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Will Startups Drive the IoT Market in India?

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Businesses in India are at an early stage of understanding the impact of IoT technologies on their core business. Nevertheless, the increased activity in digitalization of businesses in India and worldwide has encouraged startup firms to focus on digital business and the IoT. Increased domestic demand, availability of highly skilled human capital and favorable government policies are spurring the growth of IoT oriented startups in India.

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The interconnection of embedded devices, including smart objects, is expected to usher in automation in nearly all fields thus enabling advanced applications like a Smart Grid. One of the most noteworthy areas to tap-in for IoT will be that of its application in smart homes, automobiles and wearable technology. If market reports are to be believed, at least two-thirds of Indian businesses will set up an Internet of Things (IoT) center of excellence to drive the adoption of efficiency-centric technologies and applications. The fact worth taking note of is that 50 percent of the predicted IoT solutions will originate from start-ups that are less than three years old. It is also expected that India will have five IoT startups with a billion-dollar valuation by 2018.

Further, a majority of firms believe that IoT solutions will be the most intentional technology that enterprises will choose for their organization in a decade’s time. Such organizations shall consider IoT as an upgraded customer experience by aiding components such as supply chain optimization and cost efficiencies.
More significantly, the Government of India has proposed to set aside $21 million for startups over a period of three years that amounts to 50% of the investment required for at least five projects each from categories that include smart cities, water, environment, health, waste management, agriculture, safety and supply chain.

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The above mentioned factors definitely look encouraging for the prospects of IoT in India. However, given the lack of dedicated firms in this domain, it is up to startups to shoulder the responsibility of taking IoT enabled products to the Indian consumer. The good news is that startups are waking up to this opportunity. A number of early stage IoT startups have already taken off in India. Recently, eight start-up companies from India including Exilant, Inventrom, Cariq, Altiux, Tagplug, Epsilon electronics, Cooey and Infozech were identified as the most innovative and successful in the IoT space based on a contest powered by UNICOM Learning in association with Intel and IBM.

Further, IBM has set up its innovation center in Bengaluru to partner with 100 big data and IoT startups in India. Moreover, the recent round of fundings has allowed startups to raise the necessary capital for their projects. This is another encouraging sign for the future of the IoT market. For instance, CarIQ Technologies recently secured funding from One97 Communications and Persistent Systems. In March 2014, RHLvision Technologies raised over $200,000 through Indiegogo. 2mpower Health Management Services recently received fundings from funding former Infosys’ execs T Mohandas Pai and Sharad Hegde. Connovate Technology raised more than $54,000 from Indiegogo crowd-funding platform. In April 2014, Ineda Systems secured $17 million in a Series B round of funding from Walden-Riverwood Ventures, Samsung Catalyst Fund, Qualcomm Ventures, IndusAge Partners and Imagination Technologies.

Smaller and innovative companies are taking advantage of low-cost electronics, traditional manufacturing and 3D printing tools, open and closed-source hardware and software to create IoT devices that improve processes and lives.
Start-ups are moving ahead with identifying numerous niche problems and innovating solutions using IoT concepts.They are expected to drive not only consumer and enterprise acceptance of the IoT but also the creative solutions that enterprises previously could not possibly discern.

This Blog is written by Anand Shanker, Sr Analyst with DART Consulting.

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