If we were to go back in time a decade, we would see a startup ecosystem that had just started catching fire with the founding of the likes of Flipkart (started in 2007), InMobi (2007) and more. The overwhelming success of a handful of startups eventually instilled a sense of entrepreneurship among the youth.
While, on the one hand, the ecosystem has witnessed scalability backed by investors pouring money into ventures and validating their business models, on the other, negative waves like acquisitions, layoffs and shutdowns have often affected the positivism of the startup revolution. Peppertap, Amber Wellness, Tooler, Purple Squirrel and Fashionara have all shut shop this year, and that’s just to name a few.
The year 2016 has seen a 40 percent decline in funding compared to last year. Indian startups raised $2.1 billion in H1 2016, whereas the number was $3.5 billion for the same period last year. The shutdowns and exits have been attributed to the lack of funds and steep competition.
Well, fickleness is indeed a part of the startup ecosystem, but that does not mark the end of the revolution. The show must, and will, go on. Though the deal value and ticket size of funding has decreased, the number of deals has increased by 27 percent. According to YourStory Research, between January and September last year, $7.3 billion was invested across 639 deals. This year $3.5 billion was invested across over 815 deals between Q1-Q3 2016.
Ravi Narayan, Global Director, Microsoft Accelerator, said,
The Indian startup ecosystem has shown tremendous shift over the last few years. The turnaround point was the remarkable growth of enterprise startups. It has been heartening to see the growth that has followed since, and how the ideas behind innovation and disruption have given rise to a great mix of businesses - with technology being at their core.
A few companies like Flipkart, Ola, Paytm, InMobi, Bigbasket and Zomato have traversed quite a lot of ground, moving towards scalability, and have become the representatives of their respective sectors. Following in their footsteps is a collection of startups, each on the brink of becoming a recognizable, solid brand.
To give you an idea of all the rising stars and potential flag-bearers of the ecosystem, YourStory conducted a survey, gathering the views of investors and different industry experts. Here is a list of the names of emerging startups that kept coming up:
Founded in 2010, Lenskart is an online retailer of eyewear, offering over 10,000 different styles to address diverse consumer needs and tastes. The company claims to have grown by more than 200 percent year-on-year in the last two years. It is present in over 100 stores across more than 65 cities in India, and, in May this year, raised Rs 400 crore in a round led by International Finance Corp.
Karan Mohla, Executive Director, IDG Ventures, said, “Lenskart is the largest branded retailer of quality and affordable eyewear products in the country.” Founder and CEO of YourNest Sunil K Goyal also considered Lenskart as one of the top emerging startup brands.
Founded in 2013, Voonik is claimed to be the leader in the unbranded fashion category, with an annual GMV rate of over $100 million. It has over 12 million registered users, 10 million app downloads, and 15 lakh products from more than 20,000 sellers. In June this year, the venture had raised $20 million in Series B funding.
According to Ravi, Voonik is one of the popular and emerging names in the consumer segment. Co-founder of InnerChef and Founder of GSF Accelerator Rajesh Sawhney said that Voonik offers a different experience in fashion commerce.
Founded in 2013, Inshorts is claimed to be the highest rated news app, with more than 3 million downloads on Android and iOS. Formerly called News in Shorts, the company rebranded itself as “Inshorts" and last year, raised $20 million in a Series B round.
Apoorv Ranjan Sharma, Co-Founder and President, Venture Catalysts, said, “InShorts changed the way content is offered and is a habit forming app. It is very informative and time-saving as well (news in 60 words).” Rajesh has also lauded InShorts for its traction.
Started as HealthKartPlus in 2013, 1mg now aims to be the one health app for all consumers in India. It claims to have grown by 600 percent over the last year in terms of app downloads and user engagement. In July last year, the company entered the alternate medicine space with the acquisition of Homeobuy, a web platform for homeopathy medicines. This year, it raised Rs 100 crore in a Series B round. According to Rajesh, 1mg is the market leader in the medicine delivery space.
Sunil has named 1mg in his list of top 10 emerging startups, alongside names like BYJU’s, Mycity4kids, Traxcn, Quikr, UrbanClap, Droom, Chayoos, and Hike.
FirstCry.com was founded in 2010 by serial entrepreneur Supam Maheshwari, who previously built and successfully sold Brainvisa Technologies. The company claims to have over 180 FirstCry branded franchisee stores across more than 100 cities in the country, with a customer base of more than 3 million parents. The startup recently bought Mahindra Retail’s BabyOye, and has raised $34 million in fresh equity capital from the Mahindra Group, private equity fund Adveq and Kris Gopalakrishnan.
Karan says, “FirstCry is the largest baby and maternity products retailer in the country, with a significant presence online and close to 200 stores across the country.”
Founded in 2013, Zoomcar is a self-drive car rental company that allows users to rent cars by the hour, day, week or month. The service is currently spread across 12 cities, with a fleet of over 2,000 cars. The catalogue offers a wide variety of cars, including information on the cost of fuel, insurance and taxes. Recently, the venture raised $24million in a Series B round of funding.
Zoomcar occupied a place in Ravi Narayan’s list of popular and emerging names in the consumer segment.
Freshdesk is one of the leading providers of cloud-based customer engagement software. It allows organisations to support customers through email, phone, websites, forums and social media. Backed by Tiger Global Management, Accel Partners and Google Capital, Freshdesk’s products are tailor-made for all sizes of companies, from SMB to enterprise. The company claims to have over 80,000 customers across the world.
Rajesh considers Freshdesk to be one of the companies in the SaaS space that has great products and better scalability. His list encompasses names like Swiggy, Razorpay, Dailyrounds, Hotstar, ClearTax and Tolexo.
Crownit is an O2O platform that connects consumers with local merchants. Founded in 2014, Crownit is spread across four cities, including Delhi, Mumbai and Bengaluru. The platform has over eight lakh users and over 15,000 merchants listed so far. The company aims to have 20 million users, driving $1.2 billion of annual GMV across 25 cities in India, by 2018.
Apoorv said, “Crownit has impressive consumer engagement, reviews, downloads and a unique business model, and it is spread across categories.”
Apart from Crownit, Apoorva listed other startups, citing reasons for why he considers them to be emerging brands. His list includes names like Beardo (because of brand positioning, quality of products and the capture of the emerging Indian men's grooming industry), Nykaa (created disruption in women’s cosmetic segment, balancing offline-online demand), Dailyhunt (captured largest regional language speaking audience at the right time and diversified into e-books, magazines), Haptik (habit-forming app solving day to day consumer problems), Byju (personalised learning experience and strong founder) and TeaBox (global reach and strong distribution and supply chain).
Owned by Girnar Software, CarDekho.com is an auto portal catering to buyers, owners and auto enthusiasts across the country. Girnar Software also acquired several other participants in the space like Gaadi.com, Zigwheels.com, Buying IQ and Drishya360s. The auto portal totally draws close to 33 million visits, with 22 million unique visitors, per month. The company counts Google Capital, Sequoia Capital, Hillhouse Capital, Tybourne, HDFC Bank, Times of India Group and Ratan Tata as shareholders.
Harshad Lahoti, Founder of Ah! Ventures, said, “Very few have built brands in the car space. Hailing from a city like Jaipur, CarDekho has built a brand by organising the car trading space.” Harshad also named AppsDaily and Exotel as emerging brands.
A Microsoft Accelerator-incubated startup, HealthifyMe was founded in 2012. HealthifyMe’s free app enables users to keep a track of their calories, set personal fitness goals and measure progress. With 150 employees, including 100 coaches, the company is currently present in Bengaluru, Delhi, Mumbai and Chennai. In May this year, it had raised $6 million in Series A funding.
HealthifyMe is one of the emerging brands in Ravi Narayan’s list. His list of popular and emerging names in the consumer segment includes companies like NowFloats, BabyChakra and Explara. Ravi emphasised that startups in financial technology, SaaS, IoT and healthcare are also fast establishing their presence in the ecosystem. These businesses may not be common names, but they are enabling consumer-centric startups to create great businesses.
“Companies such as Reverie, iBot Inc., Altizon, AdPushup, Yellow Messenger, LogiNext and Tarnea Technology Solutions are some of the great B2B businesses being identified as emerging startup brands in India as well,” added Ravi.
According to Sunil, a great brand is built by its unique offerings, its ability to connect with its target audience, sustainability and brand recall in the minds of consumers. While companies like Flipkart, Ola and Paytm have already established themselves as household brands, many others have the potential to become as big as them in the future.