From nascent stages of the startup industry, this year India showed a lot of maturities and the industry saw a lot of new trends and changes.
Silicon Valley, which has been the long-standing undisputed king of venture capital, now shares its kingdom with Asia
The China Market
In China, a new unicorn company is established every third day. Most of these companies are in the Internet space and claiming close to 50% of the global unicorn’s value. This has made China shine as a very regulated market.
Investors are in awe of the scale that these companies have reached and they are eager to learn more about the tactics of the game. Also, the investors are wishing and hoping that India too can get on the same path soon.
Reasons To Believe In India
These expectations of the investors are backed by a solid reason. When Walmart acquired 77% stakes in Flipkart for $16 billion and positioned it as India’s most valuable Internet startup at $21 billion, investors started eyeing India as a potential market.
Not just Flipkart, but many other IT ventures saw easy funding from the investors and today there is no dearth of late-stage capital for category leaders.
More capital is coming into tech style venture investments—upwards of $100 million. The era of supergiant rounds is now the new normal.
Although funding is still difficult for early stage and mid-stage ventures, the largest funds are being raised by the oldest and already well-established businesses.
“Globally, venture capital is outpacing private equity as investors look to take larger bets in disruptive technologies, which is also happening in India,” says a fund manager, requesting anonymity.
The Flipkart-Walmart deal served as an opening for many other ventures and finally gave India the confidence to dream bigger.
“We haven’t been able to do such deals doesn’t mean conversations have not happened,” said Suyi Kim, Asia head for CPPIB (Canadian Pension Plan Investment Board), which has $300 billion in assets under management. She mentioned that they are investors in companies like Alibaba and would like to do such deals in India, too. These are significant assertions.
Other Trends
The other trend that this funding and venture capital angle brought it was making the processes bigger than the people. In order to receive funds from global venture capitalists, Indian companies also had to follow the global standards of operations.
The hiring of key people with relevant and enriching experience came as the first step for many companies in order to ensure smooth flows.
Today India is close to two dozen unicorns and it needs a deep-rooted homegrown venture capital market to further strengthen its growth process.
The Future
India’s angel investor community of first-generation tech entrepreneurs, who cashed out with early startups, are making micro-bets on high-potential winners and can feed the rise of an “Indian Silicon Valley”. In a short span of 10 years, China’s tech economy has gone from “Made in China” to “Copied in China” to “Invented in China”. Indian startups should focus on this growing trend of ‘copied from China’ and use it to their best potential.
