Between 2013 and 2018, an estimated 7,200 – 7,700 start-ups were incepted. With the start-up ecosystem thriving, it is expected that there will be a close integration of start-ups and conglomerates for delivering tech-enhanced services. Therefore, the start-up base is expected to grow by 12-15% on an annual basis.
Changing global work patterns and a pro-tech government stance is likely to encourage public enterprises and private businesses to adopt newer technologies. Thereafter, the ecosystem of start-ups is expected to dive headfirst into the race to apply these technologies to solve unique Indian problems in sectors as diverse as construction, agriculture, urban transport, energy management, affordable healthcare, etc.
Apart from the phenomena of ‘Digital India’ that the country is witnessing, there are few crusades seen at the international level that will eventually drive the growth of start-ups in India. One of the major one being that of migration. The US, where a significant proportion of the IT talent of India migrates every year, proposed changes to the H-1B visa regime which has disrupted migration to the country. This is likely to impact global corporates, who are now anticipated to prefer Americans over Indians across US-based offices. It is believed that these changes might result in a certain degree of reverse migration to India in the medium to long term.
The FY2017 annual report by United States Citizenship and Immigration Services (USCIS) indicates that the movement of Indian job-seekers to the US decreased by 4.1% y-o-y in FY 2017, while the number of migrants approved for continuing employment increased by 12.5% during the same period. Given the skill sets of these migrants, their presence in India would contribute significantly to the entrepreneurial evolution in the country, particularly from the perspective of a start-up culture, given that India is the third largest destination for start-ups in the world. The strengthening talent base is also expected to encourage tech companies to increase hiring of local talent over the next 10 years.
Additionally, the increasing millennial and generation Z population is expected to be account for 77% of the overall working population in India by 2030. The housing needs of such population groups are slightly unique. They look for convenience, service and a frictionless experience while buying/leasing a residential property. Companies are tapping into this unexplored segment to cater to the demand; these start-ups target both professionals (co-living) and students (student housing) to expand their horizon. As per MHRD, India has over 36 million students currently in the higher education space. Student housing shall continue to witness robust demand as there has been a 67% increase in the student population and a 29% increase in the number of universities since 2010. Metros and education hubs such as Hyderabad, Pune, Bengaluru, Chennai, Indore and Kota will be the focus cities for developers due to high density of students and comparatively reasonable property prices.
This above-mentioned scenario leads to the emergence of ‘PropTech start-ups’. PropTech seeks to transform the Indian real estate sector by developing the best technology solutions for the real estate industry. PropTech start-ups is the new sustainable ecosystem for India.
This sector, although in its nascent stage, has several factors which are destined to make the country numero-uno PropTech destinations in the world. It is expected that by 2030, India will be the third largest real estate market in the world. The shift in progressive real estate developers, investors and start-ups from placing technology at the periphery to the very core of operations is already beginning to happen.
The future, however, will entail an amalgamation of human skills along with adoption of advanced technology in the real estate that will serve as an unbeatable combination for the growth of PropTech in the country. It is expected that realty sector will invest towards the benefits of PropTech start-ups and witness this space evolving, as more and more companies will comprehend the potential of technology to transform their business.
Technology has enabled companies to digitize processes and make data-driven decisions about how to manage and use space. While the increased focus on effective space utilization has placed greater importance on workplace strategies, technology is playing a pivotal role in the successful implementation of these strategies. Several organisations are now investing in PropTech, which helps them monitor space usage and then optimise portfolios.
Prop Tech is the new start-up initiative that is a part of digitalization and this will aid transformation of real estate industry. The technological innovation in data assembling, designing and transactions will provide efficient services to both occupiers and landlords/developers. To finetune workplace strategies, one needs to monitor space usage and then optimise portfolios. Once data is analysed, patterns recognized, and solutions implemented, monitoring is required to further improve space utilisation.
Start-up sector which might be considered as an alternate asset will become mainstream industry by 2030. Additionally, as more investible asset classes emerge, more sources of funding are expected to emerge. The existing investment avenues are also expected to widen their investment horizon. India will witness new and emerging digital ecosystem as a key driver.
By 2025, it is expected that the digital economy will account for approximately 18-23% of the total GDP or, in nominal terms, USD 800 billion to USD 1 trillion. Broaden scope of investment, encouraged by supportive government policies, and adoption of new-age disruptive technologies will build India as the start-up hub by 2030.