Comparisons between India and China, connections between India and Southeast Asia, and bridges between India and Silicon Valley were some angles with which international media covered India’s startup scene this year. Big deals, social enterprise and investment dynamics were some other key themes.
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In this 2014 roundup, we look at how India’s entrepreneur ecosystem was featured in over 15 international media of three types: mainstream heavy-hitters, online portals and NRI media. They are spread across all categories of traditional and digital media: AFP, Bloomberg, CNBC, CNN Money, e27, Financial Times, Forbes, Huffington Post, India West, MarketWatch, Mashable, NBC, TechCrunch, Wall Street Journal and ZDNet.
The big deals
In an e27 article, Michael de Waal-Montgomery documented how over US $5 billion were poured into Indian startups in 2014 led by e-commerce players such as Snapdeal and Flipkart. Flipkart is “the most well-funded Indian startup in history,” he observes, while also covering other startups in sectors such as taxi service (Olacabs), classifieds (Quikr) and restaurant guide (Zomato).
“India’s time is here. Today’s new tech role models are the founders of Flipkart, InMobi, Snapdeal, Mu Sigma – and many others,” according to Sanjay Nath, Co-founder and Managing Partner, Blume Ventures. The e27 article also speculates whether India could overtake China in venture investments, thanks to large commitments by Japan’s Softbank with its US$10 billion plan for India. Flipkart’s raising of $1 billion in funding was also covered by NBC.
“India’s startups are pulling in Silicon Valley’s big hitters,” writes James Crabtree in the ‘Financial Times’, covering venture investors - as well as Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg and Microsoft’s Satya Nadella during their India trips, a reflection of “the sense of enthusiasm enveloping India’s startup scene.” Infosys, Wipro and the Tata group have started dabbling in startups. “There is definitely a new energy in the air,” according to Nandan Nilekani, Co-founder of Infosys.
Crabtree also cites Mohanjit Jolly, a partner at DFJ Ventures, who describes India’s “Alibaba syndrome” – the expectation that its internet groups will match Alibaba, Ten Cent or Baidu, despite challenges on the IPO front.
India On The Verge Of A Tech 'Gold Rush', describes Alexander C. Kaufman in the ‘Huffington Post,’ citing Indian-American academic Vivek Wadhwa, and comparing the ‘Bay of Bengal’ hub to the Bay Area hub around San Francisco. India is now home to the four cities with the most tech workers on LinkedIn, he says, citing a recent report; the cities are Bangalore, Pune, Hyderabad and Chennai (the Bay Area ranks fifth!).
Amazon CEO Jeff Bezos even graced the cover of GQ India, “a space usually reserved for Bollywood stars,” Kaufman jokes. He cites an Ernst & Young report on India’s $1.8 billion in venture funding in 2013, three times more than in 2006; he also cites YourStory as a source of venture investment data. India’s e-commerce market generates about $2 billion in sales a year, much smaller than China’s annual Internet sales of about $300 billion, or the $260 billion spent in the U.S., adds Kaufman.
Comparison with China
“What will be the next Alibaba?” asks a CNN Money report, citing PrivCo data that venture capital funding to Indian startups is up 261% from 2013, totaling $3.86 billion to date. “If you look at India's growth and demographic, you can see that the next hot tech market after China is India," says PrivCo senior analyst Matt Turlip, in an interview in the report; he regards Flipkart as “one of the best-funded startups in the world -- not just in India."
“500 million people will be coming online over the next three to four years on inexpensive smartphones. This will create an Internet revolution that will make our dot-com boom seem lame" according to Vivek Wadhwa, interviewed in the CNN report.
The global expansion of Chinese tech firms, including into countries such as India, also gets lots of press. This extends to coverage of smartphone players Xiaomi (by MarketWatch) and OnePlus (see International Business Times article), which are also striking exclusive deals with Indian e-commerce sites and taking on Indian players such as MicroMax, Karbonn and Lava, and Korea’s Samsung.
“More proof of India’s rise as one of the Silicon Valleys of the world can certainly be seen in the latest mega venture financing of leading Indian e-commerce startup Flipkart,” writes Rebecca Fanin in a Forbes article. Fannin is author of ‘Startup Asia: Top Strategies for Cashing in on Asia’s Innovation Boom’ (see my book review). “I’ve been writing that this Silicon Tiger nation would catch up to China’s Silicon Dragon, and the evidence keeps piling up,” Fannin says.
View from Southeast Asia
Southeast Asia has huge markets in Indonesia, Thailand, Malaysia, Philippines and Vietnam, but Singapore is regarded as the ‘Wall Street’ of the region as finance hub and investor base. A number of Indian startups are expanding or registering in Singapore, and Singapore-based investors are eyeing Indian sectors ranging from airlines to apps.
Check out e27’s pieces, What’s beckoning Indian startups to Singapore? and Why India shouldn’t worry about startups leaving for Singapore in this regard. For example, Mobikon and AdNear moved their headquarters from India to Singapore. One reason: India ranks 179th in a World Bank list on ease of doing businesses – Singapore ranks third. Another e27 article covers how Delhi-headquartered mobile commerce platform Paytm plans to expand to Singapore and other Southeast Asian markets in sectors such as utility bill payments, transportation and parking.
On the investment front, Bangalore-based décor marketplace Livspace received US$4.6 million in Series A funding, in a round led by Helion Venture Partners and Bessemer Venture Partners and with participation from Singapore-based Jungle Ventures. “Jungle has always been a strong supporter of startups from Asia that are building disruptive global models and we see Livspace as first of many full stack e-commerce companies that will start here and go global,” said Amit Anand, Co-Founder and MD of Jungle Ventures, in an e27 report.
Cross-border acquisitions are well covered in international media, such as the TechCrunch report on News Corp’s first big acquisition in India, Mumbai-based financial planning service BigDecisions.com. Its earlier investments were in real estate service PropTiger. “Our latest investment builds on our abiding belief that a digital India needs more trusted, reliable and independent data,” according to Robert Thomson, CEO, cited in the article.
Sequoia Capital’s investment of $8 million in car rental startup Zoomcar was covered in a Wall Street Journal blogpost, which also featured SoftBank’s investment in Ola Cabs. The third quarter of 2014 was a healthy one for Indian startups, according to a Forbes article by David S. Rose. India’s tech sector experienced a “whopping 342% increase” in Q3 over Q2 in the number of startups applying for funding. Globally, Q3 saw a 52% increase in share for funding applications from software startups, placing it in the Top Five most active industries.
“The startup tsunami continues to spread rapidly across the globe. The intense acceleration we saw in India this quarter will likely continue,” observes Rose, who has also authored the book ‘Angel Investing’ (see my book review).
Venture capital and private equity investments in India’s startups could double in 2014, according to an International Business Times report. “This whole ecosystem in India has reached an inflection point. We see the possibility of hypergrowth,” according to R. Chandrashekhar, Nasscom’s President, cited in the article. India’s 3,100 startups rank only behind the US and UK in total number. “Imagine if you had Singapore-like infrastructure here. Then magic will happen,” adds Ravi Gururaj, Chairman of Nasscom’s Product Council.
Digging beneath the major deals, some international media also unearthed newer players and emerging trends in India. A Mashable article picks 10 startups to watch in India’s tech boom: Flipkart (e-commerce), Hike (messaging), Exotel (cloud telephony), WebEngage (CRM), Druva (security), Cucumbertown (social network for cooks), Zoomcar (car rentals), Reel (video messaging), Zomato (restaurant reviews) and Urban Ladder (for home builders).
e27 linked to videos of women entrepreneurs in India, such as Anu Sridharan from NextDrop (water supply management), Aishwarya Raman from Auto Raja (dial-an-autorickshaw service) and Devi Murthy from Kamal Kisan (mechanisation solutions for farmers).
In addition to the e-commerce heavyweights, international media have covered music players, such as the TechCrunch article on Saavn, featuring its online music service (similar to Spotify) and rivals such as Gaana.com (from Times Internet) and Rdio (which acquired Dhingana).
“Car-sharing startups hit the road in India,” writes Siddharth Philip in ‘Business Week’ magazine, describing how Zoomcar, Carzonrent and MiCar provide the benefits of driving “the latest models without having to pay monthly installments, insurance, or maintenance.”
CNBC covered Indian startups in wearables space, such as fitness band Goqii. The Next Web covered India’s budget allocation for Rs 100 billion ($1.6 billion) to support startups. It also noted that startup space TechHub from London is expanding to India.
MNCs are targeting India’s startup pool for investments, ideas and customers. A Bloomberg article covered Microsoft’s launch of the JumpStart hotline in India to help entrepreneurs start their own business.
Another good story for international media in 2014 was the use of social media in India’s elections (‘New York Times’: Narendra Modi - the Social Media Politician) and the rise of big data startups such as Voxta, Frrole and Simplify360 (TechCrunch: Political Siri). At the same time, there are sobering articles on what regulatory challenges are raised by Uber, whether there is a “startup bubble” in India and what the outlook is for accelerators.
India’s huge challenges and obstacles are the focus of a number of international media reports on social entrepreneurs as well. For example, a Forbes story covers Totus Power, a startup working on car battery solutions to provide power to Indian schools; it is raising funds via Indiegogo.
Another Forbes article by Anne Field addresses Indian impact startups serving the ‘bottom of the pyramid,’ via investors such as Unitus Seed Fund. Its portfolio includes Smile Merchants (low cost dental clinics) and Milaap (crowdsourcing microloan funds).
An extensive ZD Net article addressed the shortcomings of holistic and practical skills in the Indian education system, and the opportunity for startups such as Everest Edusys (trying to wean children away from rote learning to learning by doing) and Skyfi Labs (practical training for engineers).
Newswire reports from India Abroad News Service (IANS) are also picked up by NRI newspapers around the world. Vancouver Desi carried a report on Madhya Pradesh wanting to set up a startup village on the lines of Kerala. The US-based newspaper ‘India West’ published an article on Sanjay Uppal and Ajit Mayya, IIT Mumbai classmates and hostel-mates who co-founded VeloCloud, a cloud network product.
It is not just the Western and NRI media that are covering India’s startup boom; reports have also appeared in other regional publications such as the ‘Daily Star’ of Lebanon. It published an AFP article on Indian startup Ducere which makes ‘smart shoes’ for physically challenged children.
The road ahead
Mohanjit Jolly, partner at Draper Fisher Jurvetson, wrote in a Wall Street Journal blogpost that India’s startups are thinking global. “The idea generation and curation machine is starting to take hold,” he notes, and the rise of companies like Flipkart “is having a tremendous impact on the overall psyche of the Indian tech entrepreneur” along with acquisitions of Indian startups by giants such as Facebook. India is a “hotbed of activity” and will catch up with Silicon Valley in “years not decades.”
‘Silicon Valley Looks for Billion Dollar Ideas in India,’ wrote Shefali Anand for the 'Wall Street Journal,' covering the initiative by TiE (The Indus Entrepreneurs) to bring potentially billion-dollar startups from India to Silicon Valley for networking and mentoring. The first batch of companies includes Sokrati, Vinculum and Seclore.
See also YourStory’s roundup of its own 2014 startup highlights: 25 most read stories of women entrepreneurs, 50 quotes from women entrepreneurs, startup workplace employee stories, crowdfunding trends, Top 10 videos, favourite techies and even startup controversies.
To put it all in perspective, a Bloomberg piece written earlier in 2014 echoed Indian startups wishes that “2014 would bring more IPOs” as compared to 2013 (“the worst year for Indian technology IPOs since 2001).” That wish could easily be repeated for 2015! Angel investor Hemant Kanakia observes that there is a “quantum jump” in the quality of new startups in India, and the “reverse brain-drain” of young Indian professionals from overseas is a sign for the good.
The clustered and thematic analysis above opens the door to more structured and quantitative analysis in the coming year. In sum, the rise of Indian startups is making a splash in national as well as global media, a trend that will continue for years to come. As CNN Money notes, by 2050, India is expected to be the most populated country with the largest economy in the world, according to a Pew Global report. Half of India’s population of 1.25 billion is under the age of 25 - and by 2020, India could become the world's ‘youngest’ country with an average age of 29.
Thus, in additional to coverage of the entrepreneurship boom in India through English and European languages, the next promising frontier is coverage of India’s startup story in Indian languages. Now that’s another story altogether!
- Wall Street Journal
- Ernst & Young
- Huffington Post
- Financial Times