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India’s Startup Scenario – 2015

The trend of start-ups is really picking up in India and the scene is only expected to get much more competitive in the upcoming years owing to the large influx of online companies all over the country.
According to a report by Nasscom, India will be a hub for 11,500 tech startups by 2020. In fact, the collaborative research effort by NASSCOM and Zinnov suggests that Indian startups, with their unique solutions, are witnessing increased traction in global whitespace opportunities such as Internet of Things, augmented realty, smart hardware, Business Intelligence and many more. These findings definitely signal that India is gearing up to create a startup friendly platform for young tech based businesses where opportunities for growth are much larger than the challenges in the ecosystem. Below, we take a look at the various industries that have been the breeding ground for a dominant number of startups in India.

Beyond doubt, ecommerce startups are the ones that have triggered the startup culture in India and continue to drive the momentum for the growth of other startup ventures. In fact, the early part of 2015 has witnessed a great deal of growth and inflow of capital into e-commerce startups in India. For example, Snapdeal raised USD 627 million, Ola cabs raised over USD 1 billion in less than 2 years of span while Flipkart has raised USD 700 million. Further, e-commerce startups have rolled out multiple success stories and many more are expected to follow in the years to come.

M-commerce or Mobile commerce is slated to become the next big playing ground for startups after e-commerce. Driven by the increasing number of mobile internet users in India, the market size of M-commerce is expected to be USD 11 billion by the end of 2015. Remarkably, M-commerce startups have managed to taste success without even capitalizing on the strengths of the mobile network such as location access, camera, behavior, etc. MartMobi is one such M-commerce startup that was initially infused with seed capital from IIIT Hyderabad and later angel funded by BitChemy Ventures and Srini Koppolu, ex-Managing Director, Microsoft India Development Center. The one year old startup has now been acquired by Snapdeal.

It is now being assumed that M-commerce would take over the e-commerce platform in the next few years. With news of Flipkart shutting down its online portal to switch to a mobile platform doing the rounds, the likelihood of m-commerce taking over e-commerce does not seem like a far off possibility.

Communication apps such as Facebook’s messenger, WeChat, Whatsapp, hike messenger, Line, etc., are being widely used over mobile platforms such as Android and iOS. Whatsapp was bought by Facebook in 2014, which is just a simple example of how things are going for the instant mobile app market. Connecting the social media such as facebook, twitter, etc., with messaging apps will help industries to get better insights on the buying behaviors of Indian market effectively.

Mobile Marketing goes viral:
Mobile marketing has helped brands to re-engage with the customers efficiently by enabling them to target their customer base via handheld devices. It is an emerging market for Advertising Technology companies. The cost involved in user acquisition is expected to grow up due to the hunt for quality users. Consequently, mobile marketing apps will have huge opportunities to tap into as they allow firms to acquire users at lower costs. Capitalizing on these opportunities, startups are growing exponentially in this sector. ZipDial that was recently acquired by twitter is an instance of a hugely popular and successful India based mobile marketing startup.

On the Road Ahead:

Fund raising is crucial in ensuring that startups outweigh their competitors and enjoy a successful run in the market. In this regard, Indian startups are placed comfortably as the capital being invested in Indian startups is growing at an exponential rate. In fact, Indian startups are attracting more venture capitalists as compared to their US based counterparts.

Apart from helping firms to commence their ventures, the timely infusion of funds helps startups to scale up their existing businesses. For instance, SoftBank had invested in Ola cabs in October 2014. Within the beginning of 2015, Ola has grown over 4X in size with 60,000 cabs in over 52 cities. On the other hand, TaxiForSure has a significantly smaller fleet in about 37 cities.

Koramangala in Bangalore and Hiranandani Powai in Mumbai are developing thriving ecosystems for nurturing startups in India. Kormangala is a small neighborhood of Bangalore with several startup offices, co-working spaces and founders working out of coffee shops. Bangalore being the IT hub of India, its residents are the perfect early adopters — young, mobile and hungry for new products. Startups in Kormangala find it easy to gain user feedback, to hire talent from other tech companies and to find mentors in other successful organizations located nearby.
On the whole, the startup revolution in India will positively impact the GDP of the nation. There will be a boom in the Indian marketplace courtesy the e-commerce and m-commerce revolution sparked by startups. In the forthcoming years, the Indian economy and startups will forge a mutually beneficial bond. While India’s “emerging economy” status provides a favorable playground for startups, the growth of startups to the 11, 500 mark (as predicted by Nasscom) will drive a significant growth in the nation’s GDP.