India is home to the world's third-largest startup ecosystem, which is rapidly expanding. It is propelled by favourable tailwinds in digital adoption, domestic consumption, demographics, and the development of technological platforms for general consumption as well as niche use-cases.

The growth story of technology-enabled India is well-known around the world, riding high on the shoulders of the IT industry and the Indian hunger for technology adoption. As a result, $35-36 billion will enter the system in 2021 alone, accelerating trends that have been in motion over the past decade and accelerated further by the pandemic.

India is expected to complete the technological loop in 2021. The policy and technology startup ecosystems came together to create exceptional value. SEBI, India's capital markets regulator, pushed for far-sighted regulatory reforms that allowed the general people, especially consumers, to participate in and sustain India's growth story.

Many startups and firms, including as Nykaa, PolicyBazaar, and Zomato, have gone public with significant retail investment. So far this year, at least 42 Indian start-ups have become unicorns. In the future years, many of these unicorns will continue to list successfully.

In addition, the year 2021 marked the end of a successful decade-long technological democratisation effort. It is a movement that every Indian should value and look forward to as the next decade unfolds.

This trajectory will be accelerated in 2022. The following are some of the emerging trends:

Everything is metaverse - Ever since Facebook changed its name to Meta to cement the inevitable draw towards the metaverse, there has been a tremendous amount of speculation about what this signifies. The combination of Web 3.0 and Metaverse opens up the possibility of physical reality and virtual reality (VR) effortlessly mixing. People will step into a world where they will manage their lives and work in this combined reality. In addition, the year 2021 marked the end of a successful decade-long technological democratisation effort. It is a movement that every Indian should value and look forward to as the next decade unfolds.

Non-fungible Tokens (NFTs) have been the most significant development in cryptocurrency and blockchain this year, making an already hot market even hotter. Even though the notion of utilising cryptocurrency instead of money is still a long way off, blockchain (BC) technologies have risen to prominence as a result of the widespread distribution of crypto tokens, which has aided the issuance and growth of NFTs. NFTs have become a popular and investable asset class. Many countries are changing their rules to allow investors to invest in NFTs and tax the gains of those who have already done so. Many startups are developing product, business, and service models based on this breakthrough, as well as incorporating BC technologies into banking, business, and other mainstream domains.

Vertical e-commerce (VEC) — VEC platforms are specialised digital platforms for product groups, where individuals can simply access and explore for things of their choice, all at competitive costs. VECs take use of their product depth and extreme expertise to provide interesting services to their ever-increasing customer bases. The discussion and involvement into the VEC field has intensified even faster since Nykaa's spectacular IPO. Younger VECs such as Licious and Mamaearth (disclaimer: Pai is an investor in 3one4 capital, which is an investor in Licious) are expanding quicker and attracting larger pools of cash. VECs and intriguing new vertical offerings will be more popular in 2022.

Financialisation of the internet - As online products and services become more ubiquitous and ingrained in daily life, financial services will become more integrated into each app you use. Fintech will become a natural element of every digital process in everyday life, from BNPL (buy now pay later) and micro-savings to the creative economy and gaming payments. This trend follows naturally from internet platforms becoming the go-to experience for millions, particularly in the aftermath of the pandemic. Embedded fintech will bring banks and internet companies together to compete for your attention, deposits, and payment flows.

Consolidation in technology-driven industries – Consolidation is a natural occurrence as large corporations raise funds and acquire competitors, leaving numerous smaller businesses in the dust. This was seen in a number of areas in 2021, including edtech and health tech. This is unavoidable when IPOs become more accessible to many significant participants. With financial infusion, there is also room for rapid company growth, continuing disruption of the sector, and winners expanding market share in fintech. Every vertical's standout players will use every opportunity to consolidate services and offer new features to their customer base.

We anticipate that the boom of technology-enabled growth will continue in 2022. Although the prospect of interest rate hikes in the United States may dampen attitudes, the momentum of technology-driven innovation remains strong.