A new report reveals that India is home to over 1,100 active incubators dedicated to nurturing the startup ecosystem. The report titled "India Incubator Kaleidoscope 2024" was a collaboration between NSRCEL, the startup incubator at IIM Bangalore, and the Centre for Research on Start-ups and Risk Financing (CREST) at IIT Madras.

The findings show a steady increase in the number of incubators, with nearly half (48%) located in Tier I cities. Chennai stands out with a high concentration of academic incubators, accounting for 82% of its total. In contrast, Bengaluru and Gurugram lead in industry-focused incubators, with 71% and 84%, respectively.

Despite this growth, the report notes that India has only 0.8 incubators per million people, compared to 8 to 10 in countries like the US, UK, and China. This indicates a clear need for more incubators across the country.

Amitabh Kant, G20 Sherpa and former CEO of NITI Aayog, emphasized the critical role incubators play in the startup landscape. "Initially designed to help start-ups get off the ground, incubators have evolved to connect scientific expertise with business insights, attract funding for promising ventures, and raise public awareness about entrepreneurship", he explained during the report's launch.

Prof. Srivardhini Jha, a Professor of Entrepreneurship at IIM Bangalore and Chairperson of NSRCEL, added that while incubators make entrepreneurship more accessible, their impact isn’t widely understood. "This report fills that gap, underscoring the need to boost both the quantity and quality of incubation efforts across India".

Interestingly, only 8.2% of startups currently undergo incubation. Yet, 10% of incubators support a staggering 98% of those startups, highlighting an urgent need to improve the performance of underutilized incubators and increase outreach efforts to educate potential entrepreneurs about the benefits of incubation.

The report also highlights that incubation is particularly appealing to students, young professionals, women founders, and individuals with limited financial resources. Notably, sectors like AI/ML, data analytics, and biotech show high incubation rates, exceeding 12%.

Incubated startups tend to secure their first round of funding sooner than those not in an incubator—27.1% compared to 15.4%. Even though they represent a smaller group, incubated startups have won more accolades in various startup competitions and are more active in developing intellectual property.

Economically, the impact of incubated startups is significant. The report reveals that the average annual revenue for every 100 incubated startups in their early years is about ₹1,590 crores. By the ninth year after incorporation, the average asset value for these startups reaches approximately ₹10,627 crores.

However, the report notes a disparity in revenue performance, indicating that startups linked to industry incubators generate revenue that is 50% higher than those associated with academic incubators.

Overall, the findings illustrate the vital role incubators play in shaping India's startup landscape and the potential for further growth and development in this dynamic sector.