Jobs, Not Just Unicorns: How Startups Created Over 21.9 Lakh Direct Jobs

For years, India’s startup story has been dominated by one metric: unicorns.

Valuations, funding rounds, IPO pipelines, and billionaire founders have shaped public perception of what startup success looks like. But beneath the headlines—and often ignored in mainstream discourse—is a quieter, far more consequential impact.

Jobs. At scale. Across India.

According to the latest National Startup and States’ Startup Ecosystem Ranking report, India’s startup ecosystem has generated over 21.9 lakh direct jobs, marking one of the most significant employment contributions by a single economic segment in the past decade.

This is not incidental. It is the outcome of a deliberate shift in policy, ecosystem design, and entrepreneurial behaviour—one that is redefining how India creates work in a rapidly changing economy.

From Valuation Obsession to Employment Impact

When Startup India was launched in 2016, the focus was clear: enable entrepreneurship, reduce friction, and encourage innovation. At the time, India had just around 500 DPIIT-recognised startups.

Fast forward to 2025, and India now has over 2.07 lakh recognised startups, spread across 770+ districts. As the ecosystem expanded geographically and sectorally, job creation followed—steadily, and then exponentially.

The report shows that direct employment created by startups grew from around 4.9 lakh jobs in 2020 to 21.9 lakh jobs by 2025, reflecting a 168% compound annual growth rate in startup-led job creation over the period.

This growth underscores a crucial reality: startups are no longer fringe job creators. They are becoming mainstream employment engines.

What Makes Startup Jobs Different

Startup-generated employment differs from traditional corporate or public-sector jobs in three key ways:

1. Faster Job Creation Cycles

Startups typically scale teams rapidly once product-market fit is achieved. Even early-stage companies often hire across engineering, sales, operations, customer support, and field roles.

2. Distributed Hiring

Unlike legacy firms concentrated in metros, startups increasingly hire from Tier-2 and Tier-3 cities. This has allowed job creation to extend beyond urban centres into smaller towns and districts.

3. Skills Over Credentials

Startups often prioritise skills, adaptability, and problem-solving over formal pedigree—creating opportunities for young, first-generation professionals.

The report estimates that on average, each startup creates around 11 direct jobs, a figure that compounds quickly when scaled across more than two lakh startups nationwide.

The Geography of Job Creation: Beyond the Metros

One of the most important insights from the report is the decentralisation of employment.

Startups now operate across 770+ districts, reinforcing the idea that job creation is no longer restricted to Bengaluru, Delhi-NCR, Mumbai, or Hyderabad. States like Maharashtra, Karnataka, Gujarat, Uttar Pradesh, Tamil Nadu, and Telangana lead in absolute job numbers, but Tier-2 and Tier-3 cities account for a rapidly growing share.

The report highlights that:

• Over 53% of startups originate from Tier-2 and Tier-3 cities

• These startups are increasingly active in sectors such as healthcare, education, logistics, waste management, agritech, and biotechnology

• Many of these sectors are inherently labour-intensive, especially at the early and growth stages

This decentralised job creation has significant implications for regional development, migration patterns, and local economies.

Sectoral Engines of Employment

While IT services continue to lead in the number of startups and jobs created, the report shows that employment is becoming more diversified across sectors.

Top job-creating sectors include:

• IT Services – still the largest contributor, driven by SaaS, enterprise software, and digital services

• Healthcare & Life Sciences – including healthtech platforms, diagnostics, medical devices, and telemedicine

• Food & Beverage – spanning processing, logistics, D2C brands, and agritech linkages

• Professional & Commercial Services

• Education & Skill Development

Notably, emerging sectors like biotechnology, waste management, logistics, and climate tech—many of which are concentrated in Tier-2 and Tier-3 cities—are showing strong employment multipliers.

The report also notes a sharp rise in patent-linked startups (5,400+ patented startups and 68,000+ patents filed in 2024–25), indicating that job creation is increasingly tied to knowledge-intensive and innovation-led enterprises.

Women-Led Startups: A Silent Employment Multiplier

Another defining feature of startup-driven job creation is women’s participation.

As per the report:

• Over 99,000 startups have at least one woman director

• Women-led and women-participative startups have created over 12.4 lakh direct jobs

• Nearly 50% of women-led startups are based in Tier-2 and Tier-3 cities

This shift reflects how inclusive entrepreneurship is translating directly into inclusive employment—especially in regions where traditional job opportunities for women have historically been limited.

Government initiatives such as Stand-Up India, MUDRA, and targeted startup support programmes have played a catalytic role in enabling this trend.

Policy as a Job Creation Catalyst

Unlike earlier startup waves that relied heavily on private capital alone, India’s current ecosystem is deeply intertwined with public policy.

The report attributes job growth to:

• Simplified compliance and self-certification

• Tax incentives and angel tax exemptions

• Public procurement access via GeM Startup Runway

• Seed funding and credit guarantees

• Incubation and mentorship infrastructure

As of mid-2025, over 34,000 startups are onboarded on GeM, collectively executing orders worth ₹47,000+ crore. This direct market access has allowed startups to grow revenue—and headcount—without relying solely on venture funding.

In effect, policy has shifted from being a regulator to becoming a job creation enabler.

Why This Matters More Than Unicorn Counts

Unicorns are important. They signal scale, ambition, and global competitiveness.

But unicorns are few. Jobs are many.

The creation of 21.9 lakh direct startup jobs signals something deeper: startups are now embedded in India’s economic fabric. They are absorbing young talent, formalising work, and generating livelihoods at a pace that traditional sectors are struggling to match.

Equally important is the quality of these jobs—often digital, future-facing, and linked to skills that will remain relevant in a technology-driven economy.

The Road Ahead: From Direct to Indirect Impact

The report focuses on direct employment, but the real impact goes further.

Every startup job creates downstream demand—for vendors, service providers, logistics partners, trainers, and local businesses. The indirect employment effect is likely several times higher, especially in manufacturing, logistics, and services-led startups.

As India enters the next decade of Startup India, the key question may no longer be how many unicorns are created, but:

How many livelihoods are sustained, scaled, and future-proofed?

On that front, the data is clear.
India’s startups are not just building companies.
They are building jobs—at scale.