India’s Startup Ecosystem

SHRADHA SHARMA, FOUNDER & CEO, YOURSTORY MEDIA

1947-1991: INDIA’S SLOW DECADESLow economic growth and stagnation in technologicaladvancement

Y2K UNLEASHED AN OPPORTUNITYIndia has gone on to become a super power in the IT services business ($150 billion)

SOURCE: IBEF (FOR IT-BPM INDUSTRY, 2017)

THE 1990s ONWARDSIndia acquired a swagger onthe world stage; thefoundation was laid for futuretalent

India acquired a swagger on the world stage; the foundation was laid for futuretalent

THE 1990s ONWARDS

SOLVED GLOBAL PROBLEMS,LAID AN INDIAN FOUNDATIONThe number of students opting for sciences, math and engineering rose

SOLVED GLOBAL PROBLEMS,LAID AN INDIAN FOUNDATIONThe number of students opting forsciences, math and engineering rose significantly

From a controlled economy in the 90s, India is now a global knowledge destination, attracting talent and encouraging innovation

INDIA’S CHANGINGECONOMIC MODEL

GLOBAL COMPANIES FLOCK TO INDIAThe biggest MNCs have chosen India notjust to cut costs but also to run R&D centres

INNOVATION IS MAKING INDIA A KNOWLEDGE HUBTechnology is the key focus for global and local companies banking on growth

IN THE NEW MILLENNNIUM, STARTUPS ARE MAKING A MARKInnovation spurred startups and fundingled to their strong valuations

HOME TO WORLD’S 3RD BIGGESTSTARTUP ECOSYSTEMStartups are now part ofmainstream business,creating not just newproducts and solutions butalso jobs

SOURCE: ZINNOV-NASSCOM REPORT 2016 (US IS No. 1, UK IS No. 2)

FOR GLOBAL INVESTORS,INDIA IS THE PLACE TO BEGovernment policies are making investments easier, more transparent

FOR GLOBAL INVESTORS, INDIA IS THE PLACE TO BEGovernment policies are makinginvestments far easier, more transparent

We need to fix the basics, as much as weneed our moon shots. This juxtaposition is no longer surprising, it is the norm for India. Nevertheless, our ambition should not be tempered by our reality.

- Nandan Nilekani

40,000startups

70% based in Bengaluru

40% B2B60% B2C

700+ deeptech startups

~$40 billion raised in equity funding (since 2014)

200 incubators& accelerators

20+ statesimplementing startup policies

THE STARTUP ECOSYSTEM BY NUMBERS

SOURCE: YOURSTORY RESEARCH

THE ECOSYSTEM AT A GLANCE

Accelerator and Incubators

Venture Capitals / Angels

Startup Programs by MNCs

Established startups

500 millionActive internet

users in India (Jan2018)

430 millionActive mobileinternet users

in india (Jan 2018)

$25 billion

E commerce revenues in 2018

WHAT DRIVES THEINDIAN STARTUP ECOSYSTEM?

India is also the second-largest market in

the world for social media giants

SOURCE: (1 & 2) IAMAI projections for June 2018 (3) Statista (4) For Facebook, The Next Web, For LinkedIn, a company release - 2017

invested between 2014 and H12018

$40 bnHalf of which was investedin 2017 ($13.7 bn) & H1 2018 ($6.1 bn)

$40 bn

INVESTORS ARE POURING BIG MONEY INTO INDIA

SOURCE: YourStory Research

14 STARTUPS IN THE ‘UNICORN’ CLUB (>$1BN in valuation)

eCommerce marketplace Founded in Oct 2007 Valuation: $21 billion

FintechFounded in Aug 2010

Valuation: $10 billion

Transportation Founded in Dec 2010 Valuation: $5.5 billion

EdtechFounded in 2008 Valuation: $1 billion

Renewable energy Founded in Jun 2011 Valuation: $2 billion

eCommerce marketplace Founded in Jun 2011 Valuation: $1.1 billion

FoodtechFounded in Jun 2008 Valuation: $2 billion

AdtechFounded in Jun-2007 Valuation: $1 billion

FoodtechFounded in Aug 2014 Valuation: $1.2 billion

eCommerce marketplace

Founded in Jun 2008

Valuation: $1 billion

Instant messagiing service

Founded in Dec 2012

Valuation: $1.4 billion

Fintech

Founded in 2008

Valuation: $1 billion

SaaSFounded in 2014 Valuation: $700 million

SOURCE: YourStory Research & Company Filings

Logistics Founded in 2014

Valuation: $980 million

Online grocery Founded in 2011 Valuation: $950 million

Hospitality management Founded in 2011 Valuation: $850 million

Logistics Founded in 2011

Valuation: $700 million

Online event ticketing Founded in 2007

Valuation: 500 million

WAITING TO ENTER THE $1 BILLION VALUATION CLUB

SOURCE: YourStory Research & Company Filings

Teen entrepreneur from Aligarh who set up India’s biggest digital payments company

Diversified into other areas of fintech and also set up Paytm Paments Bank and ecommerce platform Paytm Mall

VIJAY SHEKHAR SHARMAPaytm

RITEISH AGARWALOYOAt age 17, quit college and set up Oravel Stays, now OYO, the country’s biggest hotel aggregator. A $100,000 grant and mentorship from the brightest minds in Silicon Valley gave him the headstart he needed

KUNAL SHAHFreechargeA Philosophy graduate who co-founded a mobile payment platform and sold it for $450 million to Snapdeal

Currently working on his nextventureAlso an angel investor

Turned entrepreneurs as teenagers in thelittle-known field of adtech

Built and sold 5 startups to American &Chinese companies

Bhavin & Divyank Turakhiamedia.net

INDIA HAS MANY MORE SUCH STORIESWe just need to support the right people in the best way possible

• Rajasthan government employee Surendra Tetarwal has created 200 apps to help people in rural areas access knowledge, information

• 81-year-old TV Gopinath’s Farmer Producer Company is pioneering super-crop cultivation, bringing inchemical and pesticide-free chia seeds to the market

• CB Kolar and H S Vijayeendra’s Avanijal uses Bluetooth and a smartphone to control an automated irrigation

IT’S NOT JUST ABOUT BUILDING UNICORNS

SOURCE: https://yourstory.com

• Nidhi Mathur and Geeta Manjunath’s Niramai is an artificial intelligence based,

pain free breast-cancer screeningsolution

• Swapnil Shrivastav’s Uravu Labs that sources water from the atmosphere and purifies it to make it potable

• Ihitashri Shandilya set up MITHILAsmita

to help artists become cultural entrepreneurs by giving them with a platform to showcase theirwork.

…IT’S ALL ABOUT CREATING IMPACT

SOURCE: https://yourstory.com

• Lack of funding in niche areas & areas where returns don’t come quickly (e.g. deep tech)

• Managing cash burn

• Finding the right talent

• Slow-to-evolve regulations (e.g. angel tax)

• Lack of clear strategy

• Lack of mentorship

• Fighting societal perceptions

CHALLENGES FACED

• More VC funds with funds raised from Indian investors

• Longer-term investments in deep tech & deep science

• Bigger appetite for acquisitions in the Indian corporate sector

• More serial entrepreneurs

• Greater traction in the states’ startup policies

• Creating a culture of innovation and innovation-led entrepreneurship among India’s students

FUTURE-FORWARD: WHAT WE’D LIKE TO SEE

YOURSTORYChronicling India’s entrepreneurial ecosystem, one story at a time since 2008

THANK YOU