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WHITE PAPER
THE INDIAN INNOVATION ECOSYSTEM
OVERVIEW, PERSPECTIVES AND OPPORTUNITIES IN THE WORLD’S 3RD LARGEST START-UP ECOSYSTEM
AUGUST 2020
SUM
MA
RY
Editorial 4 INTRODUCTION Frugal Innovation: The Need of the Hour 6 About India 10 About the Indian Start-up Ecosystem 12 Indo-French collaboration 14 I. THE INNOVATION ECOSYSTEM Government initiatives 18 Overview 18 High-growth sectors 21 Opportunities for French companies 22 Leading hubs in South India 23
TESTIMONIALS AND CASE STUDIES Government of Karnataka 28 Surya Digital 30 Lyra Network 32 WEHUB 34 Kerala Startup Mission 38 Numa Bengaluru 41
II. FUNDING THE ECOSYSTEM India’s Venture Capital landscape 46 Tech IA Impact Invest Paris New Delhi 49
CONCLUSION 52SOURCES 53ABOUT BUSINESS FRANCE 54
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- EDITORIAL -
BY
THE BUSINESS FRANCE INDIA TEAM
TECHNOLOGY, SERVICES AND INNOVATION DEPARTMENT
Dear all,
As the world is going through one of the biggest health and economic crisis in 100 years, there has been a wave of innovation across the world. In the context of this crisis, entrepreneurs and innovators are developing quick solutions to answer to the current challenges.
India has the world’s 3rd largest start-ups ecosystem, a pool of qualified talents and most importantly a frugal innovation mindset - called Jugaad - that has always helped the country find ways to tackle problems despite limited resources. In this context, we believe that India can be part of the solution to the COVID-19 crisis. India might be part of the solution for a more digitalized World where Work From Home will become the new normal. On the long run, the country can strengthen its position as a strategic partner and an innovation hub for international and French companies.At Business France, our mission is to help French companies in their international development. As we are focusing all our efforts to support our companies in this difficult time, we see opportunities rising and new models being invented.
Thus, we are honored to introduce our white paper on “The Indian Innovation Ecosystem”.
This paper is published as part of our Ambition India 2020 agenda. Ambition India is our annual business forum that brings together key actors from France and India. With the event currently being rescheduled we are taking this opportunity to publish this paper which objectives are to:
Give a comprehensive picture of the Indian Innovation ecosystem Show the potential of the ecosystem and the opportunities Highlight success stories, share advice, tips and feedback from French and Indian companies Foster collaboration and strengthen relationships between France and India in the Innovation sector
This paper is intended for:
Start-ups and SMEs willing to expand their businesses in India Venture Capitalists and Investment funds willing to identify high potential investment opportunities Large corporations willing to understand the innovation ecosystem and identify areas of co-innovation Start-ups accelerators and incubators willing to strengthen ties between the French and Indian ecosystem
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We would like to express our grateful thanks to our partners and contributors without whom it would not have been possible to publish this paper.
Navi Radjou, Indian-French-American innovation & leadership thinker/advisor
Emilien Coquard, President, La French Tech Bangalore IndiaSouad Tenfiche, Vice President, La French Tech Bangalore India
Karnataka TechKerala Startup Mission
Lyra Network, Christophe Mariette, Commercial DirectorMadhusha Mishra, Head of Corporate Relations, NUMA Bengaluru
Pratheeksha A.K, Head of Startup Programs, NUMA BengaluruSurya Digital - Didier Pichon, President
Tech-IA Impact Invest Paris-Delhi, Luisa MunarettoWEHUB - Deepthi Ravula, CEO
Zinnov - Atit Danak and Shashank Rajeev
INTRODUCTION Frugal Innovation: The Need of the HourBy Navi Radjou (April 2020)
Navi Radjou is an innovation and leadership advisor. A Fellow at Cambridge Judge Business School, Navi has served as Vice President at Forrester Research in Boston and San Francisco. Navi won the 2013 Thinkers50 Innovation Award and spoke at TED Global 2014.
Navi is coauthor of Frugal Innovation: How To Do More With Less, published by The Economist. He is a sought-after keynote speaker widely quoted in international media. An Indian-born French-American dual citizen, Navi lives in New York
As I write this, almost 2 million people worldwide have been infected by Covid-19 and over 100,000 have died. New York, where I live, is now the global epicenter of Covid-19, with nearly 200,000 cases reported to date.*
The world’s 1,000 largest companies—mostly based in the US and Europe—spent nearly $800 billion in R&D in 2018 alone. Yet, they are incapable of quickly producing the millions of masks and ventilators that hospitals need to protect health workers and save the lives of thousands of Covid-19 patients. Clearly, money does NOT buy innovation!
Yet, creative solutions are emerging to fight Covid-19. MIT researchers developed an open-source, low-cost ventilator that could be assembled quickly for just $100, compared to the $30,000 commercial ventilator. Maker’s Asylum, a makerspace in Mumbai, is leading an India-wide initiative to make 500,000 facial shields that cost only 0.66 Euro each: they can be built anywhere in India and can be sanitized and reutilized. And, sports goods giant Decathlon is helping doctors and inventors worldwide use 3D printed components to convert its snorkeling masks used by scuba divers into makeshift ventilators for Covid-19 patients.
All these ingenious yet effective solutions show the power of frugal innovation, a disruptive strategy to create market-relevant products and services faster, better, cheaper. Thousands of nimble entrepreneurs have long practiced frugal innovation in resource-constrained emerging markets such as India—where it is known as jugaad, an improvised fix—to creatively solve critical socioeconomic issues on a shoestring. Jugaad is a resilient and inclusive mindset that is able to transform adversity into opportunity and maximize existing resources to generate greater economic and social value for society.
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7Thousands of nimble entrepreneurs have long practiced frugal innovation in resource-constrained emerging markets such as India—where it is known as jugaad, an improvised fix—to creatively solve critical socioeconomic issues on a shoestring.
I have spent 20 years studying thousands of frugal solutions in India. These solutions are as diverse as India itself, where more than 19,500 languages or dialects are spoken as mother tongues. Innovations “made-in-India” cover a whole range, as depicted in the graphic below.
On the left end of the spectrum, you find low-tech solutions developed by grassroots entrepreneurs like Mansukh Prajapati, a potter in Gujarat who invented a fridge made entirely of clay, and SELCO, a social enterprise that delivers pay-as-you-go clean energy solutions to over 200,000 remote rural households. These solutions are user-driven and are deployed using a “scale-out” approach, that is by leveraging a decentralized supply chain network.
For instance, SELCO employees thousands of young entrepreneurs in hundreds of villages who install and maintain solar lamps locally and collect payments. And the 0.66 Euro facial mask created by Maker’s Asylum is built by makerspaces across Indian cities using local materials.
7* +As of August 7th, 2020, 19,0 M cases in the World, 711.906 deaths, 12,196 M recovered, 4,9 M in the United States, 2,86 M in Brazil, 1,97 M in India and 194,024 in France (30,305 deaths).
On the right end of the spectrum, you find high-tech solutions developed by engineers and scientists in centralized R&D groups in Indian organizations and multinationals. For instance, scientists at CSIR—India’s premier public research institution—have developed a paper strip test for Covid-19 that costs just 6 Euros.
The Mumbai-based startup AlgoSurg uses a patented AI-technology to quickly convert 2D X-ray images into 3D images without requiring an expensive CT scanner or MRI machine. Likewise, the Indian space agency ISRO successfully completed a mission to Mars using just $74 million, which is only 11% of NASA’s own Mars mission.
Finally, the French carmaker used its Chennai-based R&D group to develop Kwid, a 3,500 Euro crossover launched in 2015. Renault’s India team developed Kwid in record time with a limited R&D budget that is three times less than what Renault spends in Europe.
Multinationals like Renault leverage their vast supply chains to “scale up” massively the production and distribution of frugal solutions they developed in India for global markets.
Although these Indian solutions differ in the way they are made and the scale at which they are deployed, their innovators all share two things in common.
First, they all apply three key frugal innovation principles when developing their solution:
Keep it simple, by reducing product complexity and making it easy to use Make it affordable and accessible for all citizens Reuse cleverly all existing resources optimally, rather than reinvent the
wheel.
Second, they rely on the resilient jugaad mindset to stoically persevere through adversity and find ingenious shortcuts to overcome resource scarcity. Jugaad is about never giving up!
Frugal innovation - and the underlying jugaad mindset - is the need of the hour in Europe and the US, whose economies are destroyed by coronavirus. Western firms need a frugal and flexible mindset to not only survive during the current health crisis but also to innovate for success in the recessionary post-coronavirus word, a radically new world where cost-conscious and socially-aware customers will seek more value—and values—for less.
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Western firms need a frugal and flexible mindset to not only survive during the current health crisis but also to innovate for success in the recessionary post-coronavirus word
This whitepaper gives you an overview of India’s frugal innovation ecosystem and introduces you to its key actors—ranging from grassroots inventors and high-tech entrepreneurs to venture capitalists and big multinationals doing cutting-edge R&D in India.
Their methods and solutions cover the full spectrum mentioned earlier. What unites them is their shared purpose to generate greater economic, social, and ecological value using limited resources.
India is expected to contribute to 50% of the United Nations’ Sustainable Development Goals (SDGs) by 2030. Hence, India offers a blueprint for building a “frugal economy”—an inclusive, healthy, and sustainable economy that strives to maximizes the well-being of all citizens within planetary boundaries.
All French companies are eager to learn how to build an inclusive, caring, and regenerative society in the post-Covid-19 world.
This whitepaper is a good place to start.
India to become the alternative global manufacturing hub post COVID-19
Due to the ongoing Coronavirus crisis, India’s GDP growth rate is estimated to fall at 0.8% in 2020, but predicts growth rebound to 6.7% in 2021-22 (source: Fitch Ratings).
We believe that India is well-positioned emerge as an alternative global manufacturing hub for the world, given its emergence as a credible economy.As predicted, India has attracted new FDI in electronics and IT since the beginning of the crisis. In the 2nd quarter 2020, India has received 20+ Billion USD from the USA, Taiwan and Europe. Google has for example announced plans with Reliance the biggest cellphone operator in India and will develop a new smartphone in India for the indian market. Another example is Foxconn which is investing 1+ Billion USD in Chennai to increase the capacity of its factory and will soon start producing Iphone 11 and 12 in India. Apart from low-cost labor, India has a vibrant startup ecosystem that offers tremendous opportunities. In biotech, Biocon, India biggest biotech company, has just announced a global partnership with Voluntis an innovative French SME.
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A. KEY FIGURES ABOUT INDIAEconomic outlook
With a population of 1,3 billion inhabitants and a size that is 5 times the size of France, India is clearly positioned as an emerging economic giant, with rapid development and immense needs. In 2019, India was the 5th largest global economy in the world.
Population: 1.3 billion inhabitants GDP: 2,038 USD GDP growth: 6,8% (2018) / 4,8% (2019) Currency: Indian Rupee (INR) Exchange rate: Rupee (1 EUR= 82 INR- May 2020) Official languages: Hindi, English Other languages: 22 languages specified in the Constitution Capital: New Delhi (25 M inhabitants) Largest cities: New Delhi, Bombay, Bangalore, Hyderabad, Ahmedabad, Chennai, Calcutta Contribution of the Tech sector to the GPD: 6% / 181 Bn USD in 2019 out of 137 Bn USD is for export
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A young and connected populationIndia has one of the youngest populations in the world, with more than 50% of its population below the age of 25. With a total mobile subscriber base of 1.2 billion and over 600 million internet subscribers, connectivity and online presence in India have grown tremendously over the past decade. The pace of adoption of new technologies has accelerated as consumers discover the potential benefits of the transition.
Number of mobile subscribers: 1.2 billion
Number of internet subscribers: 665 M
Average mobile data cost/GB: 0,23 €
Average mobile data usage (GB)/month: 9,8 GB
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B. KEY FIGURES ON THE INDIAN START-UP ECOSYSTEM Contribution written by Zinnov
The Indian start-up ecosystem has seen tremendous growth in the past 5 years, with the overall base growing at 12-15% year-on-year. During this period, India has seen the inception and growth of over 9300 start-ups, cumulatively valued at over $55 Bn1. The ecosystem has given rise to 28 start-ups, each valued at over $1 Bn (Unicorns) of which 11 joined the elite status since 2019. This continuous growth has positioned India in the top 3 global start-up ecosystems behind USA and China.
NUMBER OF START-UPS 9300
NUMBER OF UNICORNS 26
ACTIVE INCUBATORS AND ACCELERATORS 335+
TOTAL FUNDING RECEIVED BY START-UPS IN 2019 4.4 BN USD
Venture capital and private equity investors played a critical role in fuelling this growth by enabling Indian start-ups to make an impact at scale. The growth of the ecosystem has resulted in the emergence of multiple start-up hubs across India.
Over 72% of the start-ups are in the established hubs namely, Bangalore, Mumbai, Delhi-NCR, Hyderabad, Pune and Chennai.
However, the access to funds, local talent, infrastructure, industries and local government support, in addition to cost arbitrage, has enabled entrepreneurs to house their start-ups in smaller cities and towns as well, thus diffusing entrepreneurship across the country.
Figure 1 – Locations of start-up hubs in IndiaCredit : NASSCOM Report Indian Tech Start-up Ecosystem – Leading Tech in the 20s
The ecosystem has witnessed an increase in corporate participation by 12-15% year-on-year. There are over 170 corporates engaging start-ups using multiple approaches such as investment, M&A’s, and open innovation. 2019 has seen corporates actively participating in funding rounds, with over 90% of the corporate investors being global MNCs.
With over 60 active open innovation programs, corporates are collaborating with start-ups to solve business challenges to deliver revenue growth, cost savings, and improve customer experience. Corporate participation enables both revenue and exit opportunities for start-ups, thus contributing to the growth of the ecosystem.
The pace of investment in the ecosystem suggests that the start-ups are scaling quicker than ever before. Over 50 start-ups have greater than $50 Mn in funding as of 2019, indicating a large pipeline of potential unicorns.
The Indian ecosystem has given a platform for start-ups to take their solutions global. 21% of Indian start-ups have their primary markets outside India in regions such as USA, Europe, Africa, APAC, and Australia. In addition to this, many start-ups with primary markets in India have now moved to global markets. The ecosystem has also attracted global unicorns and start-ups to leverage the Indian ecosystem to build their products in India.
With access to a diverse local market and a global market, high quality of relatively inexpensive talent, and an increasing talent base, we expect the Indian ecosystem to grow considerably in the next few years.
« La French Tech » is a movement bringing together start-ups, investors, policymakers and community builders.
The movement supports start-ups through diverse programs, events, funding opportunities, policymaking and a powerful network of French Tech communities across the word.
There are 48 French Tech communities based in 100 cities all over the world power the movement locally and increase the mobility of French start-ups by welcoming them to their city.
The Bangalore-India community (https://www.frenchtechindia.com/) was created in 2019 and counts 150 members including French and Indian entrepreneurs, accelerators and incubators, large corporations, …
The community has a nationwide coverage with members in all the major cities of the country.
There are 3 main objectives of La French Tech in India: Increase the visibility of French Tech companies in India Foster exchanges and partnerships between French and Indian entrepreneurs Promote exchanges and partnerships between start-ups and large groups
At an academic level, 10,000 Indian students chose France in 2019 as their des-tination to study abroad. Various exchange programs exist between universities and research centers with the aim to deeper ties between France and India in the sciences and technology sectors.
In terms of Indo-French cooperation, a roadmap on Cybersecurity and Digital Technology has been signed between India and France in August 2019. The two countries intend to make digital technology a transformative factor in their socie-ties, to foster economic growth, sustainable development and secure enhanced internet access which is essential to bridge digital divide.
With a common desire of the two nations to deepen their cooperation in the digital and technology areas, various initiatives are being created paving the way for any French companies willing to enter the Indian market and innovate with the most promising Indian companies.
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C. INDO-FRENCH COLLABORATION
France and India have always worked on maintaining strong bilateral ties. France has been in India since the 17th century and our companies have been major in-vestors in the country for the last decades (with +21 B USD invested as of 2020). India is one of the most important markets for the largest French companies, with France being the 2nd largest European investor in India.
There are more than 600 subsidies of French companies in India, employing more than 350 000 people, amongst them more than 200 000 work in IT com-panies and generating an annual turnover of +15 Billion USD. Some examples of well-established French corporate in IT are Altran, Amadeus, Atos, Capgemini (+110.000 employees), Technicolor (+4.000 employees), Ubisoft, etc. But also BNP Paribas or Société Générale through their Global Services Centers.
The French Tech scene in India has been growing in the recent years. Well-known start-up accelerators have implemented hubs in India. The Paris-based accele-rator NUMA entered India in 2016 by opening a coworking space and accelerator in the heart of Bangalore. Since then, NUMA has been working with start-ups, cities and corporations to faster innovation.
Airbus BizLab, the Airbus group accelerator has a campus in Bangalore where Open Innovation programs are running to foster collaboration between Airbus intrapreneurs and start-ups in the aerospace sector.
As of 2020, a growing number of French corporate are running acceleration programmes in India, such as Airbus BizLab, Dassault Systèmes, EDF, Schneider Electric, Sodexo, Ubisoft or Valeo.
French start-ups have also started exploring opportunities in India and develo-ping their activity in different sectors. Amongst them are Believe, Blablacar, Brut Media, Dailymotion, Evaneos, Famoco, Happn, Kerlink, Meero, Ocus, OVHcloud, Platform.sh, Sendinblue, Sigfox, etc.
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THE INNOVATION ECOSYSTEM
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I. THE INNOVATION ECOSYSTEM
A. GOVERNMENT INITIATIVESThe Indian Government has put digital transformation at the center of its plans. Startup India is the flagship initiative of the Government of India, intended to catalyze
startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
Startups are important engines for economic growth that will help create jobs and reduce the high unemployment rate of the country.
Some federal states such as Karnataka, Telangana, Kerala or Andhra Pradesh have implemented specific policies to help start-ups, with acceleration programs and financial support. The Indian Ministry of Electronics and Information Technology (MeitY) launched its platform to support start-ups (MeitY Startup Hub / https://meitystartuphub.in/ ).
Measures include:
Simplification and handholding: Easier compliance, easier exit process for failed startups, legal support, fast tracking of patent applications and a website to reduce information asymmetry.
Funding and incentives: Exemptions on Income Tax and Capital Gains Tax for eligible startups; a fund of funds to infuse more capital into the startup ecosystem and a credit guarantee scheme.
Incubation & Industry-Academia Partnerships: Creation of numerous incubators and innovation labs, events, competitions and grants.
B. OVERVIEWContribution by Zinnov
Key enablers
Over the past years, there has been an increase in the numbers of initiatives towards pushing innovation and entrepreneurship, leading to implement a real culture of innovation.
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The number and variety of stakeholders reflect the dynamism of the ecosystem and the common desire to build a robust ecosystem.
Incubators and accelerators: There are more than 330 startups incubators and accelerators in the country. These structures can be private or government led.
Coworking spaces: The coworking space industry has boomed with more than 1,000 coworking spaces in the country. Local players such as 91springboard, Cowrks, Awfis are offering affordable offices to entrepreneurs as well as a network and a space to interact and create connections. WeWork has entered the Indian market in 2017 and already counts 26 offices located in 6 major cities.
Academic institutions: The Indian Institutes of Technology (IIT) are prestigious engineering universities, considered as the 4th largest producer of unicorn startups in the world (after Stanford University, Harvard University and the University of California). Most of the IIT and IIMs have their own Entrepreneurship cells (E-cells) where they incubate and support entrepreneurs.
Large corporations: More than 1250 Multinational corporations have implemented their R&D and IT and Business Process Management centers in India. More and more corporations are setting up Open Innovation programs to collaborate with the startup ecosystem.
Technological partners: India counts IT companies offering great partnership opportunities.
Government bodies: The government’s initiatives such as Startup India, Niti Aayog ATAL mission are facilitating the creation of startups
Venture Capitalists: The investor landscape is evolving with 390+ active institutional investors that have helped startups raised 4.4Bn USD in 2019.
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Various innovation hubs
Bangalore, the capital of the state of Karnataka, is known as the Indian Silicon Valley, and concentrates more than 24% of the start-up ecosystem in India. It has become a hub thanks to the presence of many engineering colleges and renowned academic institutes that have helped multinational companies set up their R&D centers there.
New Delhi and Mumbai (with a FinTech focus) come just behind with respectively 21 and 13% of Indian start-ups.
Other cities also stand out and weigh more and more in this ecosystem, such as Pune (animation and virtual reality), Hyderabad (Internet of Things and Artificial Intelligence) or Chennai (FinTech, Internet of Things or AgriTech).
A global hotbed for technology, innovation, and entrepreneurship
A lesser known fact about India is its key role as engineering research and development centre for global Multinational Corporations (MNCs). Home to engineering R&D and IT-BMP centre to 1250+ global MNCs with more than 1Mn software, embedded and mechanical engineers – India is breeding ground for technology innovation in some of the most well-known products and brands in the world. These 1250+ global MNCs are pre-dominantly from three regions:
65% of the companies are headquartered in Americas (primarily USA) 28% of the companies are headquartered in Europe with UK, Germany, and
France by key contributors 7% of the companies are headquartered in APAC with Singapore and Japan
being key contributing countries
Intriguingly, engineering R&D centres of global MNCs in India employee base is larger than either information technology or business process management centres of these firms. These centres cumulatively export services to the tune of $28Bn with engineering R&D exports being greater than IT-BPM exports combined.
These technology centres are driving digital transformation, platform strategy, adoption of advanced technologies (AI/ML, IoT, Cloud etc.), new product and innovation, and market entry for the global headquarters.
Source: 1) Zinnov GCoE Landscape Study, 2019 edition 2) IVCA Zinnov Report titled “Creating Value for 1.3 Billion”, 2020 edition
C. KEY TRENDS AND HIGH-GROWTH SECTORS The Indian start-up ecosystem is relatively young but already counts success sto-ries and 26 unicorns in 2019.
Flipkart, the Indian champion of e-commerce, bought in May 2018 by Walmart for 16 billion USD
PayTM, the champion of digital payment
OYO, the affordable hotel chain
Zomato, the online meal delivery platform that counts Ali-baba among their many investors and that has acquired Uber Eats in India
If the first Indian unicorns were B2C oriented, more and more start-ups are today developing B2B solutions and using new technologies such as artificial intelligence, Internet of things, blockchain in various sectors.
Diversity in industry sectors is reflective of an ecosystem’s strength. Indian start-ups are currently active in 20+ industry sectors with varying maturity levels.
More mature sectors such as financial services, healthcare, retail and enterprise tech has seen start-ups focusing on newer use cases, while emerging and nascent sectors such as education, mobility, agriculture, industrial and manufacturing are also witnessing growth because of increased investor support.
The sectors are also witnessing an increase in adoption of deep-tech with 18% of all start-ups leveraging deep-tech. The deep-tech start-up pool is expanding at 40% CAGR since 2014 – indicating increased preference for advanced technologies.
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AI/ML has seen widespread deployment in enterprise, FinTech, and HealthTech sectors. Start-ups are leveraging IOT to solve use-cases in manufacturing, HealthTech, and real estate.
The ecosystem has seen a significant increase in the number of start-ups leveraging technologies such as blockchain, AR/VR, and drones. This increased adoption of DeepTech is indicative of the improving technology skills in the ecosystem.
D. OPPORTUNITIES FOR FRENCH COMPANIESOpportunities for French startups:
The Indian market and ecosystem are open to foreign start-ups who can find:
New growth drivers An unparalleled technological support A great talent pool
The various Open Innovation programs show an increasing interest from companies (Indian and foreign multinationals) for innovative and mature technologies. French unicorn and Deeptech startups have a role to play and should look at India as a high potential market.
Opportunities for large French corporations:
Unlike Greater China, where local market size is key reason for a global Multinational Corporation to set-up its base - there are multiple reasons for large corporates to have their engineering R&D centres in India:
India has a strong innovative start-up ecosystem that these MNC can partner with
Not only is the country a strong potential market but it also has proximity to all important fastest growing markets in Asia – and good relations
A growing network of Tier-II cities with infrastructure capable of supporting global R&D, IT, and technology centres – these are home to 18% of all the centres in the country
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A strong Central and State government support mechanism that is encouraging both software & internet and manufacturing enterprises to set-up base
Each year over 1Mn engineering students graduates from Indian universities with at least 100-150,000 being globally competitive for deep research and development roles – making India the biggest source of immediate and long-term talent needs.
For these reasons, it is not just large enterprises but also new-age unicorns like Uber that have their technology centres in India. As per recent study, 26 global (non-Indian) unicorns have their technology teams in India. That is, more than 10% of global (including Indian) unicorns are building products from India.
36 French companies in high-technology industries like Aerospace & Defence, Software & Internet, and Automotive amongst others have their engineering R&D centres in India. These include industry leaders like Dassault Systems, Safran, Faurecia, Airbus, Michelin, and Alstom with countless others.
E. BANGALORE, HYDERABAD AND THIRUVANANTHAPURAM, 3 LEADING HUBS IN INDIABangalore, located in the Karnataka state is the Silicon Valley of India and Asia, a leading and well established ecosystem.
Image credit: https://www.investindia.gov.in/state/karnataka
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Karnataka in a snapshot :
191.791 km2 (the size of Senegal); 64,06 M people in 2014; GDP: 220 B USD in 2018-2019 (4th in India among the 27th States); GDP Growth +6,8%; Economy: Agriculture (10%); Industry (26%); Services (64%); Highlights: Leader in India in the technology sector, both in terms of
investments and exports. It is also a popular investment destination for auto, electronics, food processing, heavy machinery and textiles industries;
IT: World 4th largest technological cluster; +3500 IT companies (Infosys, Wipro, TCS, etc.); more than 1 M direct employees and 3 M indirect professionals; nearly 80% of Fortune 500 companies have their outsourcing operations in Bangalore;
Startups: 2nd fastest growing start-up ecosystem in the world and home to billion-dollar start-ups.
Hyderabad, located in the Telangana state is an emerging ecosystem.
Telangana in a snapshot :
112.077 km2 (the size of Bulgaria or Honduras);
35,19 M people; GDP: 150 B USD in 2018-2019
(8th in India among the 27th States);
GDP Growth +10,5%; Economy: Agriculture (16%);
Industry (20%); Services (65%); Highlights: Hyderabad, the capital of the Sate, is a major IT hub. The State also
contributes nearly one-third to India’s production and one-fifth to its exports in the pharmaceutical sector;
IT: The State contributes to 10% of India’s IT exports and Hyderabad is the 2nd largest contributor to revenues from IT exports of the country. +1500 IT/Ites companies.;
Startups: Fast growing start-up ecosystem; T-Hub is currently the biggest incubator and coworking space in India and should become one of the biggest in the World by the End of 2020 with the inauguration of a 30.000 sqm building (almost the size of Station F).
Image credit : https://www.investindia.gov.in/state/telangana
Thiruvananthapuram, located in the Kerala state is a nascent ecosystem.
Kerala in a snapshot
38.850 km2 (the size of Bhutan, bigger than Taiwan and smaller than Switzerland);
34,5 M people in 2017 (2,6% of India);
GDP: 110 B USD in 2018-2019 (13th in India among the 27th States);
GDP Growth +11,6%; Economy: Agriculture (11%); Industry (25%); Services (64%); Highlights: Largest producer of coir and coconut in India; Highest tele-density
and penetration of optic fibre cable in India; 75% of spices exports from India are sourced from Kerala; Highest literacy rate in India (94%); One of the most sought-after tourist destinations in Asia;
IT: +800 IT companies (Infosys, Xerox, USG, etc.), more than 100.000 employees;
Startup Kerala: 2500 start-ups, 30.000 jobs, +120 M USD of funding; +20 M USD revenue generated; 300.000 sqft Incubation space and +1000 funds of funds.
Image credit: https://www.investindia.gov.in/state/kerala
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TESTIMONIALS AND CASE STUDIES
Success stories:
Through Government of Karnataka’s start up initiatives, several start-ups have also been able to grow tremendously in a short span of time :
Share mobility start-up Bounce, initially funded by Government of Karnataka raised $105 million.
Ninjacart, a start-up registered with Karnataka Start-up Cell, has developed an online platform through which retailers and merchants can source fruits and vegetables directly from the farmers. It is now valued at over USD 320 million.
Quikr, incubated at Government of Karnataka attracts over 30 million unique users a month.
Healthcare start up, Niramai has gained traction for its solution to detect breast cancer early since winning Government of Karnataka’s grant. The start-up has raised USD 6 million in Series A funding led by Japanese VC firm Dream Incubator, Beenext and other investors.
Government of Karnataka is now finalizing the contours of a regulatory sandbox for disruptive technologies – an experimental environment allowing disruptive technology to be used within a specified protected data set, where multiple innovations can be tested and failures analysed without causing any form of systemic risk.
Such initiatives are indeed the need of the hour and will go a long way in bringing about more innovation into the country. As we all move forward, it is important to note that technology implemented at speed, coupled with global coordination, can be the most powerful tools for bettering lives of citizens.
Today, the entire globe has come under one umbrella to fight against COVID-19 and Karnataka looks forward to deepening engagement with France in these challenging times to create a better tomorrow across all geographies and strata of society.
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F.TESTIMONIALS AND CASE STUDIES
Department of Electronics, Information Technology, Biotechnology and Science &
Technology, Government of Karnataka https://itbtst.karnataka.gov.in/english
Karnataka, the IT hub of India
The unprecedented nature of COVID 19 pandemic and the uncertainty surrounding it has created a very challenging environment around the world. With the increased disruption and uncertainty that the outbreak has caused, businesses and governments are responding to the pandemic with new strategies and initiatives. As we move ahead, innovation, science and technology will play increasingly important roles in our lives – for governments, enterprises and citizens alike. The State’s forward-looking policies, formulated in consultation with industry stakeholders, played a key role in making Bengaluru (Bangalore) the “IT Hub of India “.
The State Government has sponsored almost 125,000 sq. ft. of start-up incubation space
To bridge the gap in funding for specific sectors, Karnataka Innovation and Technology Society (KITS), GoK, is also providing Venture Capital Funding to early stage and mature start-ups/companies via sector specific funds for IT, biotechnology, AVGC and semiconductors. 357 start-ups have been funded with an amount of INR 86.75 crore ($ 11.45 million) till date.
GoK has also recognized the potential impact of disruptive technologies and has established eight Centers of Excellence (CoEs) with prestigious institutions as anchor institutions.
Bengaluru has an ecosystem of reputed high-quality academic Institutes, successful IT corporations and new age start-ups that has led the world’s biggest MNCs to set up their R&D houses like Google, Microsoft, SAP, Samsung, Capgemini, Société Générale, Airbus, Schneider Electric…
Bengaluru’s inherent strengths such as easy availability of talent in tech and life sciences, high output and success rate of start-ups, large number of patents and innovations, and continued Government support via funding, incubation and policy interventions, have significantly contributed to making it a global innovation and start up hub.
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TESTIMONYSurya Digital
Didier Pichon, President, Surya Digital
https://www.surya-digital.com/
Surya Software Systems Private Limited is an IT service company based in India, created in 1999 by D.N Prahlad, chief executive officer and member of the board of directors of Infosys.
The company has been working with France for twenty years. Surya Software Systems Private Limited inaugurated its French subsidiary Surya-digital in 2017.
Didier began his information technology career with Renault Automobiles where he was responsible for all industrial systems utilized in the management of product flow for vehicles and assembly parts. Next he joined the Salomon Group where he oversaw the development and worldwide implementation of all the systems and applications used by the company and its affiliates. In 1995 he was appointed as the Group’s Executive Director for Information Technology and Logistics.
In 2000 Didier was recruited by luxury house Chanel as Senior Vice President of Information Technology. He spent the next 15 years rebuilding the company’s enterprise resource planning systems to state of the arts standards, including entering Chanel into the digital age.His areas of specialty are information technology, logistics, and digital information management sectors. Why and how did you start working with India?
I started working with India in the 90s after an economic crisis that the company Salomon was facing. I was looking for a technological partner that could support me in the deployment of a commercial system in the different countries where Salomon/Taylor Made was present. The French consulting firms didn’t have any international expertise and their costs were very high. This is why I went to India and I found a company with around 1000 employees with whom I signed a first contract. This company was Infosys.
What was your vision on India at that time and how has it evolved?
Initially, I went to India to look for competitive costs. Then I went there for the quality, methods, flexibility, reactivity and innovation that India offers.
What were your motivations to invest in the Tech sector in India?
I invested here because I have partners that I can trust. Before anything, it’s a matter of human connections. Then, because I believe that the transformation of European companies can be supported by the use of innovation that comes from India. The digital transformation of large companies is a huge task and it must be done by continuing to operate the core systems of the company. I also believe in the innovation capacity of Indian companies, in their ability to adapt to future challenges. I really believe that Indians have an amazing ability to work on new technologies.
What are the main characteristics of the Indian IT market?
The IT market in India is huge and allows you to find all resources without limits (or almost). All the skills are available. You can build extremely efficient organizations to meet corporate IT challenges. Another strong advantage of India is its educational system, the engineering schools are excellent, at least as good as the ones in France.
What are your advice to French companies and entrepreneurs who would want to explore opportunities in India?
India is a complex country, and the first advice I would give is to partner with Indian companies who will help the company setting up a center and overcome all the main difficulties. The skills required to create a center in India are wide and without partners on site it will be very long for French company to set up. Surya offers this type of service with a very flexible model, ranging from conventional project subcontracting to the creation of JV in coordination with the company. We want to set up organizations with our customers that are the extension of their IT organizations.
Examples of projects led by Surya for French companies in India:
JV creation with a French company in the luxury industry, AI project development, image treatment, testing, skills center, setting up applications and software developers’ teams, …
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INTERVIEWLyra Network
Christophe Mariette, Lyra Network Pvt. Ltd. India, Chairman
https://lyra.com/in/
Lyra Network is a Fintech providing Payment network and Gateway for retailers and ecommerce. It is a me-dium sized company with a team of 300 employees around the World with around 70 in India which is one forth of the total strength. Lyra set foot in India in 2008 and works solely for the South Asian market with major Indian banks such as HDFC, RBL, Kotak, SBI to name a few.
Can you introduce Lyra India?
We are located in Mumbai close to our customers - the banks. I started it 12 years ago when I hired Rajesh Desai who is still the CEO of the company. During the first years there were only a few people in India because we wanted to grow Lyra India profitable. Today we are connecting more than 1 million (10 lakh) Point of sales and are the e-payment gateway for more than 20 000 shops across the country. Our redundant data centers are located in India. From the very beginning, we follow the “Make in India” spirit since our development and production teams are located in India for the Indian Market.
How would you describe the Fintech Market in India?
The Fintech Market is very dynamic. 5 years ago it was not the same but following Prime Minister Narendra Modi’s announcement of demonetization of all ₹500 and ₹1,000 banknotes on the 8th of November 2016, that sealed our journey to further success. The aim was to increase tax collection and to fight against black money, evasion and counterfeit bank notes. FinTech is now amongst the most thriving sectors at present in terms of both business growth and employment generation. Globally, the FinTech software and services industry is estimated to touch $ 45 bil-lion by 2020 and Payment companies were the highest funding choice with $ 2.1 Billion while pressure from the Indian government on prices of payment service is
stronger to facilitate digital payment. We have seen many new payment methods put in place such as Rupay, Adhaar Payment , UPI (Instant payment), ewallets.
An anecdote to share with us?
Two years ago there was a fire in our office tower. Fortunately for our team it was on a Sunday and nobody from Lyra India was injured. During two months we had to work remotely with no notice. Therefore when Covid 19 sanitary measures were decided, we were completely prepared and trained.
Indian Payment market opportunities are huge with a population of 1,3 Billion inhabitants going towards digital Payments. The market is very competitive with a high pressure on prices from RBI and the competitors battling for market shares with a lot of money being raised.
For French companies with good technology, with a long-term perspective and good Indian managers, it is a great opportunity. Do not hesitate to ask help from Business France India, their very qualified and friendly team. They will make you win!
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INTERVIEWWEHUB
Deepthi Ravula, CEO WEHUB
http://wehub.telangana.gov.in/index.html
WEHUB is India’s first state-led incubator for women entrepreneurs. Located in Hyderabad, it is an initiative of the Government of Telangana (a state situated in the South of India). Telangana is one of the most active Indian state in bringing the culture of Innovation and Entrepreneurship.
Can you introduce yourself and WEHUB ?
My name is Deepthi Ravula, I am the CEO for WEHUB India’s first state-led initia-tive to promote women entrepreneurship. I was a hardware engineer working in the Valley and a Joint Director for Electronics for the Government of Telangana before I started in my current role at WEHUB.
When we started thinking about creating WEHUB, we noticed that while the Go-vernment of Telangana and India had various policies and incentives to promote women entrepreneurship, we never actually saw any women entrepreneurs taking these benefits.
This is what got us thinking and we created WEHUB in 2018. At WEHUB we do 3 things :
1. Government Policy Operationalization:
We evangelize the government policies to make them accessible to all our entre-preneurs.
For example, there is a policy by which entrepreneurs can get a loan of 2 crores roupies without collateral. Not a lot of entrepreneurs know about it and a lot of women entrepreneurs end up taking loans from friends and family. That gets them in an endless cycle of debt and prevents them from scaling faster.
2. Incubation:
We focus on women entrepreneurs across sectors, we work in FMCG, Technology, Manufacturing and Ecommerce.
We work extensively with women entrepreneurs in rural parts of India. We help them create and scale their enterprise where they are.
We want to create more role models amongst women in the rural areas. By creating employment opportunities in rural parts of the country, we would help stop migration to urban cities and solve a lot of urban challenges.
Our incubation focuses on entrepreneurs across scale, operational capacities, and academic qualifications. One day we work with someone who works with Boeing and the next day an entrepreneur who is trying to raise 5 lakhs rupees as a loan !We find those women who have an entrepreneurial spirit and want to create a local industry.
In 2018, for our first cohort, we received 295 applications and selected 26 start-ups for incubation. We also ran a social enterprise cohort with 12 start-ups.
3. Ecosystem building
We want to be a platform for entrepreneurs and create more global market opportunities. We are creating an ecosystem by collaborating with every incubators. When our entrepreneurs come to WEHUB they have access to the entire ecosystem.
Could you tell us more about the Telangana government initiatives to foster entrepreneurship?
The Government of Telangana is helping the entrepreneurs by:
Creating focused incubators and maker spaces which are accessible to all
Offering a variety of government vehicles such as subsidies and other perks
Amplifying our entrepreneur’s successes and creating role models, which is something that is personally done by our Minister
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The Telangana Innovation Ecosystem:
Source : WEHUB
Before the Government of Telangana created T-HUB, the concept of incubator did not exist in India.
T-Hub became a model for software enabled start-ups. That has given us a lot of traction.
T-HUB is the first start-up incubator of the country created in 2015. It is considered as the most iconic start-up incubator in India. T-Hub Phase II, which will be the second largest start-up incubator in the world (after Station F in Paris) will be launched in 2020.
Then we focused on women entrepreneurs with WEHUB, and on other sectors such as Science. Indeed, Hyderabad creates 26% of the world generic medicines so we created RICH to help research from labs get to commercial markets. And we are creating TWORKS which will be India’s first hardware prototyping facility.
You have been in the ecosystem for a while, what are the changes that you have observed? How do you think the various government initiatives have helped boost entrepreneurship?
Initially in India, people want to go from one level to another and are not very risk taking.
But the push that the national government is doing helps seeing entrepreneurship not as a risky move anymore. A mindset change has happened.
In the last 2,5 years, I have seen more women taking the path of entrepreneurship, on various fields including Deeptech. We have a women entrepreneur who makes earth moving machinery and another one who makes high precision equipment for the Defense sector.
Seeing more women entrepreneurs has brought more inclusiveness and community change.
We have women entrepreneurs coming from 200 to 300 kms to meet us. We also evangelize a lot about entrepreneurship, we cover about 800 to 900 kms to get to these women, and we have seen a major cultural change.
What can be done to foster collaboration between the Indian and French Innovation Ecosystems?
We are going to launch a start-up exchange program with an incubator in Portugal. 5 start-ups from India be sent to Portugal and Portuguese start-ups will be able to come to India.
For the Indian start-ups, it will be a way to dip their toes into the EU market.
Portuguese start-ups will be able to come to WEHUB, use our space as a soft-landing platform in India and get our support (help on tax and legal aspects, access to the ecosystem, market research, …).
This is something we would like to do between France and India too.
We also want to create a worldwide network of connected incubators working on women entrepreneurship to help entrepreneurs find cofounders and collaborators as well as identify market opportunities abroad. It would also be a way to foster technology exchange and cross learnings between ecosystems.
We are discussing with incubators in Australia and Taiwan about it and would be very interested in doing something like that between India and France.
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TESTIMONYKerala Startup Mission
KERALA STARTUP MISSIONhttps://startupmission.kerala.gov.in/
On the South West of India, renowned worldwide for its beach, backwaters, tea plantation and beautiful landscapes, Kerala is on the tipping point of a big social revolution. After focusing and building tourism in the State, Kerala has now single-mindedly focused on building a successful startup ecosystem.
Through the establishment of a dedicated agency — Kerala Startup Mission (KSUM), Kerala strives to create a vibrant ecosystem of sustainable startups that work on exponential technologies, developing solutions that address the problems of the society at large.
2500+ registered startups, 300 000+ square feet of incubation space, 35+ incubator, 200+ mini incubators, Future technologies lab, MIT Super Fab lab to promote digital fabrication and 22 fablabs including mini fablabs are
Seaside Huddle / Tech Startup Conference Seeding Kerala / Investor Networking Program
IEDC SUMMOT 4000+ Student Innovators She Loves Tech / Women Entrepreneurship Conference
Source : Kerala Startup Mission
The corporate linkages program of Kerala Startup Mission ensures that Kerala startups (scaleup/product stage) are getting introduced to the industry which includes corporates (local/national), MNCs, cooperative sector companies, corporate accelerators etc. The Government of Kerala serves as the testbed for startups to pilot their product through the unique Government as a Marketplace Schemes since 2017.
National and International exposure and recognition
Getting the startup exposed to international avenues is always critical and being the responsible ecosystem player Kerala Startup Mission has been part of more than 25+ global startup conferences and thereby providing exposure to more than 130 startups from the state.
The recognitions that KSUM received from the Government of India for becoming the Top Performer State in 2018 and also the best public accelerator award by UBI Global a Sweden based research organization has encouraged and made the team more responsible to support the startups in the best ways possible.
Success stories. From Kerala to the world
Through this progressive ecosystem, many startups have taken off in Kerala. A few startups among the many that showcase the success story of the ecosystem in Kerala are:
The linkages for startups are very crucial and the state has evolved a set of unique schemes for providing Government, Corporate and International connections in a very smooth manner.
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1. GenRobotics Innovations: GenRobotic Innovations specializes in the design and development of robotic solutions to address social issues. Its solutions combine the use of robotics and AI. Its most famed product is “Bandicoot” a semi-robotic device with a human-controlled interface to clean manholes.2. Sastra Robotics: This startup is leveraging human-machine interface to provide solutions to various industries. It helped Bosch make a shift from manual testing of touchscreen devices to the Sastra’s SCARA robot, operating at about 900 clicks per minute.3. Yuva Pay: Taking into consideration the low bandwidth or patchy internet connectivity in rural areas, Yuva Pay has designed a platform that doesn’t need the internet to make local payments. 4. CareStack: Bringing cloud technology to the dental industry. Recently, the startup raised $28 Mn in Series B round led by Steadview Capital and California-based dental plan system Delta Dental.5. Rapidor: This Kochi-based startup runs a single-window platform for SMEs to manage their sales orders, inventory, invoice, and payment collections.
Pandemics and natural disasters
Pandemics are always a challenge to handle for any Government and in the last few years the natural disasters have affected Kerala severely.
The experience for the state during these times of the calamity was unique and these are the times when Kerala realized the potential of its startups.
Kerala immediately rolled out the application named GoK Direct Kerala with the support of Qkopy to provide authorized information on Covid 19, being the first state to do so (Government of Kerala also adopted the solution of QKopy during flood and Nipah virus situations). This was followed by implementation of various systems like epass by iBoson, Robots for hospitals by Asimov, comprehensive telemedicine solution by QuickDr, managing state-wide data of patients with primary and secondary contact with passengers and people under surveillance by Thought ripples, ventilator manufacturing, mask manufacturing, face shields, UV disinfectants etc. Kerala witnessed the emergence of many new startups with innovative technologies in the field of pharmaceuticals, ecommerce, logistics and healthcare as well.
PRESENTATION AND CASE STUDIES Numa Bengaluru
https://www.bengaluru.numa.co/
About NUMA
NUMA is an international innovation hub. Just after the millennium, NUMA created Paris’s first digital entrepreneurial association, first coworking space, first startup accelerator and first open-innovation program in France.
In 2015, when we decided to launch NUMA’s startups accelerator and corporate innovation programs in Bangalore, India was a fast-growing ecosystem with a clear potential for innovative solutions and products. With policy changes and extensive support from various State Governments, startups were mushrooming in different parts of the country including Tier 2 and 3 cities. These startups needed a launchpad and the right exposure to become world class. NUMA with its global presence has been able to provide a recipe for founders to build, launch and grow rapidly.
With its high density of tech Indian giants and multinationals, Bengaluru is a growing pool of young, highly educated tech professionals ready to take a leap of faith into entrepreneurship.
In India, the tech startup ecosystem of Bengaluru is still unparalleled and it continues to develop, rooting itself in the city’s open and cosmopolitan culture, a fertile soil to the innovation ecosystem.
Activities and programs to help Corporates collaborate with the Innovation Ecosystem
The following programs are the major types undertaken with our corporate partners:
Acceleration programs – Help our partners work with startups and foster innovation in their domains and industry
Internal Innovation programs – Inculcate lean startup methodology and innovation culture
Open Innovation programs - Collaborating with multiple partners to find a solution to one or many challenges.
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Cases Studies
A. Acceleration program powered by NUMA for one of the largest Oil & Gas companies in the world.
One of the largest Oil & Gas companies set up its innovation hub in India to work towards energy transition for India by engaging with innovative companies.
NUMA worked very closely with the corporate innovation team to ideate, design and build a program that ensures optimal acceleration-startup fit. The 6-month program focused on 10 mid-growth stage energy startups was designed to address the core needs of these startups to ensure their growth and scale into large global enterprises.
B. Acceleration program powered by NUMA for an Aerospace Major
When the company decided to set up their innovation program in India, they partnered with NUMA to design and build a challenge-based co-innovation program. The idea was to use the technology built by the startups to solve their internal challenges.
Testimonial: Hariharan Ganesan, Head of Digital & Engineering Capability at Rolls-Royce India
“In a very large traditional organization like Rolls-Royce, the need for digitization led to the innovation drive. R2 data lab was formed to drive this initiative globally. Though we had the drive, we were looking for right partners to foster the change, this is when we started working with startups. India being the second largest populated country in the world with a rich cluster of digital startups, we started our acceleration program in 2019 in partner with NUMA Bengaluru”
C. Open Innovation - the DataCity project
DataCity is an open innovation program reinventing the cities of tomorrow using data and technology. It brings together large corporates and startups to develop innovative solutions to the challenges faced by municipalities, through the use of data. Created in 2015 by NUMA and the City of Paris, the program is now active in Barcelona, Berlin and Bangalore. NUMA Bengaluru dedicated their first program to address the challenges of water. Working with a major waterworks company, BWSSB (Bangalore Water
Supply and Sewerage Board) and a technology based startup.
Corporate Speak : Nicolas Bockhoff, General Manager Water Services South India at SUEZ India
“We at SUEZ are committed to supporting innovations for our communities. Over the last two decades, SUEZ has been an important partner of Bengaluru BWSSB in developing and maintaining world class infrastructure for water and wastewater treatment. In recent years, SUEZ has helped BWSSB to reduce water losses in core city areas with innovative leak detection technologies.
Taking advantage of skills and dynamics of the Silicon Valley of India with an open innovation program such as DataCity helped in accelerating the digital transformation by developing a data science technology solution for intelligent water losses management. Working without any formal business relationship through the Datacity program facilitates more open discussions and brainstorming sessions. Corporates should not underestimate the innovation potential of the local partners. Consultational help from organisations like NUMA is recommended and helps in understanding, categorising and prioritising the requirements.
India is a very safe business environment compared to many other similar countries. Large multinational organizations should consider creating affordable and market-tailored geo-local solutions instead of exporting solutions.”
NUMA’s future plans in India
The Innovation ecosystem’s growth in India has still tremendous opportunities to offer with founders diving deeper into technology trends and challenges to overcome (infrastructure, funding, new primo entrepreneurs...).
As an enabler, NUMA Bengaluru will keep evolving its solutions and services to fit the new needs emerging from an ever more complex ecosystem to support our corporate partners and startups founders. We will increase our footprint in Asia to grow with our partners.
Our innovation trainings, workshops and bootcamps are now fully virtual to respond to the necessary circumstances but also to support a mesh-like virtual innovation ecosystem that is just beginning to emerge.
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FUNDING THE ECOSYSTEM
II. FUNDING THE ECOSYSTEMCONTRIBUTION BY ZINNOV
Venture Capital and Private Equity (VC/PE) firms are an indelible part of Indian start-up ecosystem. They are playing an increasingly vital role, not just as wealth creators in the traditional sense, but as orchestrators of value creation. VC/PE firms are creating value by channelizing and sustaining growth; thereby impacting and influencing every player in the ecosystem.
In 2019, Indian start-up ecosystem raised $6.5Bn+, against $4.9Bn+ in 2018, in equity investments from global investors.
Highlight of 2019 was the near equitable funding in early stage and late stage funding. Early stage investments are reflective of a country’s current and future potential – it is indicative of economic value being created. To give a perspective,
50+ start-ups in India have raised more than $50Mn+ in cumulative funding, of these 35+ were added in 2019 alone – that is a 3X growth
Base of start-ups with cumulative funding in the range of $100-500Mn, in the same period, grew 6X
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$ 397
$1 599
$2 964
$4 960
$ 371
$2 588
$3 587
$6 546
Seed Early Late Total
Growth in Funding of Indiant Start-ups
2018 (Jan to Dec)
2019 (Jan to Dec)
Total and Stage-wise Investement in $ Million
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This growth in investments was on record-high participation of Venture Capital and Private Equity firms (VC/PE) across all investment stages. Number of unique VC/PE investors grew by 14%, over 2018, to 390+ with PE investors growing 1.5X.
Add to this 90+ global corporates making equity investments in Indian start-ups in 2019. This most interesting aspect of corporate participation is that 80% of these are global MNCs and Tech Mafia.
Take this perspective further, it is also interesting to note that More than 70% of all capital invested by VC/PE firms in India is in fact
global capital – from countries like USA, Japan, China, Canada, and Europe
Every single company, collectively called Tech Mafia, have an active investment team in India – including Facebook, Apple, Google, Amazon, Baidu, Tencents, and Alibaba
4 of Top 10 US VC firms are active in India - Accel Partners, Sequoia Capital, Bessemer Venture Partners and GGV Capital
10 of Top 10 Global Private Equity firms are active in India. This includes the Carlyle Group, KKR, Blackstone, TPG and General Atlantic being just few of the names
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2 0 1 8 2 0 1 9
$1Mn - $10Mn $10Mn - $50Mn
$50Mn - $100Mn $100Mn - $500Mn
1018
18
285
15
5
17
2018 2019
$1Mn - $10Mn $10Mn - $50Mn
$50Mn - $100Mn $100Mn - $500Mn
Venture capitalNumber of unique and active investors
Private EquityNumber of unique and active investors
Breakdown by deal size Breakdown by deal size
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• 8 of Top 10 Global Unicorn Hunters, that is firms with most unicorns in their portfolio, are actively investing in India. This includes Tiger Global, Kleiner Perkins, DST Global and Fidelity Investments amongst others.
In past decade, Indian start-ups have raised USD 42Bn+ in equity investment. Impact of VC/PE investment firms has been significant across different dimensions:
a) Innovation and entrepreneurship are no-longer limited to primary start-up hubs like Bangalore, New Delhi and Mumbai. Start-ups are mushrooming outside these primary hubs at 25% CAGR since 2014, which is 2X the national growth rate.
b) 33% of all active and funded start-ups in India are in cities outside Bangalore, New Delhi, and Mumbai; and at least 04 unicorns are based in cities like Pune, Hyderabad, and Chennai.
c) Funded start-ups have created over 2.6Mn indirect and 0.5Mn direct jobs in the last decade alone – a significant contribution to national economy
d) Cumulative value of Indian start-up ecosystem is estimated to be approx. USD 140-150Bn with wealth being created for all stakeholders – founders, business angels, advisors, employees, incubators, accelerators, and VC/PE firms
e) An estimated 25-30% of the ecosystem’s valuation is in hands of individuals – founders, business angels, advisors, and employees.
Sources:1) NASSCOM Zinnov India Tech Start-up Landscape Report, 2019 edition2) IVCA Zinnov Report titled “Creating Value for 1.3 Billion”, 2020 edition
At the heart of it, VC/PE firms have given wings to those selected by talent and talent alone, to execute and metamorphose their dreams into reality. Through their actions, VC/PE firms have given rise to the meritocratic capital for the new India. It can be safely stated that Indian start-up ecosystem will continue to be a preferred option for global investors.
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INTERVIEWTech IA Invest Paris New Delhi
Luisa Munaretto, FounderTech-IA Impact Invest Paris – New Delhi
Luisa Munaretto, VC and entrepreneur. Inspired by the socio-economic transition of India, its cultural legacy and tech-savvy ecosystem, she is doing business in India since several years. She regularly invests in start-ups and serving as independent board member of both listed and privately held companies which are showing an Indian/Asian angle in their expansion strategy.
In the Technology and Innovation sector, what are the key trends and sectors worth exploring?
All the startups able to capture the interest and the purchasing power of the mass market speaking their own language have tremendous potential. Until now the digital B2C space was oriented to the upper middle class. The next step is being able to address the mass market which is not English speaking.
The main verticals alongside the innovation ecosystem which have benefiting of massive investments from VC ,PE funds & business angels networks are:
Healthcare:
Online doctor consultations and all startups related to digital healthcare but also the ayurvedic and wellness sector. For example, NirogStreet is very successful company which is building a powerful platform of Ayurvedic online doctor consultations. Healthcare is also one of the more attractive verticals for PE and VC investors: healthcare dedicated funds like Tata Healthcare, Invascent, Somerset and India Venture advisors are successfully investing across the different segments of the industry.
Artificial Intelligence:
For example, Niki.ai is an artificial intelligence-powered chatbot which works as an intelligent personal assistant. Niki.ai helps translate in vernacular version any
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website or mobile applications, making it possible to capture the mass market in a meaningful way.
Fintech:
Money transfer solutions and Fintech dedicated to “unbanked” people, who do not have access to a bank account. Start ups like PhonePE App dedicated to instant money transfers with UPI , “Pine Labs” as new-age merchant platform accepting multiples payments’ modes and “PhonePE” as are both meaningful examples of “made in India” innovations in the space
Internet of Things (IOT):
As emerging deep tech vertical, the IOT segment is witnessing a few successful start-ups: COQii is an integrated preventive healthcare platform which provides End2End healthcare & wellness experiences, Planys Technologies, which is a pioneer of underwater robotics inspection for industrial sectors in India.
France and India: How to strengthen their ties in the Innovation Sector?
There is no French presence in India in terms of Venture Capital, Private Equity, Asset Management in India, compared to other countries like USA (Sequoia, Accel and many others) and Japan (Softbank).
France has a local industrial presence (Sodexo, Sanofi, Renault, L’Oréal, Decathlon, …), whilst the key driver to unlock and accelerate business opportunities for French corporates and investors India would be the establishment of French PE & VC/asset management ecosystem on the ground.
However, the image of India for French investors is not necessarily very positive. The Venture Capital Symposium that we organized in 2018 and 2019 was a good starting point to improve this image. The second edition saw 17 French venture capitalists, business angels, and corporate funds participating, to identify actionable investment opportunities in India.
Would you have any advice to share to any fund or VC willing to identify investment opportunities in India?
The best way to capture & combine the two countries’ competitive advantages would be setting up various Indo-French initiatives to facilitate investments in key areas of excellence such as healthcare, medtech or fintech.
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This could help set up a French “financial ecosystem” presence in India. I’m exploring a couple of options in that direction.
The strategy of Verlinvest family office represents a meaningful example of how to start to successfully invest in India. Verlinvest is a prominent Belgium family office implementing a consumer-focused investment’s strategy.
They started investing in the local top quartile funds to acquire a deeper knowledge of the market and its practices. By this approach, they co-invested without too much risk’s exposure which is the main challenge for new entrants. As a second step, they set up their own fund, Mumbai based, which is investing in the space.
I would say that investing in India requires patience and a lot of flexibility, but also a real underlined motivation and genuine comprehension/appreciation of local culture and habits. You cannot be in India with an exclusively opportunistic & financial approach as you are investing with a mid-long term horizon which is more aligned to the country’s evolution. My personal driver is to be part of the transformation of the country as VC investor which contributes to create value leveraging the Indo-French tech competitive advantage.
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CONCLUSION
“India is the cradle of Human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great great mother of tradition. Our most valuable and most astrictive materials in the history of man are treasured up in India only!” - Mark Twain
India is at the same time a huge, complex, sometime difficult, but always rewarding country full of opportunities and resources. In Tech and Innovation, the country has moved over the last decade from the back office of the world to a booming R&D and innovative hub. Numbers speak for themselves.
Millions of engineers are trained each year. India is a leading BPO player and is currently the 3rd startup hub in the World with thousands of startups, 26 unicorns and hundreds of scale-ups and future unicorns. According to a survey published in 2017, Indian IT universities rank 4th in the global ranking of unicorns’ founders; the Top 3 are all North American.
India will play a key role in the future of Innovation, with strong contribution to digital payments, e-health, blockchains, IOT or Artificial Intelligence and GreenTech.
India can contribute to the World with great minds, but also a natural capacity to think out of the box and to create disruptive technologies at a competitive cost (through Jugaad or Frugal Innovation).
As a conclusion of this white paper, we would like to share some key recommendations for anyone willing to explore the Indian Innovation Ecosystem:
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Be patient Find and work with the right Partners Invest in your Employees Be Creative The first impression will never be the final one Creation and Innovation can happen anywhere (even in a train station
in Bangalore: https://workbenchprojects.com) Yes can mean No, No can mean Yes, Maybe can mean Yes and No Be focused and persistent India is the size of EU, a country of 1,3 Billion people, with +20 official
languages and +1000 dialects; Be patient!
At the end of the road, you will be amazed by what can be achieved in India. Business France and its partners are here to help you quick start your activities in this wonderful country!
“I have always been bullish about India’s potential. I still am, and I feel India is a country that really has an enormous amount of potential and has the human capital to succeed.” - Ratan Tata
SOURCESCONTRIBUTORS
ABOUT BUSINESS FRANCE
Business France is the national agency supporting the international development of the French economy, under the French Ministry of Economy and Finance and the Ministry of Foreign Affairs.
It is responsible of fostering export growth of French businesses, as well as promoting and facilitating international investment in France. Bu-siness France has 1,500 employees in 124 countries in the world.
In India, Business France’s key mission is to promote trade relations between France and India by assisting French companies seeking potential partners and new markets in India as well as helping Indian businesses identify potential French suppliers, commercial and technical partners.
Business France India has 4 offices located in the business hubs of Delhi, Mumbai, Bengaluru and Chennai and a dedicated multicultural team of 35 experts in the following sectors:
• Agrofood Industry• Industry and Cleantech• Lifestyle and Healthcare• Technology, Innovation & Services
Technology, Innovation and Services Department
M. Jean-François AMBROSIOHead of Department (from 2017 to 08.2020)Bangalore-Chennaijean-franç[email protected]
Mme Anne DESSEMONDHead of Department (starting at 09.2020)[email protected]
M. Udayan ROYTrade Advisor – Telecoms, Electronics, IOT [email protected]
Mme Leena RADJIBALYTrade Officer – RetailTech, Cybersecurity, IOTNew [email protected]
Mme Rifka DAVIDTrade Advisor – FinTech, Franchise, E-commerce
Mumbai [email protected]
Mme Kamala GOVINDARAJAN Trade Advisor – EdTech, Cultural Industry
Chennai [email protected]
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For further information, please visit: www.businessfrance.fr
Business France 77, boulevard Saint-Jacques
75680 Paris Cedex 14Tél. : +33 1 40 73 30 00
Bureau Business France de New Delhi2/50 E, Shantipath, Chanakyapuri, New Delhi 110 021Tél. : +91 11 43 19 61 00 - Fax : +91 11 43 19 63 09
Bureau Business France de BombayWockhardt Towers - East Wing, Bandra-Kurla Complex, Bandra East, Mumbai 400 051
Tél. : +91 22 66 69 40 00 - Fax: +91 22 66 69 40 90
Bureau Business France de Bangalore21, Palace Road, Bengaluru 560 052
Tél. : +91 80 22 14 12 00 - Fax : +91 80 22 14 12 01
Bureau Business France de ChennaiBannari Amman Towers - 6th Floor, 25 Dr Radha Krishna Salai, Chennai 600-004
Tél. : +91 44 28 22 63 63 - Fax : +91 44 28 22 64 64
