RBI Survey brings out fascinating facts on Indian Startups

In view of the emerging importance of the start-up sector in the Indian economy, the Reserve Bank of India (RBI) conducted a pilot survey on Indian start-up sector during November 2018 to April 2019. The Reserve Bank of India released the Report on Pilot Survey on Indian Start-up Sector. Responses were received from 1,246 start-ups.

The pilot survey was aimed at collecting information on selective important characteristics of the start-up sector, viz., geographical, institutional and age profile of the sector, academic, professional and gender profile of the founders, motivational factors, turnover, workforce, target markets, types of products, technology used, sources of funds and future plans. The survey is intended to create a profile of the start-up sector in India and provide dimensions relating to turnover, profitability and workforce.



Long has been the belief that Angels and VCs are the primary set of investors for the Start-up Ecosystem. However, this might not be entirely true. As per the survey it is observed that the primary source of funding or the major source of investment in start-ups is ‘Family and Friends’. They have emerged as the Silent Investor for the ecosystem. According to the statistics nearly 43% of the 1246 start-up participants received their funds from their friends and family and only 19% of the start-ups where able to raise fund through Angel Investors and VCs. Easy accessibility and confidence on the founders can be the reason due to which friends and family have emerged as a primary source or “key driver” of investment to enable the start-up and to introduce new technology, allow creative destruction and generate jobs.

Debt has also been a common source of funding for today’s Start ups. Close to 40% of the participating start-ups are raising money through availing loans from institutions like banks, NBFC and ECBs. The survey found that only 15% of start-ups have been able to raise money from Foreign Investors and also 75% of the Investment has been for a ticket size of less than a 1 crore. Hence, it might be entirely possible that debt has been able to become a good alternative for Fund infusion.


About the financial performance of the participating start-ups the survey highlight that close to 70% of the start-ups have no or at an early stage of revenue. This might be due to the fact that majority of the start-ups have been formed in the last three years.

The survey showed Data analytics was the leading sector for Startups followed by health, education and agriculture. Surprisingly, Financial Services came quite late wherein 4.8% of the Startups were engaged in this particular Sector. Most of the respondents targeted business to business (B2B) channels for selling their goods/service and Urban India is still preferred while selecting the target audience by these Startups.


Unlike the popular believe that now a day start-ups are usually formed by college dropouts, the survey showed that nearly 88% of the founders had academic qualification equivalent of at least a bachelor’s degree. Moreover, around 70% of the founders, as per the survey had an average age of 30 years or more and 84% of the start-ups have 2 or more founders.

Clearly, based on the data it can be understood that entrepreneurs prefer to have some experience under their belt before starting up their business and are open to collaborate with others so as to create value for the business.


Startup’s are not only create innovative solutions through their business model but also has emerged as a popular Job creator for the government. The Report suggests almost 65% of the start-ups plan to hire more than 20 employees each in the next 2-3 years. This can be in the field of online marketing, big data analytics, machine learning and internet of things (IoT).

Various such interesting aspects have come out through this survey. These findings should be analysed properly and future actions need to be undertaken in this regards. The detailed report can be read over here.

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