India’s startup ecosystem aims to secure a top position in the global technology industry. What’s pioneering the startups in India to transform the economic landscape? – Web 3.0. However, before deep diving into Web 3.0, here are some interesting facts.
The Information and Communication Technology industry grew 15% (2022 FY) with rising support from government schemes and highly skilled talent. Currently, at USD 227 billion, this industry aims to become a trillion-dollar economy by 2025 through business incubation.
Innovation in India has been the driving force behind the expansion of the ICT industry. India has the world’s highest number of Internet users (61 per cent), fueled by the cheapest Internet plans worldwide. But the most significant force has been the startups in India.
India’s startup ecosystem includes 105 unicorn tech startups out of 4,500. Startups in India are focusing towards emerging technologies such as –
- Blockchain
- Artificial intelligence (AI)
- Machine learning (ML)
- Augmented and virtual reality (AR/VR)
These technologies are at the core of the 3rd generation of the World Wide Web or Web 3.0.
What is Web 3.0?
Built on the core of decentralisation, Web 3.0 or Semantic Web offers users complete control over their data. The Web 3.0 platforms operate on peer-to-peer networks, giving users a more personalised internet experience. This experience enhances their ability to monetise content and privatise data since it’s hosted on distributed networks, not in a central server. Besides, tech giants like Meta, Alphabet, and Apple cannot control the Internet.
The advancement in Web 3.0 is uncovering opportunities in various industries and for the startup ecosystem in India. Mainly in terms of new technologies and agile business solutions, it offers better complex data management and, eventually, scalability.
Web 3.0’s prominence is observed in startups in India working on decentralised finance, crypto-wallets, decentralised autonomous Organisations (DAOs), non-fungible tokens, and gaming. It influences creativity and innovation in 3D web technology, decentralised social networks, Brands-as-a-Service, and the metaverse.
Indian Startup Ecosystem in the Web 3.0 Sphere
Across the innovation ecosystem, the adoption of Web 3.0 has accelerated worldwide, mainly due to the 320+ million cryptocurrency users.
Despite the rising innovation in India, only 2 per cent of the population uses cryptocurrency. Hence, Web 3.0-focused startups in India build solutions and develop nascent fields. These include:
- NFTs (Fancraze, Guardian Link) and NFTaaS (Lysto)
- Play-to-earn gaming solutions (Loco)
- Fintech platforms (InstaDapp, Polysynth)
- Short video-sharing platform (Chingari)
- Architecture-based startups (Biconomy, Persistence)
- Decentralised storage (Arcana)
- DAO (Superteam)
Web 3.0 innovation in India and its large-scale application started with Aadhar, a classic example of high-impact, low-cost technology. Along with this, technologies such as UPI, Jan Dhan and CoWIN have been widely applauded.
Today, the Indian innovation ecosystem has over 450+ active Web 3.0 Indian startups. Between 2021 and 2023, entrepreneurs founded over 160 startups out of the 450 total. Some known Web 3.0 startups include:
- CoinSwitch
- CoinDCX
- Polygon
- Wazirx
- Router
- Frontier
- Zebpay
- Rush
- Tegro
- One Rare
- Liminal
These and many more have gained a foothold in global markets as a part of India’s startup accelerator ecosystem.
What’s Fuelling India’s Web 3.0 Startup Ecosystem?
Investments have been the most significant fuel for startups, growing 37x since the beginning of 2020. Investors recorded a total investment of USD 1.3 billion in two years until Q1 2022.
Venture capital firms like – Coinbase Ventures, Sequoia Capital India, Light Speed, Alpha Wave, General Atlantic and Woodstock are becoming startup accelerators via accelerators to fuel growth. Through seed funding and series one investments, Web 3.0 and blockchain can contribute almost USD 1.1 trillion to India’s GDP by 2032.
Another factor fuelling the momentum of Web 3.0’s startup ecosystem is the digital talent pool. India has the third-largest blockchain talent pool in the world. Growing at a compounded annual growth rate of 120 per cent, with most having a background in finance. Despite the high growth rate, there is still a demand-supply gap. Incubators like T-Hub and Hyderabad are bridging the gap between the government and academia by creating an innovation ecosystem.
Future of the Web 3.0 in India
The blockchain-based Web 3.0 benefits various sectors in different ways. Government applications can include –
- Maintaining population records (identity, medical, education, electronic voting)
- Introducing a Central Bank digital currency
- Tracking physical and digital asset registration.
Smart contracts would also smooth operations for the BFSI sector and lead to decentralised microfinance programs. AI and ML can also lead to workflow automation in the education, manufacturing, pharmaceutical and healthcare industries. The applications don’t just stop there!
The travel, tourism, retail and entertainment startup ecosystem can introduce virtual loyalty programs and products, leading towards a creator’s economy.
Some issues need resolving with Web 3.0, which is still in early development. Startup incubators’ assistance is pivotal in creating regulation and more robust control to monitor cybercrime, illicit transactions, and abuse.
India’s startup ecosystem has the chance to shape Web 3.0 policies and regulations to evolve it into a truly ethical, open, and interoperable system.
