A short history of Indian startups, from Infosys to AI

How did it begin: the software services era?

The roots lie in 1981, when Infosys was started by seven engineers in Pune with a small sum of money. At that time licences, import controls and a scarcity of capital made new ventures hard. Economic reforms from 1991 opened the economy, and companies such as Wipro, TCS and Infosys built a large business serving overseas clients with Indian engineers.

These firms did not look like modern startups, since they sold services rather than products, but they trained a large pool of engineers and managers. They also showed that Indian companies could list on global exchanges. Many later founders came out of these firms.

What happened in the dot-com years?

Between 1998 and 2001, a first group of internet companies appeared. Rediff, Sify and Naukri were early names, and Naukri has remained a major company. Many of them focused on portals and job listings because few Indians were online and payment cards were rare. When the global dot-com bubble burst in 2000, funding dried up and many closed.

The survivors learned that India's internet users, payments and logistics were not yet ready for the models that worked elsewhere. The period still seeded the first venture funds and some of the first entrepreneurs who would return in the next wave.

When did e-commerce and apps take off?

The next wave built up from around 2007 as internet access, cheaper smartphones and online payments spread. Flipkart was founded in 2007, Zomato (originally Foodiebay) in 2008, and Paytm, Ola and Snapdeal followed around 2010. Venture funds, including global ones such as Sequoia, Accel and Tiger Global, put in large sums, and India's first startups worth over a billion dollars, called unicorns, appeared.

Growth was funded by spending: discounts, cash-back and heavy advertising to win customers. This approach built large user bases but also showed how hard it is to make profits on thin margins, a lesson that came back in later years.

What changed in 2016?

Two events in 2016 reshaped the landscape. Reliance Jio launched a low-cost mobile data service that brought several hundred million Indians online. The same year the Unified Payments Interface (UPI), built by the National Payments Corporation of India, started letting people send money between bank accounts instantly using a phone. Together with the government's Startup India programme, announced in January 2016, they made it cheap to reach customers and cheap to collect their money.

Fintech, food delivery, ride hailing, edtech and software-as-a-service companies grew quickly on this base. The number of unicorns rose sharply in 2021, when cheap global money flowed into technology companies, and many Indian startups raised some of their largest rounds.

What did the 2022 downturn teach?

From 2022, rising interest rates abroad and falling technology share prices made investors more careful. Funding fell, valuations were cut, and many startups laid off staff. The focus moved from growth at any cost to unit economics, meaning whether each sale makes money, and to a path to profit.

At the same time, several Indian startups listed on the stock exchanges, including Zomato, Paytm, Nykaa and later others. Their mixed share price performance made investors and founders pay more attention to profit before going public.

What is the picture today?

As of October 2026, attention has moved towards artificial intelligence, climate and clean energy, defence and space technology, semiconductors and manufacturing, alongside continuing activity in fintech, software and quick commerce. The government has set up a large fund programme for research and deep-tech startups, and domestic investors, including funds, family offices and individual angels, now supply a growing share of the money.

Startups are also spreading beyond the big cities, with founders in smaller towns building for local needs in languages other than English. The pattern from earlier waves still holds: each new technology or policy change lowers a cost, and founders build on the new base.

Which names and firms stand out from each wave?

Each wave has names that are widely known. In services, Infosys, Wipro and TCS shaped the first generation. In the dot-com years, Naukri and Rediff were among the early consumer internet companies. In the e-commerce wave, Flipkart, Zomato, Paytm, Ola and Snapdeal became household names. In the 2016 wave, companies such as Swiggy, PhonePe, Razorpay and Zerodha drew attention, with very different outcomes for each.

The list matters less than the pattern. Every wave produced a few companies that grew very large, many that were absorbed or closed, and a group of people who learned enough to start again. Alumni of earlier companies founded or funded a large share of the next generation.

What role did policy play?

Policy opened doors at several points. The 1991 reforms removed many controls and let Indian software firms serve global clients. Telecom reforms and later the spread of cheap data brought users online. The Aadhaar identity system and UPI created public digital infrastructure that startups could build on without creating it themselves. Startup India added recognition, a Fund of Funds and some tax and compliance relief.

Policy has also created friction. Changes to foreign investment rules, taxes on investment gains and data-protection rules have all been debated by founders and investors. A fair reading is that India's public digital tools helped startups scale faster, while rule changes sometimes made planning harder.

What comes next?

No one can predict the next wave with confidence, and any page that does should be read with caution. What can be said is that cheaper computing, large language models and growing domestic capital are lowering the cost of building software, and that government programmes are backing research-heavy fields that used to find it hard to raise money.

For a reader, the useful habit is to look at what has become cheap or newly possible, and then ask which Indian problem it could solve. Past waves began that way.

Three lessons come back each time. First, cheap infrastructure matters more than clever ideas: Jio's data and UPI payments unlocked more startups than any single product. Second, money comes in waves, so a company that depends on a flood of cheap capital is exposed when it recedes. Third, the companies that last tend to solve a real problem for customers who will pay, not just one that attracts attention.

These lessons are worth keeping in mind when you read about a record funding round or a high valuation. They show a moment in a cycle, and the cycle has turned several times in India's short startup history.

The long view is also a reason to be careful with claims about the newest trend. Every wave looked unstoppable to the people inside it, and each one included companies that did not last.

If you want to place a new company in this history, ask which wave it belongs to, what cost it relies on having fallen, and who funded the founders' earlier work. The answers usually explain both its opportunity and its risks.

In short, the history shows a country that keeps rebuilding its startup base on top of whatever new tool has become cheap.

Read next

• How India's startup ecosystem works
• Unicorns, soonicorns and decacorns: what the labels mean
• India's startup hubs: Bengaluru, Delhi NCR, Mumbai and beyond
• What is a startup? The Indian definition and the real one
• Startups beyond the metros: the tier-2 and tier-3 story