India’s year of the unicorn: Startups in spotlight of 2021 tech boom

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MUMBAI: Sumit Gupta has had a giant year – turning 30, getting married and seeing his startup turn out to be one of India’s latest tech unicorns.

Hampered by the coronavirus pandemic and too busy increasing and getting funding for his cryptocurrency platform CoinDCX, his crew lastly grabbed just a few days on the seaside in Goa to have a good time not too long ago.

“That was very delightful to everyone,” Gupta informed AFP. “It’s been a very, very exciting journey. I’ve learned a lot… The future of India is very bright.”

Last year 44 Indian unicorns – privately held startups valued at greater than US$1bil (RM4.17bil) – had been minted as buyers piled cash into a rustic lengthy neglected regardless of its huge potential.

Overseas funds put greater than US$35bil (RM146.17bil) into Indian startups in 2021 – a tripling from 2020, based on knowledge compiled by Tracxn – shopping for into all the pieces from fintech and well being to gaming.

Foreign buyers have lengthy most well-liked China, one other Asian nation with greater than a billion folks.

But Beijing’s clampdown on runaway development in China’s highly effective Internet sector, and reining in of large companies, have spooked buyers and wiped billions off giants reminiscent of Baidu, Alibaba and Tencent.

In the startup house, buyers final year sank US$54.5bil (RM227.61bil) into Chinese companies, down from US$73bil (RM304.88bil) in 2020, evaluation by GlobalKnowledge confirmed.

India in contrast turned extra engaging, with its massive pool of well-educated entrepreneurs upending what number of companies work utilizing a fast-developing digital infrastructure.

“India really is that final frontier where businesses can attract a sixth of the world’s population,” mentioned Siddharth Mehta, founder of funding agency Bay Capital Partners.

“I think India is about 13-14 years behind China in terms of size and scale of the market. India’s overall digital marketplace is about sub-US$100bil (RM417.65bil) today but that number can easily be a trillion or US$2 trillion (RM8.35 trillion) over the next 10 to 15 years.”

‘India will be great’

Among these attracted are Japan’s Softbank, which invested US$3bil (RM12.52bil) in India this year, in addition to China’s Jack Ma and Tencent, and US-based Sequoia Capital and Tiger Global.

“I believe in the future of India. I believe in the passion of young entrepreneurs in India. India will be great,” Softbank’s founder Masayoshi Son mentioned earlier this month.

Indian tech additionally noticed a document quantity of preliminary public choices this year.

Companies going public included meals supply app Zomato and wonder merchandise platform Nykaa, itemizing at enormous premiums to their IPO costs and making billionaires of their founders.

At their October excessive, Indian shares had rallied greater than 125% from their April 2020 low, turning into one of the world’s best-performing equities markets.

No income

But some consultants warn that many of these companies could also be grossly overvalued.

For occasion, native fintech large Paytm, the greatest IPO of the year, is but to make a revenue and its share value is a few 40% down from its IPO valuation.

India’s bumper year for startups additionally masks critical issues for an financial system struggling to offer jobs for the 10 million younger folks coming into the workforce each year.

Desperate for employment, many take low-wage “gig economy” jobs, incomes as little as 300 rupees (RM17) a day with little to no job safety.

But for white-collar employees in the startup sector, demand for certified employees has outstripped provide this year.

Flush with money, corporations are competing to recruit and retain prime expertise, providing money, inventory and even bikes and tickets to cricket matches as incentives.

“Recruiters reach out to us all the time,” one tech worker informed AFP on situation of anonymity.

“Salaries have inflated in the last year and it feels like everybody is hiring. People are changing their jobs constantly.”

CoinDCX’s Gupta, recent from his seaside vacation, was bullish.

“If you remain persistent, it’s very possible to create a unicorn, especially if you’re living in a country like India, which is full of opportunities,” he mentioned. – AFP



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