Consumer tech drives innovation too: Founders push back on Goyal's remarks
In response to Union Minister Piyush's Goyal's comments on the startup ecosystem in India, startup founders and investors have also called for government support to accelerate deeptech innovation.
Consumer internet startups play a vital role in driving innovation and wealth creation, say startup founders, in response to Union Minister Piyush Goyal's criticism on the startup ecosystem in the country.
Many technology innovations have originated from consumer internet startups, according to Zepto Co-founder and CEO Aadit Palicha.
"Why doesn't India have its own large-scale foundational AI model? It's because we still haven't built great internet companies. Most technology-led innovation over the past 2 decades has originated from consumer internet companies," said Palicha, on LinkedIn, reacting to Union Minister Piyush Goyal's recent remarks.
At the second edition of the Startup Mahakumbh event, Goyal urged Indian startups to dream bigger, seek deeptech innovation, and not shy away from competition. The Minister of Commerce and Industry also advised Indian startups to think beyond quick commerce, food delivery, gaming and influencer economy.
"While wealth creation in the short run may happen with some of these conveniences, do we want to be just a shopkeeper, or do we want to create something at a global scale? This is the choice startups have," said Goyal.
The startup community has reacted strongly to the minister's remarks, emphasising the importance of consumer tech companies.
Consumer tech is important
"There is absolutely nothing wrong with investing in consumer tech, marketplaces, gaming or other industries. We cannot and must not apply a nationalistic moral lens to venture investing - people will and must invest where there are returns to be made," said Rajeev Mantri, Founder and Managing Partner at Navam Capital, in a post on X.
Mantri also noted that consumer tech companies have been instrumental in creating tens of thousands of jobs and generating returns worth thousands of crores for investors. He highlighted that many individuals who profited from the consumer tech sector are now actively investing in frontier technologies.
Palicha believes building strong local champions in the internet space—companies capable of generating hundreds of millions of dollars in free cash flow—is crucial to be a part of major technological revolutions.
"The startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, not pull down the teams that are trying hard to get there," he said.
In his speech at Startup Mahakumbh, Goyal referred to a slide that's become viral on social media, comparing Indian startups with Chinese startups, which are working on EVs, semiconductors, robotics, and deeptech.
Ashneer Grover, former Managing Director of BharatPe, said on X, that China too started with food delivery and then evolved to deeptech.
"It’s great to aspire for what they’ve done - maybe time for politicians to aspire for 10%+ economic growth rate for 20 years flat before chiding today’s job creators. Maybe time to change ‘public discourse’ from history to science!" he said.
Need for government support
Stakeholders in the startup ecosystem have also called for government support in accelerating deeptech innovation.
Mantri of Navam Capital urged the government to address "specific challenges and frictions" that deeptech entrepreneurship faces and not attack founders and investors.
TV Mohandas Pai, former Infosys board member and Co-founder of Aarin Capital, in a post on X, said, "We have a hostile Finance Minister Nirmala Sitharaman, who harassed startups on the angel tax for many years, (does) not allow endowments to invest. Insurance companies still do not invest, whereas they do globally. The RBI regularly harasses overseas investors on remittances and AIFs, treats them badly, (because of) FE rules."
Edited by Swetha Kannan