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379 Tech Startups Launched & 87 Shut Down In India In 2012: Report

Around 379 technology product startups were launched in 2012 and 87 were shut down during the year, according to a study compiled by Microsoft Accelerator, India.

Mukund Mohan, the CEO in Residence, Microsoft Accelerator said the accelerator tracks over 6,214 entities which includes 3,948 technology product companies in India as well as service companies who are building products and side-projects where founders have generated significant traction or revenue. As per Mohan, the study has been compiled from face-to-face interactions with the founders of 65% of these companies and secondary data, although the closure data was entirely based on face to face interactions.

Here are some highlights from the study:

– 2012 witnessed a relatively lesser number of new tech product company launches with 379 companies launched this year as compared to 519 companies launched in 2011 and 452 companies launched in 2010.

– Bangalore has registered the highest number of new technology startups launches in the past five years, recording 591 new technology startups launches, followed by Delhi NCR which recorded 237 new launches and Chennai which recorded 203 new launches.

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eCommerce segment accounted for 33% of all the new tech entities, followed by B2B (Business-to-Business) segment which accounted for 24% of all the new tech entities and Consumer Internet segment which accounted for 12% of all the new tech entities. Mobile apps segment accounted for 10% of the new tech entities while SaaS (Software as a Service) segment accounted for 8% of the new tech entities and other segments accounted for 13% of the new tech entities

– Among the companies that shut down in 2011, around 49% of the companies were only six months to one year old, while 31% of them were less than six months old. 20% of these companies were 1-2 years old.

Bangalore registered the highest number of startup closures, registering around 70 closures as indicated by the graph below, followed by Delhi NCR which registered around 35 closures and Mumbai which registered around 25 closures. Note that these are approximations based on the graph below.

– 61 startups closed down due to the inability to raise funds, while 43 startups closed down due to the inability to collect money quickly and 39 startups closed down since the founders got a better opportunity.

Only 9% of the first time failed entrepreneurs have launched yet another company while 61% of the first time failed entrepreneurs have started working at a larger company. Remaining 30% of these entrepreneurs have started working at another startup.

– 135 firm founders have kept their firms as side projects while 36 founders have sold their firm and 19 founders have shut down the entity.

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