G20 sherpa Kant underscores: India’s startup success hinges on robust governance and local funding.

To lead as the premier startup nation, India must prioritize robust corporate governance and emphasize domestic financing over foreign investments, stated India’s G20 sherpa Amitabh Kant on Thursday.

Highlighting the importance of corporate governance, Kant emphasized that startups transitioning into unicorns must evolve into large companies, which necessitates adherence to good governance practices, comprehensive audits, and strong financial oversight. He noted that while startup entrepreneurs typically prioritize innovation and disruption, they should also focus on governance principles.

Kant underscored the need for Indian entities such as insurance companies, pension funds, large families, and corporations to invest in the country’s startup ecosystem. He emphasized reducing reliance on foreign funding, suggesting that India’s startup ecosystem should be sustained by domestic finance.

Proposing the creation of a $5 billion fund for patient capital, Kant suggested establishing a fund of funds to support venture capital firms in conducting due diligence and backing young deep tech startups.

According to the ‘Unicorn 2.0: Adding the Next Trillion’ report by CII, sectors like retail, e-commerce, financial services, manufacturing, SaaS, and digital are poised for significant growth. The report also noted India’s burgeoning unicorn ecosystem, with 114 unicorns contributing significantly to the country’s GDP growth.

Abhiraj Singh Bahl, chair of the CII Unicorn Forum and cofounder of Urban Company, emphasized the multifaceted factors driving startup growth, including access to capital, strategic mentorship, and a conducive ecosystem for talent and disruptive ideas.