Investing in Indian Startups - A Sign of Success?

Well, I was born in India and living here in this beautiful country; I have realized that it is a land of treasures. If you are good at seeking your requirements, I am sure that you will find a way to fulfill it here. People living here have a very different essence, they work hard, they go beyond limits to fulfill requirements and their dedication will surely win your heart.

India is transforming and developing at a bullet-speed, transforming its economy, the Industrial sector, manufacturing sector, retail sector, and the public sector.

Each day, a new startup is established that sets a new standard and shakes the foundation of the business and the established practices. It is true that not all startups indeed become a success but a few become the leader in their domain. There are countless examples of such startups that now have multi-billion dollar evaluation. Flipkart, Myntra, Ola, Oyo, Paytm, etc are few startups that are now kings in their respective domain.

The success stories of global startups are well documented but stories of Indian startups are often missed out. Indian startups are also having a huge range of profits. There are more than 10 startups in India over 1 billion valuations started in just the last 5 years. The investors of these companies would have made huge returns like 10 times to 1000 times of their original investment. Companies like Redbus, Taxi for Sure and Free Charge where investors have full exits while companies like ola, Flipkart and Oyo have partial exits.

There are billions of demands in the world and yes, some will be fulfilled by the existing companies and these are where innovative opportunities need to be created. Many companies are not hardcore technology companies but ones that have leveraged technology to innovate or grow a particular market by bringing digitally oriented services and products to a rising group of elite Indians. India will become the third-largest consumer market in the world behind the USA and China by 2025.

The most note-taking thing is 16% of the Indian population is earning over 10 lakhs, this section of the population is increasing rapidly, this will generate demands for several new goods and services. These requirements will be fulfilled by the existing companies while there is also a huge potential for startups across India to build disruptive business to capture this market.

Apart from the Indian consumer growth story, there is also a huge opportunity for Indian Software companies to build SAAS products which can be used by Indians and overseas. These companies can leverage the availability of technically qualified people to India at a much lower cost. Indian SAAS companies will capture 8% of the global SMB SAAS market by 2025.

The most important aspect and reason to invest in Indian startups is that it has potential in the areas of AI, ML, IoT, and Robotics which could bring out winners. Affordable technologies that also leverage technically qualified people and focus on solving real-life problems can only build successful companies. From the last few years, 10 such companies have been acquired by the global giants and their number will increase as India will become more integrated.

Moreover, today we can see a number of successful companies that were once just a startup but the main thing to be noted that none of them were public companies. The public market does not access to startups investment and only angel networks, venture funds and a few PE funds who specialize in the startup sectors get such companies.

Most of the above opportunities will be in the startup sector and the investor who is good and can identify winners at an early stage will be rewarded hugely as some of them are likely to become a successful and giant company. The tricky part is to find the right company with the right idea to invest. One can decide to invest by focusing on the sector where one has proper domain knowledge that may lead to the right company and decision. The other way is to join a professionally managed angel network that has a mix of analysts and investors with a diverse skill set to find the right company. I always consider the above points while investing, let me if you have any other consideration.

Thanks for reading!!