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]
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