International tie ups boosting india’s startup ecosystem
VARIndia Cover Story Dec 2015
1. 40 December 2015 www.varindia.com
Saurav Kumar
CEO & Co-founder,
Cube26.
Amit Mehta
Country Manager,
Isilon Storage Division
Ravindra Krishnappa
CEO and co-founder
AppsOnChat
Start-ups – Future Enterprises of India
The new buzzword “start-ups” which has
been hovering on the Indian IT industry for
quite a long time has created ripples in the
ecosystem. In recent days, India has become
an incubator for start-up companies. India,
which is one of the youngest start-up nations
in the world, has some of the most thriving
businesses. The technology start-up landscape
has gained momentum and is showing signs
of maturity. The start-ups are playing a major
role behind technological innovations in the
country as they are flexible in embracing new-
age technologies.
As per the NASSCOM Start-up Report
2015, within one year, the number of start-
ups in India has increased by 40 per cent and
is expected to cross 4,200 by the end of 2015.
With over 100-per cent growth in the number
of PE/VCs/angel investors along with a 125-
per cent growth in funding over the last year,
the Indian start-up ecosystem has risen to the
next level. The total funding in India-based
start-ups is estimated to be nearly $5 billion
by the end of 2015. This growth will only
increase as thousands of start-ups are expected
to establish themselves in India, generating
employment opportunities for hundreds of
thousands of people. This will not only pave
the way for innovative services, but will also
act as a major booster for the development
and progress of the Indian economy.
“The start-up landscape does not very
heavily invest in the data centers given the
natureofthebusiness.Thefirstthingthathelps
them is SMAC (Cloud, Mobile, Analytics and
Social Media) platform. They are the fastest
to embrace all these technologies. In a survey
conducted by EMC, we have seen that 85
per cent of start-ups have adopted mobile,
54 per cent have embraced cloud, 46 per
cent analytics and 44 per cent social media,”
said Amit Mehta, Country Manager, Isilon
Storage Division.
Product/ digital start-up landscape
So far, the industry has witnessed
phenomenal growth for the Indian technology
start-up ecosystem, driven by factors such
as massive infused capital, acquisitions and
consolidations, increasing Internet and
smartphone penetration, and an ever-growing
domestic market.
“The technology product start-up
landscape in India is in a take-off state,
having gathered the momentum the entire
ecosystem is now ready to gain altitude,
which essentially would mean that scalable
solutions will see a lot of customer traction
both in the B2B and consumer space, thereby
yielding positive output for the long-term
COVER STORY
2. 41www.varindia.com December 2015
Sundeep Bhat
National Sales Head,
C- Zentrix
Tejinder Oberoi
Founder Director
m1-Order
Ambika Sharma
Founder,
Instappy
Pradeep Agarwal
Chief operations officer,
hSenid Business Solutions
investors,” says Sundeep Bhat, National Sales
Head, C- Zentrix.
“In recent years, the Indian start-up
ecosystem has really taken off and come
into its own – driven by factors such as
massive funding, consolidation activities,
evolving technology and a burgeoning
domestic market,” adds Pradeep Agarwal,
Chief Operations Officer, hSenid Business
Solutions.
The start-ups are riding on the success of
identifying the gaps in traditional businesses
and bridging those gaps with innovative
products.
“Driven by young, passionate
entrepreneurs and professionals who are
looking to integrate technology with
innovative business solutions, the Indian start-
up landscape is, at present, extremely vibrant
and dynamic. Professionals are identifying
gaps in the traditional business models and
are working zealously towards bridging
them through technology. Devices such as
smartphones in particular have provided these
new-age businessmen an extremely feasible
way of enabling services delivery owing to
their ubiquitous presence and massive scope
for future growth. As such, the country is
seeing constant product re-engineering as
well as evolution and implementation of new
and path-breaking technologies,” comments
Ambika Sharma, Founder, Instappy.
VC/PE investors
Venture capital investments in India have
reached Rs.15,600 crore (US$2,363) till June
2015, surpassing the total Rs.14,850 crore
(US$2,250) invested in the entire 2014, setting
the stage for another record year as interest
in local technology start-ups peak. So it is
quite evident that the VC/PE investors are
very keen to invest in India and it is gaining
momentum.
“Globally, VC/PE investors have always
been active in the space of ICT. I see the Gen-Y
of investors slightly more inclined towards the
‘Cloud Powered’ unified communications.
The US start-up community in the ICT space
has seen more than a billion US dollars of
funding in the last year alone and the inflow
of funds will continue for the next few years
with an only cap of rolling out multiple
services over the same platform.
It is important to understand that the
hardware business is difficult to sell. So
hardware has to be backed with strong
software. Investors usually shy away from
investing in the product/hardware domain,
but there has been a good amount of
investment made in the product/digital start-
up domain, especially when it has been backed
by strong software propositions.
“In the near future, we believe investors
will be more cautious into where they are
investing and evaluating the business plans
and strategy further stringently,” says Saurav
Kumar, CEO & Co-Founder, Cube26.
Similarly, Bishal Lachhiramka, CEO &
Co-Founder, Ameyo, states, “Investments
in this field are gradually picking upstream.
Ameyo raised its first round of Series A
venture capital funding of $5 million in July
2015 weighing on the possible opportunities
the field is open to. India has always been
accommodative to venture capitalists, and by
adding start-ups and the overarching emphasis
on customer experience, the investors are
looking forward to new innovations in the
contact centre industry.”
“The pace of VC investments has been
good in technology companies that could
demonstrate large market and scalable sales
model. The total funding in India-based start-
ups is estimated to be nearly $5 billion by
2015. A large share of the investment has gone
in consumer tech firms as opposed to software
companies. In 2016, we will see the share of
investment increase in software companies,”
expresses Nilesh Patel, CEO, Lead Squared.
Although the market has suffered in
recent years because of considerable backlash
against certain start-ups as a result of layoffs,
India continues to grow as a start-up giant.
“The last one to two years saw much
exuberance in the financial markets for start-
ups, but a correction was expected as part of
a natural cycle. With the recent negativity
around start-ups after news of layoffs and
shutdowns, investors have become a lot
more cautious. High valuations demanded
by Indian technology start-ups now need to
be supported by underlying growth, sound
business models and the ability to turn in
profits. That said, it will not impact genuine
sustainable interest for the Indian start-up
ecosystem,” adds Bhavin Turakhia, CEO,
Ringo and Flock.
Technology innovation with start-ups
Unlike traditional companies, start-ups
are open to adopt new technologies to come
up with innovative and fresh products and
solutions. Innovation is certainly on the rise
in India and it is not just because of start-ups
but because of enterprises investing heavily
in R&D. Today, multiple new products have
been brought up by start-ups and a lot of them
are doing well in the market.
Another reason behind the boom of the
start-up ecosystem in the country is because
start-ups are more willing to take risks and
experiment with products. Today, multiple
new products have been brought up by start-
ups and a lot of them are doing well in the
market.
“Technology and innovation are tightly
linked notions. Technology is the platform
on which innovations are founded. It is
becoming quite easy for entrepreneurs who
have ideas to develop a digital tech product
and launch a start-up. New start-ups are
focussing on commerce, analytics, education,
marketing and collaboration. One set of start-
ups becomes the cause of another set of start-
ups. For instance, the rise in e-commerce and
m-commerce is fuelling the growth of start-
ups in the hyperlocal retail and hyperlocal
delivery segments,” opines Tejinder Oberoi,
Founder Director, m1-Order.
“As such, a start-up culture is much
more open to adopting and using the latest
3. 42 December 2015 www.varindia.com
technologies available in the market. This,
in turn, forces tech-based companies to
innovate to provide fresh solutions that can
be leveraged by an ever-growing pool of start-
ups across the globe. Sharing such a symbiotic
relationship, both the industries feed off each
other and depend on each other to grow and
scale.”
“A key factor in this innovation
relationship is the increased penetration of
smartphones across the country. Today,
people in rural areas too own smartphones and
heavily use apps and data, making technology
not just a luxury for the elite few. Start-ups
have capitalized on this, creating apps that
leverage the low cost of smartphones and
infrastructure to bring you goods and services
to your doorstep,” expresses Bhavin.
“The start-up revolution has not only
paved the way for technology innovation and
advancements, but a larger cake of emerging
businesses solely rely on new-age technology
to support their operations. For instance,
the storm of hyperlocals has made start-ups
to gradually shift to mobile platform and
applications as a primary and critical source
of communication and business transaction.
This wave of technology innovation seems
to never cease and surprise customers that are
now eagerly waiting for new advancements in
business,” says Bishal Lachhiramka.
“The present-day Business Models are
looking out for specialized solutions in niche
markets. They are looking for solutions that
are light, canbe easily integrated, are securedin
open networks and ease real-time governance.
Owingtothis,theIndiantechnologystart-ups,
Sanchit Jain
CEO,
DreamOrbit
Bishal Lachhiramka
CEO and Co-Founder,
Ameyo
Bhavin Turakhia
CEO,
Ringo and Flock
Nilesh Patel
CEO
LeadSquared
with their unique solutions, are witnessing
increased traction in whitespace opportunities
like big data and analytics, internet of things,
augmented reality, smart hardware and cloud
computing.
“Since 2010, the Indian technology start-
ups landscape has seen a sharp rise in the
creation of new start-ups and this number is
expected to grow steeply,” Sanchit Jain, CEO,
Dream Orbit
Upcoming technology trends
As start-ups are the innovators of new and
fresh solutions and products, they are the ones
which will guide the upcoming technology
trends. They will be very much instrumental
in upholding a technology as a trend.
“While cloud-based technologies have
dominated the start-up landscape for a while
now, with new breakthroughs constantly
being made in the sector, we can safely assume
that cloud will continue to play a decisive role
in the market. Additionally, data analytics
technologies will play a more vital part in
defining growth strategies by identifying
current and future trends and providing the
budding ventures with valuable insights. This
shall empower them with the tools to plan
their business evolution and will help them
tailor their growth journey for success in
their respective industries,” suggests Ambika
Sharma, Founder, Instappy.
“The new social and economic policies are
driving better opportunities for the year 2016.
We are expecting many small and medium
businesses to open up to technology and join
the mega trend of digital transformation.
Technology would help these SMBs capture
the untapped markets with new innovative
business models and transform the business
scenario in general. New verticals like public
sector, healthcare, media, education and
energy will be emerging and would demand
innovation in IoT, Cloud and Mobile
Application. We will see stronger emphasis
on Human-centric Designed Application
acting more smartly using Big Data,” says
Sanchit Jain, CEO, Dream Orbit.
Listing the upcoming top three
predictions, Ravindra Krishnappa, CEO &
Co-Founder, AppsOnChat, says, “The top
three predictions are Chat led by WhatsApp
will penetrate 60+% of Indian households,
India will have a near-zero legacy on mobiles,
i.e. most people will have a smartphone that
is capable of 3G+ connections and lastly
almost all ‘field’ related services will be both
Geotagging and Mobile enabled.”
“Multiple technologies will dominate
2016, leading among them will be applications
and IoT. As we move ahead, one will see
varied usage of IoT and newer products based
on IoT being launched. The products which
can add utility to the daily lives of consumers
will be the winners. IoT has been talked
about extensively, but very few products are
today available in the market which are easily
accessible to the consumers, have a daily
utility and are easy to use. If one can change
this, it will certainly be a game-changer,”
predicts Saurav Kumar, CEO & Co-Founder,
Cube26.
Message for start-ups
The new generation is the information
generation who wants 24/7 access across
multiple platforms and also wants unique
experiences. So given that start-ups do not
have any legacy, they can immediately
embrace the latest technology and cater to the
digitally native information generation.
To become the future enterprise, the start-
ups need to follow a few standards which will
help them to taste success.
“We analyze five top business drivers for
either traditional or start-up companies to be
successful. These are:
• Predictively spot new opportunities which
mean understanding your customers very
well, have data sets which are aggregated
and doing predictive analytics to become
profitable.
• Creating unique customer experience
which is only possibly when you
understand your customers well.
• Innovate in an agile way. India is very
different from other markets so start-ups
have to innovate their offerings in a very
agile way.
• Operate in real time. So if there is a crisis
you need to address it in real time. It is the
reality of the start-up companies.
• Secure customer sensitive data,” concludes
Amit Mehta. n
COVER STORY