Date
22 November 2017
Flipkart has raised US$4 billion this year, bringing its valuation to US$11.6 billion. Photo: Reuters
Flipkart has raised US$4 billion this year, bringing its valuation to US$11.6 billion. Photo: Reuters

Appetite for Indian tech startups shows sharp rebound

Indian tech startups are becoming the new favorite of investors from China and Japan. They are expected to raise more than US$10 billion this year, more than double last year’s US$4.4 billion.

Indian tech startups have raised US$7.9 billion from 1,129 deals in 2015, over half of which are from C-round, according to data from Tracxn. The number of deals has fallen to 763 this year, and 71 percent of the deals are for D-round or later stage.

That shows the Indian market has become more mature, and investors are no longer chasing growth blindly.

Instead, they tend to concentrate on a smaller number of startups engaged in e-commerce, ride-hailing, travel booking platforms etc.

For instance, e-commerce startup Flipkart has raised US$4 billion this year, including US$1.4 billion from Microsoft and eBay in April and US$2.5 billion from SoftBank in August. The company now has a valuation of over US$11.6 billion, which makes it one of the world’s most valuable e-commerce companies.

In fact, China’s internet giants like Tencent and Alibaba are also very active in seeking out promising tech startups in India.

Tencent has put a heavy bet on Flipkart, while Alibaba holds a majority stake of Paytm. No only are they investors, they also bring to the table their own e-commerce experience in China.

Some noted that since India’s per capita GDP is just a quarter that of China, and there is a huge income gap between urban and rural population in India, the China experience cannot be replicated in India.

This article appeared in the Hong Kong Economic Journal on Nov. 1

Translation by Julie Zhu

[Chinese version 中文版]

– Contact us at english@hkej.com

RT/RA

Hong Kong Economic Journal

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