Mohandas Pai on the massive market opportunity of Digital India
“With internet rates as low as $1.5 a month, India is rich and abundant in data coverage for its internet users. Average data consumption for the Jio Network is 14 GB per person per month and for Airtel, it’s 17 GB per person per month,” says T. V. Mohandas Pai on today’s data consumption patterns in India.
He is the Chairman of Manipal Global Education, the co-founder of, and was the CFO and a board member at Infosys — Mohandas Pai wears many hats.
He has helped start over 10 different funds in venture, growth, and public markets. He also leads private equity fund Aarin Capital, along with Manipal Group Chairman Ranjan Pai. It invests in life sciences and education companies.
In this episode of Prime Venture Partners Podcasts, a series featuring the makers and doers of the startup ecosystem, Mohandas Pai discusses the massive opportunity and market potential in the digital Indian space with Sanjay Swamy, Managing Partner, Prime Venture Partners.
India’s digital ecosystem
Mohandas Pai starts off his conversations with some insightful data about the digital ecosystem in India. He says, “India is a country with a $2,000 per head per capita income, $3 trillion of GDP. With 1.2 billion digital connections and 900 million unique smartphone users, India is now more connected than ever.”
While India has one of the cheapest data rates available, it also has a global standard and the largest software service industry. Last year, India exported software services worth $150 billion, employing 4.5 million talent resources in this industry alone.
The country has 40 startups valued at more than $1 billion (unicorn status). It is estimated that India will have 100 unicorn startups by 2025.
“So, in this country, where any can raise an investment for a startup, which can do business in the US and Europe. So, I think this is going to be the hottest place for startups in technology for the next five years, where investment is welcome and people make a lot of money,” says Mohandas Pai.
The ‘different’ opportunity
Seeing India as a different yet large opportunity, he delves into the statistics of various sectors.
Amongst all the sectors in India, edtech is currently the hot favourite with 265 million students in school and 37.5 million students in college. While many schools and colleges are now going digital with a vengeance, Mohandas says the B2B market is a lot tougher to crack than the B2C market at the moment as the latter is seeing more and more action.
However, the healthtech had its boom in the market for a brief while, yet it shows some level of decline in growth. In fact, telemedicine was one go-to-market strategy that has proven to be efficient for healthtech, especially after the relaxation. Mohandas Pai says that it’s easier for all doctors and hospitals these days to use telemedicine for consultations and subsequent healthcare.
“Moreover, the Aarogya Setu hit 50 million downloads in just 13 days, faster than Pokemon Go taking 19 days to hit the same number,” he adds.
Fintech also saw great traction with a total of 1.6 billion transactions being made in under 30 seconds each and without any extra fees, which shows the system efficiency of UPI.
“I think fintech is another area which is taking off, in lending, getting the data out to find out who can borrow money in the SME lending, and in the stock market trading in using artificial intelligence to do back testing for the derivatives market, and also in bond trading in all facets of fixed income equities,” says Mohandas Pai.
“These transactions do not pass through a wallet but through the banking system directly. With players like, , and the likes, the payments business has certainly taken off in India. Lending, stock market trading, SME lending, and bond trading are just some of the many untapped segments in fintech that come with large market potential,” he adds.
Startups can work with the government
India’s numerous cultures, demographics, languages, and diversity come with a different layer of market access and opportunities. And Mohandas Pai believes that startups have a great opportunity to work with the government.
While there might be some challenges with this, Mohandas Pai suggests that the bigger picture is the existing infrastructure and the opportunities the government has in place and Aadhaar going digital and the subsequent UPI adoption.
An Indian app company might have to pay 25-30 percent fee to players like Google for Play Store and Apple for App Store. With public utility platforms, supported by the government, there is no cost whatsoever.
The lesson for startups
Irrespective of the sector, Mohandas Pai says that what we need is in all these areas is business processes, business model innovations, whether it is healthcare, education, fintech, mobility, ecommerce, or consumer internet
“Startups should really focus on in innovating upon the business models and the processes. With business model innovation, the monthly costs go lower dramatically, which significantly increases the volumes of the overall business. With interest rates going low and capital being easily accessible, this is one aspect startups should actively try to look at,” he says, signing off.
You can listen to the podcast here.
(Disclaimer: Mohandas Pai-backed 3one4 Capital is an investor in YourStory)