Key Points

As India's startup ecosystem accelerates into its next growth phase, emerging businesses are reshaping their growth through digital innovation with AI, omnichannel strategies, creators, and access to tier 2 and 3 markets and equally to cross-border geographies, said the report by Meta in collaboration with leading global professional services firm Alvarez & Marsal India.

The findings showed that India's startup ecosystem has witnessed exponential growth over the last decade, with a surge in early-stage funding, digital penetration, and consumer affluence across metros and non-metro regions.

"In today's dynamic times, startups that think smart and act fast to evolve will lead the charge. At Meta, we're proud to be partners in this journey, equipping them with cutting-edge AI-powered tools to help them scale and turn their bold ideas into impact," said Sandhya Devanathan, Vice President, India and South East Asia, Meta.

Technologies such as AI are further fueling the growth of startups and MSMEs in the country.

"We're seeing a significant shift in how Indian startups think about scale--not just for pursuing growth but building more sustainable businesses that focus on value creation," said Himanshu Bajaj, Managing Director and Head - Alvarez & Marsal India and GCC.

AI is becoming a game-changer for marketers. In marketing alone, 87 per cent of AI adopters reported a 30 per cent improvement in cost per acquisition (CPA).

Sectors such as healthcare, edtech and beauty are leading in AI maturity leveraging automation for customer service, predictive analytics, and personalisation, the report found.

Tier 2 and 3 markets are becoming the new battlegrounds for scale. Nearly all surveyed startups are expanding into these regions, driven by demand, digital accessibility, and distribution ease. Service-based startups are entering these markets nearly a year earlier than product counterparts, using WhatsApp, vernacular content, and regional influencers to break through.

Going global is no longer reserved for mature players. The study shows 52 per cent of startups are expanding cross-border, largely driven by larger total addressable markets (TAM) and increasing global appetite for Indian-origin offerings. The US, the UAE and the UK emerged as the top export markets, said the report.

- IANS