Fortune India Startup Summit: India’s startup ecosystem at an inflection point; the next decade hinges on capital, policy, and community

At the Fortune India Startup Summit held on Thursday in Bengaluru, Shweta Rajpal Kohli, President and CEO, Startup Policy Forum, and Aditya Shukla, Partner, Bain and Company, discussed how India’s startup ecosystem has evolved and what lies ahead.

Kohli said the ecosystem is entering a new phase of maturity. “It has taken 10 years of Startup India, or the last 20 years of VC firms coming to India and building out this ecosystem, for now, the startup industry to reach a stage and phase where we’re truly seeing that impact and meaning come out,” she said.

She added that the ecosystem is now at a turning point. “We’re talking about several new age companies that are listed. We’re talking about liquidity events finally coming for VC firms. So we’re seeing a stage, which I believe is an inflection point for the Indian startup ecosystem, where now, that ecosystem, that word ecosystem truly matters.”

According to her, maturity is enabling knowledge-sharing within the ecosystem. “This is the time when a founder who’s just listed is able to take part in that conversation in the ecosystem and say 'I have learnings and lessons that I can give to you'. Or there’s a VC firm who finally has liquidity to talk about.”

Shukla agreed that the ecosystem has progressed but said gaps remain. “We have traversed a very interesting journey. A lot of that journey also stems from individual brilliance, of founders who managed to kind of hustle and get the right support along,” he said.

He outlined the core building blocks required going forward. “When I look at what founders want, and what some of the global ecosystems have shown us as best practices, I think there are four or five things that you need to solve for. One, of course, is capital. The second is having top talent availability. Third is, creating an environment, a physical environment to foster innovation and entrepreneurship, and to create stories of relatable and inspiring figures.”

On funding, Shukla emphasised the need for long-term capital. “We need more patient capital because a lot of the growth that happened in the last 10 years were consumer tech companies, which would have shown faster growth in some metric. If you’re going to focus on deep tech, AI, native solutions, you need to have patient capital.”

He also pointed to the need to expand startup ecosystems beyond major hubs. “How do you create an ecosystem environment there, whether it’s incubators, whether it is Y Combinator-like setups… how do you create that? Those are two—capital plus this environment, which I think are key levers for growth.”

Kohli stressed that ecosystems are built through multiple stakeholders working together. “For any ecosystem to thrive, you need both breadth as well as depth,” she said.

She added that capital, infrastructure and institutions follow founders. “The second stakeholder, the VCs, the capital, right? And they’re also going to go where the founders go… Then you’re going to see, obviously, the infrastructure built around it… And then there are the other stakeholders we forget, the government and the media… It’s a multi-stakeholder effect at the end of the day.”

On global learnings, Shukla highlighted the importance of exits and capital cycles. “If you have exits, if you create exits… that will create liquidity for the founders. It will allow them to give back. And then it also creates confidence in the ecosystem,” he said.