funding and support from Karnataka
Tourism Department
• Announced assistance totalling to about $0.3 Mn to
the chosen start-ups to work on their ideas
58
Source : Zinnov Research & Analysis, Action plan start-up India report, Press Articles, Stand Up India website
CASE STUDY – FAILED B2B START-UPS MORTALITY
ANALYSIS
Several reasons for B2B start-ups closing down operations over the past several years
Hyper-local logistics Platform for loyalty Discovery and pitching

provider cardholders mobile platform
Gurgaon, NCR Delhi ShotPitch Gurgaon, NCR
Inception Year: Dec 2014 Inception Year: Feb 2013 Inception Year: Dec 2014
Total Funding: $0.15 Mn Total Funding: $0.17 Mn Total Funding: $2.8 Mn
Shut-down: 2016 Shut-down: 2017 Shut-down: 2016
“The B2B model demanded “The market we were targeting “It was not because of funding
heavy working capital and that was not mature enough since or product fit, but we had to
sort of kept the VCs away” most people in India do not shut down due to reasons
have multiple credit cards” which were out of our control”
Siddharth Arora Nidhi Gurnani Prashant Sharma
Co-Founder Co-Founder Founder
Funding & Cash Related Issues Less Demand and lack of funds External Factors
High Working Capital Business: Difficulty in Customer Acquisition: Legal Complications

Witnessed increasing working capital demands Very few multiple credit card holders Possible legal complications arose due to the
nature of the platform
Unable to Raise Funds: Lack of funds to educate customers:
Multiple tries with various VC’s to raise $2 Mn Company needed deep pockets to educate SEBI Regulations
in funding, but were not able to close a deal customers about product safety and security As per SEBI notice, such platforms were termed as
violating laws on private placement of equity
59
Source : Zinnov Research & Analysis, Press Articles, YourStory, Inc42, LiveMint
CASE STUDY – FAILED B2C START-UP MORTALITY
ANALYSIS
PepperTap Case Study
Gurgaon, NCR Total Funding: $51.2 Mn Shut-down Operations:

Founded: September 2014 4 Rounds of Funding April 2016
Started operations across

17 cities with a revised
Incepted in Started operations expansion plan of 75 Closes down operations
Gurgaon in Delhi & Noida cities by March 2016 Started operations
in 10 more cities
Sept Jan March Sept April
2014 2015 Low demand from 2016

30-40 daily Increase in 15,000-17,000 Experienced high City operations in
orders Tier 2 cities Agra & Meerut
customers & orders daily orders Cash burn upon
across NCR / other expansion and stopped due to
High competition
metros discounts low demand
reduced orders
Received funding
Seed: Series-A: Series-B: Series-B:

Funding $1.2 Mn $10 Mn $36 Mn $4 Mn
Used Funding for building technology (Mobile Apps) & expansion to 75 cities
Top Reasons for Mortality

• Excessive Cash Burn-out: Heavy discounts (2 hour delivery) which reqd. buffer capacity to be maintained & also led to non optimized fleet / logistics
• Non-Scalable Business Model: Relied solely on partners to maintain inventory | very less ~5% commission based revenue with low volumes
• Unrealistic Expansion Plan: Tried to expand too fast which their existing business model did not support
60
Source : Zinnov Research & Analysis, Press Articles, YourStory
NASSCOM®
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Mr. Pari Natarajan Mr. R. Chandrashekhar

Tier 1 cities8 continue to form the lion share (~80%)

BUSINESS FOCUS3 B2B start-ups

This report analyzes –

2.3X Revenue Raised over $155 Unicorns (>$1 Bn Valuation)

Improvement in the quality of start-ups

5000 – 5200 Down by ~29% YoY

Employee Pyramid – across start-ups incepted from 2012 - 20172

Split of Employee Segments 1% 5% 13%

Inception Year 2017 Inception Year 2014 Inception Year 2012

*Size of the bubble

Lowest Rating Start-up Activity Index Highest Rating

START-UP ACTIVITY INDEX (X-AXIS)

U.S. - Outlier China – Unknown

U.S. INDIA UK ISRAEL CHINA

4 TECH / ADVANCED TECH FOCUS

GOVT FOCUS & COUNTRY SPECIFIC

1 GOVT. FOCUS & INITIATIVES

U.S. - Outlier China – Unknown

Delhi NCR B2C 87%

25% B2B 38%

Mumbai B2C Kolkata

• ~80% start-ups are concentrated in tier 1 Cities

Promising start-ups across top tier-2/3 cities Other illustrative examples

Inception Year: 2015

Inception Year: 2012

Inception Year: 2014

Inception Year: 2015

VERTICALS B2C B2B

B2C B2B Aggregators / eCommerce 92% 19%

2016 77% 37% 87% 26%

Fin-Tech 70% 49%

<=25 yrs 20% Engineering 50%

50% of start-up founders ~30% growth in student Consistent increase in % of

Funding for start-ups incepted 2012

$2.1 Bn $1.8 Bn H1 2016 Funding H1 2017 Funding

Funding: $250 Mn Investors: SoftBank Vision Fund, Lightspeed

Funding: $80 Mn Investors: Accel India, SAIF Partners, Bessemer

Funding: $70 Mn Investors: Sands Capital, IFC, Accel Partners,

4 Funding: $21 Mn Investors: Vy Capital, SAIF Partners, Accel

5 Funding: $21 Mn Investors: Mahindra Partners, Eight Roads

6 Funding: $18 Mn Investors: Bessemer Venture Partners, Orios

Funding: $15.2 Mn Investors: Kalaari Capital, SAIF Partners,

Top 50 deals (i.e. 16% deals) accounted for nearly 9

Total across categories

Foreign VCs - most active

Note: 1 Estimated based on data recorded till the end of H1-2017;

# of Foreign Investors: 220+ $ Value of Funding: $1.2 Bn

Nasper Sands Capital

Sistema Asia Vertex

Blue Orchard Earlsfield

Softbank $250 Mn IMJ Inv.

China 6% Shunwei Cyber Carrier

Others2 2% 3% Vy Capital $21 Mn

Funding Split by Business Focus (B2C/ B2B)1.2

B2B share of funding increased

Prominent B2B Funded Start-ups

Distribution of Indian start-ups by key Industry Verticals

*Bubble size represents the Vertical Aggregator /

200 400 600 1100

Total Number of Start-ups

Top Fin-tech Sub Verticals Illustrative start-ups