4 May 2020

Discovering Indian Venture Markets – for Nordic Startups / Scaleups

 

The venture market has always been one of the main sources of financing and backbone for startups/scaleups.  Most of the large tech-companies today all started with some type of seed investments from early stage investors.  For a Nordic startup/scaleup looking for pivoting Indian market entry, it is important to keep an eye on the large opportunities available in the ever-growing and transitioning venture industry of India.

 

India has become an important area for future growth in the venture business. Big global players, like Accel Partners, Sequoia Capital, Matrix Partners, Helion Capital and Samsung ventures etc. have been in India for a number of years already.  The country has been the “back office” for many western companies since the 90s/early 2000s, but with 1 million new engineers educated every year and the freedom of own thinking/world’s largest democracy, many have taken the next step by establishing their own companies. Initiatives like Startup India are serving as the cherry on the cake, driving more global investors and funds to the startup ecosystem.

 

The Indian venture market is the third largest globally behind USA and China, which have a more mature startup industry. But this also leads to larger opportunities, with less competition in different sectors.  There are close to 600 million internet users and more than 1000 incubators/accelerators.  According to Bain & Company, venture investors in India deployed 10 billion USD in 2019, up 55% from 2018. The main focus is on consumer tech, software/ SaaS, Fintech and B2B commerce and tech, which account for 80 % of the investments. The largest single sector was consumer tech which had a share of 35%. The startup ecosystem is growing fast with an annual rate of 17%, which have led to 80 000 startups at current stage.

 

The leading cities in the private equity/venture industry in India are Bangalore, Mumbai and Delhi mainly due to startup clusters and strong entrepreneurial ecosystem. Other cities like Pune, Hyderabad, Ahmadabad and Kolkata (Calcutta) have shown a significant growth too. It is important to notice that each city often is a specialist of a few industrial sectors, as for example Chennai is the “Car production” city of India.

 

One important factor for the Indian ecosystem of venture/startups is that it is evolving rapidly and market dynamics change of how things are functioning. A lot of the building of companies is India-specific and you need to apply a somewhat different playbook than in other countries like China and USA. Therefore, it is important to connect with the right players who can help you getting the best starting point for exploring the Indian venture market and catalyse your success.