The Indian Startup Scene: 10 Young Companies That Are Worth Watching


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India is changing rapidly. The population is flooding online and numerous businesses are springing up to service them. Some will succeed and some will fail. But maybe
those who can conquer this fast expanding virtual India really can take on the world. We look at 10 promising companies across the country.

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The Indian Startup Scene: 10 Young Companies That Are Worth Watching

  1. 1. The Indian Startup Scene 10 Young Companies We Think Are Worth Watching India is changing rapidly. The population is flooding online and numerous businesses are springing up to service them. Some will succeed and some will fail. But maybe those who can conquer this fast expanding virtual India really can take on the world. We look at 10 promising companies across the country.
  2. 2. The Indian Startup Scene IDG Connect More continent than country, India ranges from the frozen summits of the Himalayas in the north to the verdant coconut groves of Kerala in the south. While the people that span this sprawling 1.3 million square mile land mass are just as varied. Now as this vast, disparate population moves online, hosts of companies are leaping forward to offer every service they need. These run from the eCommerce giants rising up to provide goods, to the tide of payment and delivery companies which make all this possible. They cover the new organisations that are helping to empower the previously disenfranchised. And they include innovative individuals who are spotting business and consumer gaps in the market and trying to plug them as fast as possible. For any commercial organisation, there is everything to play for, because those who can take on the complexities of India, may well be equipped to tackle the world. When social media marketing company, ViralMint, launched in 2011 the initial plan was to move out of India within seven months. Instead, the market acted like a funnel: eCommerce companies sprung up left, right and centre and a constant stream of new customers flowed in.“There is a lot happening in this space and there is a lot of innovation that goes on,”says CEO & Founder Rohan Dighe.“It is a great market, at least at this point in time.” Indian eCommerce is beginning to generate serious interest from wealthy bodies around the world. In February the Economic Times of India wrote: “For nearly a year now, some of the world’s most renowned investors have poured in big money to get a slice of the action in India, one of the fastest- growing markets for eCommerce.” VCCEdge, a deals tracker, has already recorded 10 transactions worth $288 million in the space within Q1 of this year. Yet William Pearce, who moved from the UK to India to launch a series of online businesses for German giant Rocket Internet, is cautious.“I think, fundamentally, the winners in Indian eCommerce at the top end are going to be the guys with the deepest pockets. There are a lot of set up costs and operating costs associated with servicing your audience – your logistics are expensive, your warehousing is expensive and the trouble is, it is not going to get cheaper.” “The reason it is not going to get cheaper,”he continues,“is that people are flooding online over the next five years and they’re all going to start shopping online. And they’re all going to start shopping at the absolute bottom end of the product range.” “They’re reluctant, they need to establish their trust and so when someone spends 500 rupees (8 USD) on your site you lose money on it. They have to shop three or four times before you make money and because there is so much competition they won’t do that because they’ll shop once on Jabong, once on Flipkart, once on SnapDeal…” Introduction Indian eCommerce I think fundamentally the winners in Indian eCommerce at the top end are going to be the guys with the deepest pockets. William Pearce“ Source: Assocham survey December 2013 2012 2013 2023 $8.5m $16m $56m eCommerce worth:
  3. 3. The Indian Startup Scene IDG Connect What Makes India Unique? The Times of India reported in November:“Internet penetration in the country may not have crossed 16% of the population yet, but in absolute numbers this percentage works out to nearly 10 times the population of Australia.”Based on findings from the Internet and Mobile Association of India, this provides a powerful indication of the potential of consumer growth to come. The lack of credit cards and bank accounts being used by consumers, especially in rural India, has proved a bit of a problem. Yet mobile phones are being used to push people into banking channels. “It is a quiet revolution happening,”says Aditya Mishra a co-Founder of Headstart .“I don’t think most people, even in India, realise how tech savvy these people are.”However, a piece in the New Yorker titled“Will bank accounts catch on in India?”took a slightly more sceptical view. The vogue at present is for“cash on delivery”which enables buyers to avoid paying online. And a large number of companies have appeared in the space to cater for the disconnect between offline and online commerce. PriceBaba, for example, allows individuals to compare prices of mobile phones online, so they can go on to purchase them in physical stores. “The buying behaviour in India is different from other countries,” explains Annkur P Agarwal, co-Founder at PriceBaba,“but has a lot in common with other emerging markets. What I saw during my stay in the US is that people go to physical stores and then look at how they can buy it cheaper online. What I’ve seen in India is that people look at a product online and then they want to figure out,‘how can I get this near me?’” At the other end of the spectrum there has been a clear rise in the number of online payment systems available, such as mobile wallet companies Y-Cash and Instamojo. Deepak Kanakaraju, who founded for example, gave Instamojo a glowing review on his site last October. This has been“a godsend for people like me who sell training programs online through internet and usually in small volumes.” Yet for many new businesses, the sheer size and disparity of the country makes India as much of a challenge as it is an opportunity.“If you look at some of the European countries,”says Amit Mehra, CEO of Reuters Market Light (RML),“they are smaller in population than some Indian states. When people ask what would be the challenge to take it to other parts of the world, I say it will be a language difference, a cultural difference, agro-climatic difference, but, guess what, this is exactly what we had to do when we moved from one state to two states in India.” If you look at some of the European countries - they are smaller in population than some Indian states. Amit Mehra “ The buying behaviour in India is different from other countries. Annkur P Agarwal “
  4. 4. The Indian Startup Scene IDG Connect Headstart is an organisation that runs events and talks across India to help build the startup ecosystem and since its inception in 2006/7 it has seen numerous positive developments. Aditya Mishra, the co-founder, lists them as follows: Firstly, the quality of startups has gone up. Secondly, the people he encounters have more real world experience, which makes their entrepreneurial ambitions more viable. Thirdly, there is now more media focus on the startup scene, which has placed a spotlight on entrepreneurship as a career path. Serial entrepreneur Ravi Jagannathan, MD & CEO of Y-Cash Software Solutions, who counts previous successes in eMudhra and Taxsmile, adds that outside of government intervention there has been a lot of change in the way growing organisations are supported: “[Whether] it is money related, or incubation centre related, infrastructure related, mentoring related, [there are now] so many services available within the system. Over the last few years there has been encouragement at the college level, encouragement from institutions, support available from investors and incubation centres. It is [all] very conducive for a startup to grow.” On the consumer side the growth in mobile and internet has seen the level of customer acceptance for startups grow. There has also been a lot more openness in terms of large companies partnering with startups. “Large companies [always] use their scale to their advantage,” says Mishra.“[But] in comparison to the UK or US, a large company here gets away with more than it might elsewhere. [And] while that has changed it has not changed enough.” “India is a lucrative market. More capital investment is around. However, it is at nowhere near the level it might be in other markets,”he adds.“Fundraising is still difficult in India compared to other parts of the world. But compared to what it was five years back it has become a lot easier.” Unfortunately, developments in the consumer space don’t necessarily translate to benefits in the business arena. “On the enterprise side, people are more open to looking at startups in terms of actually doing business there,”says Mishra.“[But] if I am running an IT enterprise technology startup I will find it easier to pitch it to an American CIO than to an Indian CIO. That continues to be a challenge.” Mishra feels this is because“an American CIO sees that [his/her] next wave of growth is going to come through technological innovation. But a large company in India knows that growth is going to come by expanding reach. So, if I am able to grow 30%/ 40% without doing anything innovative why do I need to do that?”In essence, technology is not seen as necessary expenditure because it has not been the same driver for growth as consumer spending. Mishra has no doubts that the startup scene will only become more advanced.“There are very smart people starting very smart things. Once that starts happening money will follow. Success is typically a combination of three things: opportunity, talent and capital. [Of course] I don’t expect the capital to change overnight; they will probably remain the same for the next year or two, but so many people with experience are starting interesting things, I expect a lot more interesting startups.” The State of the Indian Startup Scene If I am running an IT enterprise technology startup I will find it easier to pitch it to an American CIO than to an Indian CIO. That continues to be a challenge. Aditya Mishra “ There are very smart people starting very smart things. Once that starts happening money will follow. Aditya Mishra “
  5. 5. The Indian Startup Scene IDG Connect Many people believe the challenges faced by Indian companies make for long-term benefits elsewhere. “[We want to] start by cracking India,”says Arwal.“The idea is to catch a niche, dominate it, then expand around it. We’re still two years away from moving out of India.” “We see a lot of traction in Thailand, Singapore and after that Australia is a major place,”says ViralMint’s Rohan Dighe.“One of the main factors for growth is, when you enter a new market, not to stick to what people are doing globally. If you consider SaaS, everyone will tell you having a monthly subscription is the way to go and that is the only way you can do the billing. But, in some local businesses, flexibility is better. Adapting to the market really is the crux of the whole thing and that is what has worked in our favour.” “If you’re able to innovate despite the challenges, you are able to figure out something immensely replicable all over the world,”concludes Mishra.“One of the things we talk about is – if I can pull this off here in India – doing it in the rest of the world is going to be so much easier.” If I can pull this off here in India doing it in the rest of the world is going to be so much easier. Aditya Mishra“
  6. 6. The Indian Startup Scene IDG Connect 10 Indian Startups That Could Be Worth Watching Over the course of the past few months IDG Connect has been interviewing a wide variety of Indian startups in a cross-section of different fields. Some of these have been bootstrapped companies, some have been early-stage funding and some have been a lot more established. They include both B2B and B2C organisations. However, on one level or another, they all seem to tap into the new potential of online India. Below, listed in alphabetical order, are 10 that we think might be worth watching. Doctor Oxy Healthcare Solutions What it does: delivers an app which joins the dots between hospitals, doctors and patients. This means that health records and patient conditions can be managed holistically and therefore more effectively. Why it is interesting: similar applications are available in other countries, but the challenge with any health system is that it must tie in with the local market. Doctor Oxy is extremely India-specific and founder, Kamalesh Jayaraman, has a deep understanding of the issues concerned as his family are all doctors. The company has already spread from Namil Nadu, up through the southern states of India and is looking to advance further north. Read interview with Founder, Kamalesh Jayaraman Launched: Late 2012 Website: Formcept What it does: provides a unified analytics platform which takes data from multiple sources and presents it in a way that makes sense to the end user. Why it is interesting: there are a lot of companies competing in this arena but Suresh Srinivasan and his co-founder Anuj Kumar both have a strong Oracle background and received instant recognition for their idea from the Economic Times of India. Their differentiator occurs when the data is being sourced. This enables analytical modelling from any structured or unstructured information. Their plan is to validate the product in India then roll it out internationally. Read interview with co-Founder, Suresh Srinivasan Launched: Early 2013 Website:
  7. 7. The Indian Startup Scene IDG Connect Instamojo What it does: provides a simple to use, complete platform, which makes it possible for people to sell online by just sharing a link. Why it is interesting: Instamojo does not fit into any neat category. It is not a marketplace like eBay and it straddles a few different areas: on the one hand, a platform like Shopify could be competitor, yet on the other, so could a company like PayPal. What makes this valuable within an Indian context is that credit card usage is low, but it allows for a few different methods of payment and simplifies the process of selling to an online community. Read interview with co-Founder, Akash Ghani Launched: Mid 2013 Website: Pcloudy What it does: connects Android developers with a range of devices to test their apps in the cloud. Why it is interesting: the four co-founders met whilst working at Nokia in Bangalore. They all come from a developer and a testing background and wanted to produce something that would help the entire developer ecosystem. Android devices are ubiquitous across Asia and as more consumers move online, more apps are needed to meet local requirements. No other company within India is offering this service and it is especially valuable to the small companies and individuals which make up a large part of the growing developer community. Read interview with co-Founder, Nilesh Tarale Launched: Late 2013 Website:
  8. 8. The Indian Startup Scene IDG Connect PriceBaba What it does: offers online mobile phone price comparison for offline shops across six Indian cities. Why it is interesting: the buying behaviour in India is different from many other countries. This is because it is extremely tactile and price driven and there is a big vogue for cash on delivery as few people use credit cards. This means that whilst in the West people go to physical stores and then look to buy it cheaper online, India tends to work the other way round. PriceBaba began initially in Mumbai but has already expanded into five other cities. The next step is to move into different niche verticals, such as sunglasses and other coveted consumer goods, and keep on expanding outwards. Read interview with, co-Founder, Annkur P Agarwal Launched: Early 2012 Website: ProjectHeena What it does: offers a LinkedIn style network for people who want to give something back to society. This covers volunteering skills through to donating goods and aims to provide a two-way portal between NGOs and individuals. Why it is interesting: the CSR mandate in India now stipulates that organisations must give 2% of profits back to society. This puts the need for volunteering and other charity work firmly on the radar of many big companies. If this platform becomes a popular hub for this type of work it has the potential for rapid growth. This site aims to: facilitate feedback, allow people to search by relevant skill and fundamentally streamline the whole volunteering process for everyone concerned. Read interview with co-Founder, Himanshu Chanda: Launched: Mid 2013 Website:
  9. 9. The Indian Startup Scene IDG Connect RML What it does: mobile-led information service for rural farmers. Why it is interesting: this is an extremely different company from the others on the list. It initially launched through Reuters in 2007, is multi-award winning and already used as a business school case study. Yet it is the ultimate case book for an Indian company that suffers from all the inherent difficulties of the Indian market. In its recent phase of growth it has built a new communication portal to engage farmers, yet these individuals need to be spoken to by telephone in order to roll them into the system. The company aims to both address social problems and make money. Everything is in place to do so and if it succeeds in the near future it will have a real blueprint for other emerging countries around the globe. Read interview with Founder and CEO, Amit Mehra Launched: Went independent from Reuters mid 2013 Website: SrushtiSoft What it does: offers technological products for higher education institutions which cover the intersection between admin and academia. The most notable of these is Examinater which delivers a thesis tracking and evaluation system for postgraduate courses. Why it is interesting: at present there is online academia covered by teaching and examining systems. Then there are administrative problems which are tackled by various bespoke solutions. Yet these two different areas never meet. SrushtiSoft aims to bridge that gap with one single solution that can be applied to any university anywhere. The majority of its business comes from within India at the moment. But the plan is to popularise the product within India then roll it out internationally. Read interview with CEO and Founder, Pavan Gayakwad Launched: Mid 2012 Website:
  10. 10. The Indian Startup Scene IDG Connect ViralMint What it does: this is a social media marketing company that offers products rather than services. The aim is to replicate offline word-of-mouth marketing in the online space to help brands gain ROI from social media and drive sales. Why it is interesting: eCommerce has grown extremely quickly across India as great swathes of consumers have flooded online. This means that a string of other businesses have emerged in the slipstream. ViralMint offers a very Indian marketing service as it seeks to take advantage of the extremely social, price driven marketplace to give value to its clients. It thrives on flexibility and while other companies certainly occupy the space it does not have any exact competitors. Read interview with CEO & Founder Rohan Dighe Launched: Late 2011 Website: Wishberg What it does: creates a community where people can share their wishes. Why it is interesting: co-founder Pravin Jadhav used to work in advertising trying to second guess what people wanted until he decided to just ask them. The company is not making any money at the moment, but it is building a community where people share their wishes across the spectrum. These range from short term materialistic desires through to larger ambitions where other people on the site can provide advice on how to realise them. Read interview with co-Founder, Pravin Jadhav Launched: Late 2012 Website:
  11. 11. The Indian Startup Scene IDG Connect India is in a state of flux. The consumer population is moving online and needs to be catered for. Whilst the business community is looking to move away from a static, services model in order to become competitive. The startup scene is gradually emerging to fill the gap. Yet the ecosystem is still not advanced. It is much better than it was a few years ago, but it still has a long way to go to reach maturity. This makes getting a business off the ground yet another stepping stone in the many trials to conquering the Indian market. However, this a great big opportunity and those that are successful now, could do very well indeed in the years ahead. The companies we selected here are a tiny fraction of the hundreds of growing businesses that could have been included in the list. Yet the reason we chose them is they all offer something interesting and in their own individual ways, all seem to offer something uniquely Indian. These range from the answers to specifically Indian problems, to Indian answers to a general questions. On top of this, they all appear to have something which might make them successful in the future. There are 1.27 billion people in India. This is second only to China and not even 16% of the population is online yet. Maybe those companies that can tackle the unique challenges of this vast, varied region, really will be ready for anything? Conclusion IDG Connect is the demand generation division of International Data Group (IDG), the world’s largest technology media company. Established in 2005, it utilises access to 38 million business decision makers’ details to unite technology marketers with relevant targets from any country in the world. Committed to engaging a disparate global IT audience with truly localised messaging, IDG Connect also publishes market specific thought leadership papers on behalf of its clients, and produces research for B2B marketers worldwide. For more information visit: About IDG Connect