With social distancing becoming the new way of life, an increasing number of consumers are shopping online and even those that had preferred to make electronics purchases offline are now left with no option. According to Counterpoint Research’s latest report, the shift in the consumer behaviour resulted in online channels accounting for 43% share of the Indian smartphone market in the quarter ending June 2020.

The report also found out that Amazon surpassed Flipkart with a share of 47% in all online sales, while Flipkart had a 42% share. The INR 15K – INR 20K price segment contributed the most and reached its highest ever share on Amazon. Flipkart ruled the roost when it comes to the sub-INR 10K price category cornering over half of the market in the quarter.

The report forecasts online channels will remain strong in 2020 in light of the retail slowdown by many companies. Plus much of the offline market has been dominated by Chinese brands, which have suffered an image beating in recent months. Online sales are expected to have a 45% share in the Indian smartphone market in 2020 going ahead, much higher than previous years. “Covid-19 pandemic had a huge impact on the overall smartphone market with April being a washout month. Online channel shipments also declined compared to the last year. However, due to the current circumstances, consumers are preferring online platforms,” said Prachir Singh, senior research analyst, Counterpoint.

The report added that pre-Covid level shipments of smartphones were being witnessed by the end of the second quarter 2020 due to the pent-up demand after the lockdown.

Brands Realign Strategies To Drive Sales

The pandemic had a huge impact on the current market scenario and innovative business models have emerged, the report said.

“Bands are aligning their product as well as channel strategies to drive up volumes, and multiple financing options and attractive offers have made the devices more affordable for consumers. During the quarter, multiple brands adopted an online-to-offline (O2O) business model and hyperlocal delivery to help their offline channel partners,” added Counterpoint’s Singh.

For instance, Samsung was quite aggressive on online channels and increased its share to 25%, its highest ever share in online channels. Strong shipments of M-series smartphones led to this increase. OnePlus also drove the shipments in the online premium smartphone segment, capturing more than 50% share, followed by Apple with a 25% share, the report said. Realme remained the top brand on Flipkart

It also found that Xiaomi remained the market leader in online channels with 44 per cent market share and due to the preference for online channels, no offline-exclusive model was launched during the quarter. However, during the same period, 11 online-exclusive SKUs were launched.

The post Amazon Outpaces Flipkart As Online Sales Revive Smartphone Demand In Q2 appeared first on Inc42 Media.

Travel and hospitality SaaS startup RateGain is looking to raise close to $15 Mn from Avataar Venture Partners. 

According to the Ministry of Corporate Affairs filings accessed by Inc42, the company may issue 21,269 cumulative convertible preference shares (CCPS) at $235.08 per share to Avataar Venture Partners I, aggregating to a total of nearly $4.99 Mn in the first tranche. In the second tranche, the company is looking to issue a further 42,539 CCPS at the same rate to the same fund, amounting to around $9.99 Mn. The filings said that the funds would help the company in its expansion plans. 

Launched last year by Norwest Venture Partners India, Mohan Kumar and Freshworks former COO Nishant Rao, Bengaluru-headquartered Avataar Venture Partners invests in growth-stage B2B and SaaS startups. 

Pay Cuts & Furloughs

The proposed fundraise from Avataar Venture Partners comes four months after RateGain had initiated pay cuts and furloughs for several employees due to the financial crisis caused by the Covid-19 pandemic and the resultant lockdown, which severely impacted the travel industry. 

The pay cuts and furloughs were confirmed by RateGain in a statement to Inc42. The company said that the major brunt of the pay cuts was borne by the management team, which had apparently taken 50%-100% pay cuts.

RateGain’s Solutions For Travel & Hospitality Companies

Founded in 2004 by Bhanu Chopra, RateGain offers a SaaS product targetted at travel and hospitality companies to help them streamline operations and sales. The startup enables these businesses to determine the right pricing for their products based on the demand, the current market rates and more to help hotels and booking agents maximise revenue. It also helps hospitality businesses reach more customers by increasing the distribution points by syndicating booking across platforms and provides companies marketing insights from various social media channels to boost conversions.

RateGain influences pricing decisions based on what competitors or other hotels in the vicinity are charging. It also provides hotels information on what people are saying about their property or concept online. It breaks down market rate, OTA ranks and pricing strategy into logical insights. And finally, once the pricing is set, RateGain’s distribution partners bring the hotel products to online ticketing platforms. Prior to this round, the company had raised $50 Mn in 2015 from TA Associates and was valued at INR 1,000 Cr. In the last few years, RateGain has acquired two startups — US-based DHISCO and BCV.

Last year, the company appointed Harmeet Singh as its new CEO, while Bhanu Chopra was elevated as Chairman.

Considering that pandemic brought the travel and hospitality industry to a standstill, RateGain had said that most of its customers, competitors and suppliers were in survival mode from March onwards. The hospitality brands and OTAs associated with RateGain include Leela Hotels, Makemytrip, OYO, RedDoorz, Lufthansa, Finnair Holidays and Bangkok Airways, among others. In October last year, RateGain had claimed a robust growth of 60% y-o-y in terms of the annual revenue and said it was on track to cross $100 Mn in revenue for 2020. 

The post Exclusive: Travel SaaS Startup RateGain Is Raising $15 Mn From Avataar Venture Partners appeared first on Inc42 Media.

Ecommerce giant Amazon has launched an online pharmacy service named ‘Amazon Pharmacy’ marking its entry in the epharmacy segment. 

The online pharmacy will be piloted in Bengaluru first. The company may introduce the service in other cities later. 

The launch of ‘Amazon Pharmacy’ comes just as the Covid-19 pandemic and the resultant lockdown has altered consumer behaviour, leading many to opt for the purchase of medicines through epharmacies such as 1mg, NetMeds, Medlife and PharmEasy, among others. 

Between 2014 to 2019, out of the total $2 Bn invested in Indian healthtech startups, 22.4% (462 Mn out of $2 Bn) was poured into online pharmacy startups such as Medlife, 1Mg, Pharmeasy and Netmeds, who are also the top players in the sector, according to ‘India’s Healthtech Landscape In A Post-Covid-19 World’ report by DataLabs by Inc42+. The data reveals that online pharmacies have received the most amount of investments among all the healthtech offerings, ranging from teleconsultations to health and fitness apps. This has made them the safest bet for healthtech investors in India, despite a confusing regulatory scenario and lobby groups of traditional offline chemists protesting against the heavy discounts on medicines being given on epharmacies. 

Other data points mentioned in the report highlight that app-based features and availability of stock were the two most dominant elements for customers of online pharmacies. However, online pharmacies performed poorly when judged against parameters of staff behaviour, customer care service and return policies.

Online pharmacies witnessed significant adoption after they were declared an essential service during the lockdown. 

With the country facing a shortage of hospital beds for those afflicted with the novel coronavirus, there were pleas made by the government, urging Covid-19 patients with mild to moderate symptoms to self-isolate themselves at their residences. Home delivery of medicines through online pharmacies assumed all the more importance this year due to the pandemic. 

The same was confirmed by 1mg CEO Prashant Tandon in an ‘Ask Me Anything’ session with Inc42 back in April. 

“Patients have started to realise a lot of value in healthtech. Patients now realise that they don’t have to expose themselves to undue risk if healthcare can come directly to them,” Tandon had said.

Lately, Amazon is diversifying its India business. In May, the company introduced its food delivery service Amazon Food, also being piloted in Bengaluru. A recent report indicated that Amazon’s entry in the food delivery segment could severely impact the revenues of existing players in the segment such as Zomato and Swiggy. The company is also making significant investments in its retail arm, which handles the delivery of groceries and other essentials through Amazon Pantry. On August 6-7, Amazon witnessed sales worth $600 Mn for its Prime Day sale.

With existing logistical infrastructure across the country and financial resources at its disposal, it is to be expected that Amazon could challenge the existing players in the online pharmacies segment.

The post Amazon Launches Medicine Delivery: Bitter Pill For 1mg, NetMeds & Medlife? appeared first on Inc42 Media.

China’s Huawei and ZTE will be kept out of India’s plans to roll out its 5G network. Sources told Bloomberg on condition of anonymity that the Ministry of Communications will restart pending discussions on approvals for 5G trials by Indian private companies including Bharti Airtel, Reliance Jio Infocomm and Vodafone Idea that were delayed by the nationwide lockdown.

India’s move is in congruence with the decision taken by the US, UK and Australia, which have expressed concerns about companies with Chinese government links. The US Federal Communications Commission had gone a step ahead and even officially declared both companies as national security threats.

The latest development is set to spill the process to auction 5G into next year in India. According to officials a decision on the ban is expected to be announced in a week or two after approval from the Prime Minister’s office.

Though the government had allowed Huawei to participate in its 5G trials earlier this year, its stance against Chinese companies hardened after China’s actions along their disputed border in early May. That military standoff, which turned deadly in June killing 20 Indian soldiers and an unknown number of Chinese troops, is now in its fourth month.

Big Opportunity For Reliance

The likely ouster of Chinese majors from 5G play could act as a big push for Reliance Jio, which plans to build its own 5G software stack and embrace Open-RAN techniques. This will also help it save up on hefty premium payouts to existing 4G networks supplier, Samsung. The Mukesh Ambani-led telco’s pact with Qualcomm Inc would also help it roll out advanced 5G infrastructure and services.

Last month, Reliance Industries Limited (RIL) and Reliance Jio Platforms raised INR 730 Cr from California-based venture capital firm Qualcomm Ventures, the investment wing of Qualcomm, the world’s leading mobile chipset and modem maker.

During the Reliance 43rd AGM last month, Mukesh Ambani said that the company’s subsidiary Jio Platforms had developed a complete 5G technology, which would enable the company to launch a ‘Made in India’ 5G solution. Ambani said that the company’s 5G solution would be ready for trial once the country’s 5G auctions begin. Ambani claimed that existing Jio users would be able to upgrade their existing 4G networks to 5G, also saying that a successful trial of the technology in India would allow the company to export the technology.

Ambani said that Jio’s homegrown 5G solution was dedicated to PM Modi’s ‘Aatma Nirbhar Bharat’. He further outlined Jio Platforms’ vision, of developing original, captive, intellectual property, to demonstrate the power of technology.

Qualcomm is also keen to accelerate the transition of India from 4G to 5G network, in an interview with ET, Qualcomm head Cristiano Amon that the company will ensure that it can deliver 5G services to all the price points and make it more affordable.

The post Big Opportunity For Reliance Jio As Huawei, ZTE May Be Booted From 5G Trials appeared first on Inc42 Media.

The Indian government has released the source code for its contact tracing app Aarogya Setu’s iOS version, after two months of releasing the code for android. The open-source code is available on the government’s own open-source platform OpenForge. 

However, the government is yet to release the server-side code of the app which has been constantly requested by developers and data privacy activists. Server-side code will help them understand how the stored data is processed at the backend. Since its launch, Aarogya Setu has been under heavy scrutiny from developers and security experts for multitude of reasons. 

According to TOI, a security audit firm, Cyber Firm has said that the user data on Aarogya setu is “running on a significant risk of theft and abuse”. In a blog post (which has now been taken down), Yash Kadakia, founder of ShadowMap and Security Brigade CTO reportedly said that “the company managed to get access into Aarogya Setu and discovered the source code for the entire platform, including backend infrastructure.”

In response to the blog, the government reportedly sent an official statement saying that the Security Brigade has misused its engagement with the Aarogya Setu code review. “Publishing an article on the issues that the firm got to know as part of the code review violates basic principles of ethics … it is a complete breach of trust,” the statement added.

MIT Technology Review, a magazine owned by the prestigious Massachusetts Institute of Technology, has also downgraded Aarogya Setu app on the parameters of “data minimisation” which means the app is collecting more data than needed for the app to work.

The report ranked 25 individual, significant automated contact tracing efforts globally on five factors — voluntary or mandatory usage, usage for public health purposes only or law enforcement, provision for deleting the data within a reasonable amount of time, data collection and transparency.  The current ranking of Aarogya Setu on these factors is 1 out of 5, according to MIT Technology Review. 

In May, French ethical hacker Robert Baptiste, who goes by the name Elliot Alderson on Twitter, found a flaw in the Aarogya Setu. According to Baptiste, anyone with the right technical know-how can find out the Covid-19 status of a given area by exploiting a flaw that allows users to set a location within the Aarogya Setu application.

Using the flaw, Alderson was able to find that five people each in the Prime Minister’s Office (PMO) and defence ministry who had reported that they were feeling unwell today (May 6). In response, the government has denied any security issues in the app, which was developed in a public-private partnership.

The post Govt Releases Aarogya Setu iOS Source Code, Security Concerns Continue To Rise appeared first on Inc42 Media.

The All India Online Vendors Association (AIOVA), which claims to represent the interests of more than 2,000 sellers, has written a letter to the Reserve Bank of India (RBI) over the non-payment of dues by Chinese ecommerce platform Club Factory. 

In its complaint, AIOVA has alleged that by suspending the payments to sellers, Club Factory is in violation of Section 28 of the Payments and Settlements Act, 2007, as it has withheld payments to sellers for more than a month after the products were delivered to the customers. 

“Thousands of small sellers whose dues are in lakhs of rupees (are) pending to be cleared. The total dues amount to crores of rupees,” AIOVA said in its complaint, copies of which were accessed by the Economic Times. “…if Club Factory is allowed to withdraw money from this escrow account, small sellers and their families will be put to irreparable loss.”

Club Factory Suspends Payment To Sellers

Last month, Club Factory — one among the 59 Chinese apps banned by India on June 29 due to data privacy concerns — suspended payments to sellers. In a letter to the sellers, a copy of which was accessed by Inc42, Club Factory wrote that since the government’s ban was unforeseen, it constituted a ‘force majeure’ event, temporarily freeing both parties from their obligations as per their contract. 

“We wish to intimate you of the force majeure event (the banning of the Club Factory app by the government of India) and accordingly, the suspension of settlement with sellers during the continuation of the force majeure event, as well as to inform you that we are taking all possible steps to get the ban revoked, however, given that this is a government action, the period for which such ban may be extended is presently unknown,” Club Factory’s letter to its sellers read. 

In its complaint filed with the RBI, AIOVA has alleged that Club Factory had withdrawn money from the escrow bank account meant for merchant’s dues, and asked the central bank to seize Club Factory’s bank accounts. 

“Thousands of small sellers whose dues are in lakhs of rupees (are) pending to be cleared. The total dues amount to crores of rupees,” AIOVA said in its recent complaint. “…if Club Factory is allowed to withdraw money from this escrow account, small sellers and their families will be put to irreparable loss.”

It was not possible to ascertain the exact amount of pending dues with Club Factory. However, last month, Inc42 spoke to Amit Singh Sengar, who used to sell personal care items on Club Factory. According to Sengar, the amount is likely to run into crores of rupees, since Club Factory has been withholding payments since the lockdown opened. Sengar himself has INR 1,56,000 in pending dues with Club Factory.

Club Factory’s Past Troubles

This is not the first time that Club Factory has come under the scanner. In December last year, the ecommerce store — founded in 2014 by Chinese company Jiayun Data Technology and headquartered in Hangzhou, Zhejiang, China — was accused by a customer of selling counterfeit products. The customer alleged that the company had advertised heavy discounts on popular brands but shipped fake products to the customers. 

Club Factory has also been accused of misusing the provision which allowed duty-free imports of gifts and samples as long as they were below INR 5000. Club Factory, along with other Chinese ecommerce platforms such as Shein, would label their orders as gifts, avoiding any custom duties on it. To avoid any more exploitation of the provision, the central board of indirect taxes and customs (CBIC), in November 2019, decided to remove it.

The post Sellers Association Knocks At RBI Doors Over Non-Payment Of Dues By Club Factory appeared first on Inc42 Media.

Ecommerce industry associations have sought another 6-7 months extension from the government to comply with the new consumer protection rules. The mandatory listing of ‘country of origin’ for products listed on ecommerce websites is one of the main rules to be followed. Other key provisions include the appointment of grievance offers and resolution of consumer complaints within one month of receiving the complaint, among other such provisions. 

The Consumer Protection (Ecommerce) Rules, 2020, were notified on July 23 and came into effect immediately. The Rules are applicable to all goods and services, bought or sold over digital or electronic networks, including digital products. As such, even companies providing internet services such as online ticketing and hotel booking, are defined as ecommerce entities and subject to the new rules. 

Reportedly, the Federation of Indian Chambers of Commerce and Industry (FICC) wrote to the Ministry of Consumer Affairs earlier this month, asking for six to seven months time for complying with the new rules. 

“Some of these requirements will put undue stress on MSME sellers who already have their backs up against the wall due to excessive compliances that come with selling online,” a senior executive at an e-commerce firm told Economic Times. 

The new rules also apply to overseas-based ecommerce entities supplying goods and services to Indian customers.

Last month, the DPIIT had proposed August 1 as the deadline for etailers to display ‘country of origin’ information for all products being retailed on their website. In response, ecommerce companies Amazon and Flipkart sought more time, saying that a hastened deadline would harm small sellers, who may be unsure about ways of complying with the new rules. Later in the same month, Amazon, in a letter to its sellers, asked them to provide ‘country of origin’ information for products by August 10. 

According to the new consumer protection rules for etailers, failure to abide by them would attract penalties as per the recently ratified Consumer Protection Act (CPA), 2019. 

The CPA mandates every ecommerce entity to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment and grievance redressal mechanism, among other things to enable the consumer to make an informed decision. Further, the Act also calls upon ecommerce entities to provide ‘country of origin’ information for all products. The ‘country of origin’ clause has attracted a lot of attention in the wake of anti-China sentiment in the country and the resultant call to reduce dependency on imports.

There is some confusion regarding the timeline for the implementation of the ‘country of origin’ provision in the new rules. “DPIIT conducted stakeholder participation in early July 2020 and the proposed timeline indicated by DPIIT to the participant brands/platforms for displaying ‘country of origin’ was August 1, 2020 (for any new products/items) and October 1, 2020 (for any legacy products/items) however, the Ecommerce Rules do not clarify this,” Kaushalya Venkataraman, partner, Chandhiok & Mahajan Advocates and Solicitors told Inc42. 

The post Ecommerce Companies Want Six Month Extension To Comply With ‘Country Of Origin’ Rule appeared first on Inc42 Media.

Back in 2014, India had just over 233 Mn internet users in a population just shy of 1.3 Bn, with a lowly penetration rate of under 20%. But with its focus on technology and boosting India’s digital economy, the new government which was formed in 2014, set out to change this. 

In September 2014, Prime Minister Narendra Modi launched one of the flagship projects ‘Make In India’ among a host of other initiatives to build the digital economy. By July 2015, the launch of Digital India signalled India’s intention of becoming a global tech superpower. 

While Make In India was devised to transform India into a global design and manufacturing hub from an import-centric consumer market, the Digital India programme was about reviving infrastructure projects and bring a measure of digitisation in every aspect of life — from finance to education to commerce and governance. Together, Digital India and Make In India served as a powerful call to action for Indian innovators, citizens and business leaders. And just as importantly, it was an invitation to potential partners and investors around the world that India was ready to become more than just a massive consumer market. 

Changing The Game For Tech Startups

One of the major indicators of digital transformation in India is the rise in the number of internet subscribers in India. From around 233 Mn in 2014, India today has over 504 Mn active internet users. Much of the credit for this goes to the launch of Reliance Jio, which completely changed the telecom and mobile internet game in 2016. As of July 2020, TRAI reported 676 Mn broadband subscribers in India, including both wireless and wireline connections. Further, India has over 1.14 Bn mobile subscribers, out of which 629 Mn are based in urban areas.

According to Mary Meeker’s 2019 Internet Trends Report, the global internet user base has touched 3.8 Bn which is more than half of the world’s population. Of these, India has around 12% of the share. As a result of increased smartphone and mobile internet penetration, Indian startups have also been targeting their efforts to bring the so-called next billion consumers under the digital fold.  

A key part of the non-mobile push has come from BharatNet, which initially aimed to connect 2.5 Lakh gram panchayats with high-speed internet. Till now (August 2020), 1.42 Lakh Gram Panchayats are connected with optical fiber.

One of the major objectives of Digital India was to bridge the massive digital divide between urban and rural India. While we are still many years from reaching parity, some of the initiatives taken by the government towards this goal include Aadhaar enrollment, Jan Dhan Yojana, and Common Service Centres (CSC) centers among others. Of course, the role of the private sector companies such as Reliance Jio, Google, Facebook and smartphone brands such as Xiaomi cannot be ignored in this context.

Between 2014 to July 2019, over 3 Lakh CSCs were set up across the country, according to Ravi Shankar Prasad. These CSCs are said to have built digital literacy among 1.5 Cr. Indians and provided employment to 12 Lakh youth. However, an official publication in June 2019 noted that more than 11K gram panchayats do not have access to CSCs, so while the journey from 2014 onwards has been fruitful in many ways, there is a long way to go, something which was highlighted during the early days of the lockdown when many struggled to get online for their school lessons and remote work. 

Why Local Manufacturing Is Closely Linked To Digital India Dream

Another key pillar in India’s digital economy growth has been the fact that Indians have shown tremendous appetite for smartphones and mobile devices. Exactly a year ago, India emerged as the fastest growing smartphone market in the world, while in January 2020, India surpassed the US to become second largest smartphone market in the world. 

But getting there has been a combination of smartphone makers focussing sharply on the Indian market — not only in terms of new devices but also in electronics manufacturing. Approved in February 2020, the National Policy on Electronics 2019 (NPE 2019) is expected to carry forward the momentum that India has shown in electronics manufacturing. With China being sidelined for a slew of reasons — including the pandemic — India has emerged as the next major destination for electronics manufacturers and the government has placed emphasis on Indian becoming an exports hub in this regard. The NPE 2019 aims to achieve a turnover of $400 Bn by 2025 in Electronics System Design and Manufacturing (ESDM). 

As per the World Bank, in 2018 the manufacturing sector contributed only 15% to India’s total annual GDP, compared to China’s 29% and Bangladesh’s 18%. The policy aims to change this with targeted production of 1 Bn mobile handsets by 2025, valued at $190 Bn, including 600 Mn mobile handsets valued at $110 Bn for export.

According to Datalabs by Inc42, manufacturing and industrial SaaS solutions as well as deeptech products and services will play a pivotal role in advancing the “Make In India” mission seeing as automation and digitisation are key to increasing the overall productivity in manufacturing. Increasing the contribution of the manufacturing sector to the overall Indian GDP should be a major point of action for the government and businesses, as this will directly contribute to digital growth as well. With more and more electronics and parts being manufactured in India, India will get first access to these technologies as has been the case with China for over two decades. 

In addition to SMBs in manufacturing, clean energy is another key focus area for Make in India. The Department for Promotion of Industry and Internal Trade (DPIIT) has recently proposed entering into FTAs (free trade agreements) and mining agreement with Latin America and Africa, which are resource-rich countries, particularly lithium and cobalt, which are used for making batteries that constitute close to 40% of electric vehicle cost. With these strategic trade agreements, the cost of the vehicles in the near future is expected to come down, thereby giving a push to the adoption of electric vehicles in the country.

With this, India aims to explore trade deals with countries that support the ‘Aatmanirbhar Bharat’ vision, thereby providing necessary raw materials, critical components and equipment required to support local manufacturing.

The Various Pieces In The Digital India

Of course, digital economy is not just built around devices that can connect to the Internet at little to no cost. The economy is propped by digital products and services, which is where startups have emerged as the biggest advocate of Digital India. Key sectors such as education, banking & finance, B2B trade and commerce, governance and delivery of essential services, agriculture and others have been transformed by a mix of startup innovation backed by policy push. 

Over the years, the Indian MHRD ministry has launched online learning and communication technology initiatives. This includes a massive open online courses platform SWAYAM, national digital library, virtual labs, and more. The more recent National Education Policy 2020 seeks a complete overhaul of the education sector and is expected to finally bring Indian colleges and schools to the 21st century standards maintained by many Western economies. 

However, the unequal access to digital infrastructure has restricted how many students can access many of these online resources. According to the 59th review report of the National Digital Literacy Mission (NDLM), around 16 Cr rural households in India do not have access to computers. Also, a nationwide survey of villages conducted by the ministry of rural development in 2017-18, showed that only 47% of Indian households received electricity for more than 12 hours a day.

Internet connectivity is even a challenge for tech startups in certain states such as Goa. Mangirish Salelkar, Goa Technology Association told Inc42, that internet connectivity is a major issue in the state, with cheapest internet providers selling broadband plans for INR 8K-10K for six months till last year. To prioritise connectivity and bandwidth for the facilities and organisations in the frontline for the Covid-19 pandemic, Indian telcos and internet providers decided to reallocate resources to certain key areas, which stretched internet connectivity thin in certain areas of the country. 

Perhaps, the most important piece of the Digital India puzzle is India Stack, which is essentially just a collection of open APIs, but it has revolutionised Indian banking and fintech startups. With Aadhaar as its foundational layer, India Stack combined eKYC or digital identity, Aadhaar-enabled payments system, the unified payments interface (UPI) and account aggregator.

Starting with Aadhaar in 2009, India Stack has been fast bridging the gap between Tier 1 India and Tier 2, Tier 3 cities. India Stack, along with Jan Dhan Yojana bank accounts, has been instrumental in bringing digital banking to the many remote parts of India. Thanks to the eKYC and Aadhaar, a slew of fintech companies have found footing in India.  

However, the picture is not all rosy, many fintech companies have noted that the fintech regulations in India continue to change every few months making it a somewhat tumultuous business environment. The RBI’s regulatory sandbox may alleviate some of these challenges in the next few years, but there’s still something to be done about the spate of Aadhaar-related data leaks from government bodies, which has soured some of the progress made so far. 

The next agenda for India is the National Health Stack, which seeks to transform healthcare just as India stack did for fintech. Will structured data with consent layers baked into it allow the National Health Stack finally bring India’s ailing healthcare infrastructure up to date with the times? 

How Covid-19 Widened The Digital India & Make In India Vision

Covid-19 has been the ultimate test of all digital systems and infrastructure. While systems like online education and digital payments were already popular sectors when the pandemic hit, other sectors like telemedicine and digital entertainment came to the fore as the nationwide-lockdown was instituted in the country. 

Following the pandemic and movement restrictions across the country, hospitals started utilising  ‘e-Sanjeevani OPD’ to offer the audio-visual facility for regular patients and senior citizens to consult with doctors and avoid the hospital. Nationwide lockdown also came as a boon for many telemedicine startups who had been facing regulatory uncertainty for the past four years. 

“We have had a lot of regulatory questions for a long time now, suddenly we found ourselves becoming an essential service. That was a big regulatory change for the industry,” said 1mg’s founder Prashant Tandon.  

The rising number of patients has also highlighted the need to improve the capacity of ventilators and respiratory aids in Indian hospitals. Seeing the urgent need, Indian startups across sectors also joined in the race to develop low-cost ventilators to save the COVID-19 patients. Along with them, Industry experts like Mahindra, Maruti Suzuki and more have also been helping the tech startups scale their manufacturing operations, which is a key part of Make In India. 

Hardware startups contributing to India’s effort against Covid-19 include Noida-based AgVa Healthcare which developed a toaster-sized low-cost ventilator, weighing only 3.5 Kg. Similarly, Bengaluru-based Biodesign Innovation Labs is developing a portable ventilator called RespirAid for less-critical patients, which is ideal for stabilising a patient during a respiratory arrest. All of these are being made in India and contribute to the digital healthcare penetration greatly. 

Further, robotics solutions built by Indian startups have supported the public healthcare infrastructure as well. Robots are sharing the workload of frontline staff battling Covid-19 in India. From disinfecting zones, dispensing hand sanitisers to monitoring patients and also serving meals and medicines — more and more hospitals are deploying automated solutions for these tasks. 

These startups include Kerala Startup Mission-backed Asimov Robotics, Gurugram-based Milagrow HumanTech, Invento Robotics, PerSapien and more.

Perhaps the most controversial part of India’s fight against Covid-19 was the Aargoya Setu app. Launched in April 2020, Aarogya Setu is the government’s contact tracing solution. It is said to have garnered 15 Cr downloads till now (August 2020). However, its mandatory usage and privacy concerns have also been raised by many as well as its potential use for mass surveillance.

In the past couple of months, the focus has fallen on Indian software products. Perhaps the biggest acknowledgment of India’s digital ambitions came with the ban on over 100 Chinese apps, which brought the digital economy into the geopolitical battle. The Chinese app ban was followed by Modi’s clarion call for Vocal for Local and Atmanirbhar Bharat, which has flooded the India app ecosystem with hundreds of new apps in a matter of months. Interestingly, most of these apps have noted their ‘Made In India’ tag as the differentiating factor in the market. While so far the focus has been on manufacturing goods and products in India, the new wave of Indian apps is perhaps the best example of how Make in India and Digital India are interconnected. 

The post #StartupIndia: How ‘Digital India’ And ‘Make In India’ Power India’s Tech Juggernaut appeared first on Inc42 Media.

Prime Minister Narendra Modi’s clarion call for ‘Vocal For Local’ along with the recent ban on over 100 Chinese apps has fueled startups and developers to build India-first apps, products, and companies. 

But what does it take to engineer a product for Bharat? How does the user experience change in the Indian context? 

To answer these and many more such questions, we are happy to announce the launch of our first online summit —  The Product Summit in association with The Product Folks, a volunteer-driven community of product managers and enthusiasts. 

With the world going through a digital transformation and the government urging startups and companies to help in holding the fort, we think it’s time to break ground and bring together top minds driving the current product wave in India to share their wisdom and experiences with the product community.

The summit will host speakers such as Zerodha’s cofounder Nithin Kamath, Fusioncharts’ Pallav Nadhani, Whitehat Jr Founder Karan Bajaj, Former CXO Times Internet Miten Sampat, BigBasket’s Director of Products Tejas Vyas, and Partner at Lightspeed Ventures Harsha Kumar, among others. 

Register Now!

Scheduled for October 10, 2020, the daylong online conference will bring together the top minds driving the current product wave in India to share their wisdom and experiences with 3,000 product leaders & makers. 

The summit will delve into topics like how to build a growth mindset, what it takes to engineer hypergrowth in a diverse market like India, why growth is not a division but a mindset and organisational frameworks for product teams to achieve 10x growth and more. 

The Critical Links In Product Development

Our first panel discussion will focus on bringing an insider’s perspective on finding and measuring the product-market fit. This is of course the key factor for startups and founders and product managers rush to get this right. Some would even argue that the success or failure of a product is dependent on how soon one can identify the right product-market fit (PMF). Count on this session to address questions like what steps can a company take to get the PMF faster, the possibility of multiple PMFs, the right metrics/parameters to measure the efficacy of the chosen product-market fit, and more. 

As product makers all over the world will tell you, the DNA of any product can only be understood after paring it down to the core functionality. In that spirit, we will host a one-of-a-kind workshop that will walk us through the entire user journey of one of the most highly successful products ever made for Bharat. 

The People Behind Tech Products

But ultimately, no matter how well a product is designed and how well the product fits the current market, the final differentiator for the success of a company will always be defined by the team behind it. There’s definitely a lot of discussion around engineering a high growth product, but what’s the secret to engineering a product team with a growth mindset? What are some factors that can help companies to inculcate this growth culture in their teams?

Our sessions will dive into detailed insights and experiences from the panelists’ journey of building some of the successful product-growth cultures across different types of product teams right from the prototypes to the pre-product stage to post-PMF.

Register Now!

The Product Summit: Building For Bharat

And while on the topic of people in a successful product team, we also have to talk about the most important stakeholders in the process — customers. They have the final say on everything that goes behind the development of a product and hence, it is important to tailor the customer experience according to their needs. 

Moving on to the B2B products, the final session of The Product Summit will focus on building for new digital SMBs in India. India has 120 Mn – 130 Mn citizens depending on small retail, from about 50Mn – 60 Mn small retail shops.

The pandemic has brought a ton of disruption for small-medium businesses (SMBs). For one, millions of SMBs are expected to go online in the coming months to sustain their business and find a way to earn more revenue through various online distribution channels for both B2B and B2C products.

So, if you are building an India-first business or are interested in the process of building high growth products, register now to attend the India’s first-ever virtual summit with a focus on high growth products for India and from India. 

Register Now!

The post Announcing The Product Summit: India’s First And Largest Virtual Product Conference appeared first on Inc42 Media.

“Where the mind is without fear and the head is held high

Where knowledge is free

Where the world has not been broken up into fragments

By narrow domestic walls

Where words come out from the depth of truth

Where tireless striving stretches its arms towards perfection

Where the clear stream of reason has not lost its way

Into the dreary desert sand of dead habit

Where the mind is led forward by thee

Into ever-widening thought and action

Into that heaven of freedom, my Father, let my country awake.”

~ Rabindranath Tagore

August 15 — it is a monumental day for all of us and the same holds true for startups too. On this very day, in 2015, Prime Minister Narendra Modi coined one of his many popular slogans — ‘Startup India, Standup India’. In the past five years, this slogan has gone on to become the beacon for one of India’s most successful government-backed projects — Startup India.

Launched in January 2016, the scheme came with a slew of policy reforms such as funding support, bilateral government collaborations with various countries, and a consistent messaging of hope and pride in Indian tech. Some of the prominent promises of Startup India included state level startup policies, pro bono services (like free credits to access cloud services, legal and banking support), learning and development programmes and building a spirit of entrepreneurship. 

“I attended the inspirational launch of Startup India in Delhi. I experienced it in practice in the form of the Atal Tinkering Lab (ATL) and Atal Incubation Centre at Sikkim Manipal University. Startup India project is definitely making a positive impact on the lives of thousands of youngsters through the incubation program,” Abhishek Rungta, President of TiE Kolkata, told Inc42.

Kickstarting The Startup Dream

While Startup India was not the beginning of startups in India, it is certainly the most coordinated effort in India to boost startups. But it’s still a work in progress. As Rungta pointed out, many startups in West Bengal and other states have not been able to see much impact of these policies, but that’s just due to the disparity in implementation at times. 

The real value of Startup India can be seen in how it transformed the image of startups among the younger generation. AI-based cancer diagnosis startup NIRAMAI cofounder and CEO Dr. Geetha Manjunath believes so too. 

“We have seen a remarkable change in the way startups are perceived by society. I think it is a huge change in the mindset of people from all walks of life. Today, startup representation can be seen in every discussion. This huge change has primarily been made possible because of the national and state-level emphasise on the importance of startups,” she told Inc42. 

Similarly, Rajat Jain, founder of Sunfox Technologies, said that before Startup India, there were hardly three to four startups in his home state of Uttarakhand. Since the state government started offering seed capital to startups in coordination with Startup India, entrepreneurship became a viable opportunity for many innovators in the state. 

According to Ramesh Loganathan, professor at IIIT Hyderabad and former chief of Telangana State Innovation Cell, the immediate tangible benefits may have been limited, but he believes the programme did help rally around and better organise the whole startup ecosystem.

Between 2016 and August 2020, Startup India recognised over 34.8K startups. Among these, 8.3K startups received intellectual property rights (IPR) fee benefits, while over 2.6 Lakh people enrolled in the entrepreneurship-focused learning courses offered by upGrad and Startup India. Further, over $1 Mn worth benefits were given to 5.5K startups as part of over 150 startup innovation programmes and challenges organised by Startup India. 

Among the many promises under Startup India, the government pledged to set up a fund of funds for startups, pooling together funds from various foreign institutional investors as well as alternative investment funds (AIF). Till date, over INR 3,123 Cr has been committed by the government to 47 venture capital firms and INR 3,476 Cr has already been invested in 323 startups from the fund of funds corpus managed by Startup India through Invest India. 

In Feb 2020, India was ranked 63 among 190 countries on ease of doing business rankings by the World Bank, as compared to 142 rank of India in 2015. According to the World Bank, the three main reasons for this jump in ranking were India’s reduced cost of starting a business, better access to building permits and electronic submission of documents for import and export audits.

The government’s consistent efforts to make business regulations easier for startups have definitely shown results but still there are areas where startups continue to struggle. For instance, Rungta noted that there should be tax rebates on angel investment the way the UK and several other countries provide. “This is needed, so that angel investments are encouraged in the country. Angel investments are a high-risk category and should be promoted more aggressively,” he added.

Angel tax is an income tax levied on the funding received by unlisted startups by issuing shares at a price higher than the fair market price. Over the years, many startups have raised concerns over the classification of funding as income and investment. In August 2019, the finance minister exempted DPIIT-registered startups from the angel tax requirement. However, those not registered continue to come under its purview.

The Startup Story In Digital India

Even though Startup India has been the flagbearer for the startup ecosystem in India, without enabling initiatives such as Digital India and Make in India, the reach of startup products and services would be severely limited. Together, this troika has set Indian on a path to a digital future. 

While Make In India was devised to transform India into a global design and manufacturing hub from an import-centric consumer market, the Digital India programme was about reviving infrastructure projects and bringing a measure of digitisation in every aspect of life — from finance to education to commerce and governance.

Together, Digital India and Make In India served as a powerful call to action for Indian innovators, citizens and business leaders. And just as importantly, it was an invitation to potential partners and investors around the world that India was ready to become more than just a massive consumer market. 

From around 233 Mn in 2014, India today has over 504 Mn active internet users. Much of the credit for this goes to the launch of Reliance Jio, which completely changed the telecom and mobile internet game in 2016. As of July 2020, TRAI reported 676 Mn broadband subscribers in India, including both wireless and wireline connections.

Another pillar in India’s digital economy growth has been the fact that Indians have shown tremendous appetite for smartphones and mobile devices. Exactly a year ago, India emerged as the fastest growing smartphone market in the world, while in January 2020, India surpassed the US to become second largest smartphone market in the world. 

Though it is undeniable that we have come far from where we started, the vast digital divide in India is still a lingering concern. Aside from remote villages and towns, internet connectivity has even posed a challenge for tech startups in states such as Goa. 

With China being sidelined for a slew of reasons — including the pandemic — India has emerged as the next major destination for electronics manufacturers and the government has placed emphasis on Indian becoming an exports hub in this regard. So the opportunity is there for the taking, will the infra gaps be filled in time to get the best of the timing? 

That’s a question, we at Inc42 will constantly strive to answer in everything we do. And honestly, we want each one of our loyal readers to be a part of this journey. With that hope in our mind, we are offering the Inc42+ membership at a 50% discount today — see you on the other side of the paywall. 

Making India Enterprising 

In addition to building the basic internet infrastructure, India’s efforts towards digital payments have been a prime highlight of the overall Digital India push. India Stack, which is essentially just a collection of open APIs, has revolutionised Indian banking and fintech startups. 

Starting with Aadhaar in 2009, India Stack has been fast bridging the gap between Tier 1 India and Tier 2, Tier 3 cities. India Stack, along with Jan Dhan Yojana bank accounts, has been instrumental in bringing digital banking to the many remote parts of India. Thanks to the eKYC and Aadhaar, a slew of fintech companies have found footing in India.  

However, the picture is not all rosy, many fintech companies have noted that the fintech regulations in India continue to change every few months making it a somewhat tumultuous business environment. 

In the past couple of months, the focus has fallen on Indian software products. Perhaps the biggest acknowledgment of India’s digital ambitions came with the ban on over 100 Chinese apps, which brought the digital economy into the geopolitical battle. 

The Chinese app ban was followed by Modi’s clarion call for Vocal for Local and Atmanirbhar Bharat, which has flooded the Indian market with hundreds of new homegrown apps in a matter of months. Interestingly, most of these apps have noted their ‘Made In India’ tag as the differentiating factor in the market. While so far the focus has been on manufacturing goods and products in India, the new wave of Indian apps is perhaps the best example of how Make in India and Digital India are interconnected.

Where The Head Is Held High 

After Microsoft and Twitter, Reliance Jio Platforms is said to be lining up to acquire a piece of TikTok’s business in India, which could turn around ByteDance’s fortunes in the country. 

While discussions between the companies are said to have begun in late July, ByteDance has been looking for a way out of the Indian government ban to re-enter the Indian market. It has frozen hiring and is said to be reviewing some senior management roles in India. 

With over 2,000 employees, ByteDance runs a massive ship in India with offices in Bengaluru, Delhi NCR and Hyderabad as well as several partner companies. Many of its employees are either quitting their positions or looking to exit to join rivals such as Mitron, Chingari, Bolo Indya and others.

Meanwhile, Indian aerospace startup Skyroot Aerospace has successfully test-fired an upper-stage rocket engine, which is the third and fourth stage of a traditional multi-stage rocket, fired at high altitude and designed to operate with little or no atmospheric pressure. Skyroot has thus become the first Indian private company to demonstrate the capability of building an indigenous rocket engine. 

Back on earth, the Niti Aayog has been commissioned to develop a network of banks and fintech companies who could give small-ticket loans to bottom-of-the-pyramid borrowers such as farmers, street vendors and labourers. Will this increase access to credit with fintech startups such as PhonePe, Kissht and Pine Labs working alongside Niti Aayog?

Where Tireless Striving Stretches Towards Perfection

Perfection is the name of the game when it comes to product design at hundreds of new-age D2C brands in India. The direct to consumer revolution has shown that entrepreneurs in India are not just great at ideation and maximising resources, but they are also getting hands-on when it comes to product design and development from the first stage till the last. 

The pandemic has become a catalyst for many brands to go the D2C way and open online stores and for existing brands to scale up beyond metros. For D2C brands with a focus on expanding to Tier 2, 3 cities, the reinvigorated call for Vocal for Local has created a readymade audience. D2C brands are quickly jumping on to vernacular content for marketing as well as videos with social media influencers to reach a wider audience.

And while most D2C brands are more or less using the same marketing strategies to reach their audience, one major differentiator is product design. D2C brands have invested heavily in building agile consumer insights teams that connect with customers and inform the journey of product development. 

“Our new product development (NPD) team has a clear DNA of taking customer insights and marrying it to innovation and bringing it to the shelf. The NPD team has a clear KPI of ensuring that at least 70% of our products are ‘first time in India’ and created specifically for the Indian women’s needs,” Smita Baishakhia, head of new product development, MyGlamm, told Inc42. 

Check out the Inc42+ Playbook on India’s D2C Rush to get the full lowdown on this burgeoning segment and the future of Indian retail, being driven by real innovators all over the country. For anyone hopeful about India’s economic future, the D2C sector is something that should fill our hearts with hope.

And with that thought and the dream of a self-sufficient and progressive India, we wish all our readers a very happy Independence Day. May our aspirations take us far. 

Yatti Soni & The Inc42 Team

The post The Outline By Inc42+: The Rise Of A Startup Nation appeared first on Inc42 Media.

In today’s thriving digital economy, the relationship between brands and consumers is fast-changing personal, resulting in the emergence of direct-to-consumer or D2C brands that are fast taking over the market. With a majority of bigger brands are stuck in a moat of profits, and their ability to think out of the box, innovate, D2C brands are swooping in and forming direct, meaningful relationships with their customers. This is again something that large companies need to reprioritise in their operations and while they are busy safeguarding the larger chunk of the market share, D2C brands are forging stronger bonds with consumers. 

While a majority of established brands are expanding into the D2C segment with their native ecommerce platforms, majority of sales, however, continue through wholesale and retail partners. For example, recently, FMCG major Marico acquired a 55% stake in Ahmedabad-based men’s grooming startup Beardo, which is an online-first brand essentially sells beard oils, beard waxes, soaps and other products, in addition to the 45% stake that it had acquired in 2017. 

Even as big conglomerates such as Tata focus on online selling through the recent infusion of INR 231 Cr in its online marketplace CLiQ, D2C brands are looking at more interesting ways of acquiring customers. Mumbai-based D2C brand MyGlamm acquiring Delhi-based women-focused digital media and ecommerce platform POPxo to penetrate the market through content and community approach. D2C brands are trying every trick in the book to beat the big brands. 

D2C Startups Vs FMCG Heavyweights 

The new generation of D2C startups are upping the ante and perhaps no other category typifies this as much as personal care segment, where men’s grooming startups are forging new identities, while women and baby-focussed products are capitalising on the D2C wave to outpace some of the traditional heavyweights in this space. 

The women hygiene, baby and personal care giants such as Johnson & Johnson, Himalaya, Hindustan Unilever, ITC, Lakme and others that have dominated the Indian market for decades are being put under the sword by startups such as Mamaearth, BabyChakra, The Moms Co, FirstCry, Bey Bee, Azah, Nua, Pee Safe among others. The women-focussed brigade of D2C brands is banking on unique branding, customer relationship building and social media engagement to stand out among the mass-market products. 

With the support of ecommerce marketplaces such as Amazon, Flipkart, Snapdeal, Nykaa and Paytm Mall, women-focussed D2C brands are not only focussing on their native platforms but also on discovery and delivery through established networks to penetrate deeper into the market. Backed by logistics providers, ecommerce enablers, product design know-how and more, D2C women brands are changing the game. 

Azah cofounder Shashwat Diesh told Inc42 that it currently caters to more than 50K customers across the country, where 60-70% of the sales happen on its website, and 40-30% on other ecommerce sites like Amazon, Nykaa and Flipkart. In the last few months, Azah has touched INR 32-35 Lakh in sales per month, claimed the founder. 

Similarly, Delhi-based The Moms Co also told Inc42 that it has seen great growth in Tier 2 markets, serving close to 1 Mn customers with 2 Lakh orders per month. Mamaearth, which introduced 12 new products focussing on immunity and resilience, has set a target of INR 1000 Cr in annual revenue rate by 2023. 

Until a few years ago, being a successful FMCG company meant having a strong distribution network presence in at least one or two million stores across the county. But ecommerce democratisation has completely disrupted the need for presence in physical stores. “We started out small, and there was no way we could compete with the giants and their massive distribution. We decided to leverage a D2C model to be able to sell a product that’s high quality, affordable and innovative,” claimed Mamaearth founder Varun Alagh. 

The Gurugram-based D2C startup claims to offer safe, mum-baby friendly, toxin-free products for millennial parents and also meets international safety standards. “Our main differentiation, and our biggest advantage, against these big multinational players is that we are Asia’s first brand with MADE SAFE certified products,” the founder added. 

Azah, a Delhi-based women hygiene and personal care startup, also told Inc42 that it is focusing on delivering high-quality products to women, and provide rashfree, chemical-free and organic sanitary pads, unlike some of the mass-produced sanitary napkins competitors in the space. 

Throwing light on the same, Azah’s cofounder Diesh said that most women in India have accepted rashes are ‘normal’ when using sanitary pads. The products that were developed for a generation in the 70s & 80s, which shifted from cloth to sanitary pads and uses harmful chemicals and plastics in the process of mass production, have been used by consumers for a very long time now, and there hasn’t been much innovation in that front, and now, the mindset of people is slowly shifting, where they are starting to realise that rashes are not normal, he added. 

Nua, another new age women-centric D2C brand, which offers a similar line of products as Azah, says it believes in creating an experience and not just a product. Founder Ravi Ramachandran said that trust is crucial in this sector, and providing a holistic experience to customers helps the brand in building more trust. 

Women Hygiene Products To Baby Care, The Ideation Of D2C Brands 

According to GlobeNewswire, the global women hygiene products market is expected to reach $32.7 Bn by 2027, from $22.7 Bn in 2020, growing at a compound annual growth rate (CAGR) of 5.3%. Out of this, menstrual care products are projected to grow at a CAGR of 5.5%, reaching $24.8 Bn by 2027. 

“Obviously, we can not understand the whole aspect of it, as we do not go through a menstrual cycle. But, through our extensive research, feedback from customers and consulting with doctors, we found out about the rash issue,” said Azah’s Diesh, emphasising on how the company’s product is directly linked to women and how it takes customer feedback seriously. In fact, the idea of starting Azah came about when Diesh happened to overhear the conversation between his mother and sister, who were complaining about sanitary pad-linked rashes.

Along with ex-Ola, Snapdeal employees and avid entrepreneurs Aqib Mohammad, Diesh founded the company in November 2018 which has received backing from backed by Titan Capital, the investment vehicle for Snapdeal cofounders Kunal Bahl and Rohit Bansal, AngelList India and other angel investors. 

“Initially, we were lucky to have those kind of women in our ecosystem, who were very receptive and didn’t shy away from answering our queries, be it our family, friends and their wives,” Diesh recalled about breaking the stereotypes and challenging the taboos associated with menstruation in Indian society. 

When it comes to baby personal care space, the global market is expected to reach $8.2 Bn by 2026, growing at a CAGR of 7.5%, as reported by businesswire. The report further stated that the birth rates in developing countries have risen, consumer awareness of child hygiene has increased, consumer availability has increased, and changes in lifestyle is said to fuel the market growth. 

“We are a generation of Google parents. Every choice that we make for our children, right from feeding bottles, shampoos to the paediatrician, we thoroughly research before making a decision. The parents are becoming much more informed about the brands, products and their specific ingredients. After many rounds of qualitative research with millennial parents, we realised that there is a big gap in the demand and supply for toxin-free baby care products,” said Mamaearth founder Alagh. 

In a country where most of the baby products available were not safe due to the lack of safety regulations, natural products which are safe by international standards have seen massive adoption. The same is true for the men’s grooming category as well in the post-Covid market.

Azah claims its products are MADE SAFE certified, which is tested to be free from all harmful chemicals by Safe Cosmetics Australia. The pads are packed in biodegradable disposable bags for eco-friendly disposal purposes, along with providing free doorstep delivery on orders. 

For Mamaearth, the biggest challenge was to find manufacturing partners, who were ready to work with its specified set of ingredients. All the ingredients and raw material used have to be certified as being toxin-free and naturally sourced. 

“We did not give up until we found the perfect partners — people who were catering to export markets and had strong ISO, WHO, and JNB certifications already. Not only did we find the right partners, but they also built some incredible relationships with them,” said the founder. 

[With inputs from Shanthi S]

The post How India’s Women-Focussed D2C Brands Are Leveraging Product Innovation To Challenge FMCG Majors appeared first on Inc42 Media.

We keep hearing “customer is the king” but rarely actually listen to her. Listening should not end with merely collecting feedback. It is even more important to understand the real “pain point” of the customer. Just hearing the customer and doing what they ask, is a very bad way of solutioning and serving the customer. Product designers must probe deep underlying pain points of customers and come up with the most optimal solutions for a common pain point.

In a service-led model, the customer is the one who is creating and financing the product. The service provider is more into execution with little interest to innovate or productize.

In a product methodology, there is no client to begin with. You are the creator, early user and financier of the product. At Xoxoday, we have learnt over time and iterated with various methodologies, but this golden rule has worked very well for us. It is also important to understand who the stakeholders are and who are the final decision-makers in each step. A democratic decision-making leads to delays, poor ownership and directionless product design.

Start With Why

Every feature in the product is costly in terms of time and opportunity cost. Whenever taking one feature for production, there is some other feature which gets delayed. Hence, very thoughtful planning on feature prioritization is very important. The fundamental for any model starts with Why.

Plan The What

Once the Why is established, the planning for What is easier. In this step, the product and design teams should collaborate to define the nuts and bolts of the feature. It’s important to define the problem statement very clearly. A problem well stated is a problem well solved. It’s always important that the problem is directly heard from the source rather than through various layers of people leading to Chinese whispers and distorted problem statements.

Plan The How

This step is about executing the What. In this step, the technology teams should plan the execution of the features as defined in process 2. The How decisions should lie with the product and engineering teams together.

Identify The Who

Once the problem statement and the approach to a solution are stated, its time to identify the right person or team to execute it. The right combination of the team with the right skills for the problem and solution is important for optimal results. The Who decisions should lie with the engineering teams.

Plan The When

The deadlines are easy to predict when the first four steps are clear. Most of the times, project timelines are wrongly estimated due to lack of clarity in the first four steps. One should never jump to this step unless there is proper detailing of each of the other four steps. The When decisions should lie with the engineering teams.

This article is most relevant for software products. However, these learnings can be relevant to other industries too.

The post Did Henry Ford Say Faster Horses? appeared first on Inc42 Media.

On July 7, Paytm announced its move to acquire Raheja QBE Insurance on July 6 for INR 568 Cr  (i.e. $76.1 Mn). Although this deal is pending regulatory approval; it marks a shift away from Paytm’s previous strategy of acting as an insurance distributor (which seemed to be reinforced by the fact they got a brokerage licence in March 20).

Paytm is no stranger to insurance; the arrival of UPI and subsequent pressure on payments fees (e.g. MDR) has led it to look beyond payments to alternative services to capitalize on its existing user base of ~150M MAU and ~15M merchants.

Whilst you may have heard the clarion call “What is Paytm’s business model?” – honestly, I don’t know but I can share my view on why they’d want to acquire a general insurance carrier. The graphic below summarizes my take:

In my personal view, owning an insurance carrier (especially in India), allows a company to innovate on the product side of insurance. We’re seeing early signs of this via the IRDAI’s InsurTech sandbox which is pioneering credit insurance, wearable-linked health insurance, “pay-as-you-drive” motor insurance amongst other products.

However, all of the above is in “pilot” mode; below, I will share 3 areas where I feel owning an insurance carrier can benefit Paytm:

Lifestyle Insurance Via Paytm First

Paytm First is analogous to an Amazon Prime-style play of bundling “value-add services” for Paytm users into a single subscription fee; more notable amongst their partners is GOQii. The wellness provider currently has 4 wearable-linked health insurance products in the IRDAI’s InsurTech sandbox (it’s fair to call them the “default provider” of hardware + wellness + content in the context of health insurance in India).

The obvious play, in my mind, for Paytm First is to offer a wearable-linked health insurance product. Whilst GOQii could provide the hardware + content + wellness; Raheja QBE could underwrite the risk i.e. Paytm can build a “closed-loop ecosystem” for health insurance (Vijay Shekhar, Founder of Paytm, is an investor in GOQii)

However, that’s not all – Paytm First, together with CitiBank, offers a Visa-branded credit card. In the UK, Vitality has an AMEX card offering with cashbacks linked to physical activity (i.e. insurance + credit + health in one offering).

By owning Raheja QBE, Paytm could offer health insurance (via Raheja QBE) + credit (via Paytm First card) + wellness (via GOQii) + via a single Paytm First offering.

Motor Insurance Via Paytm Payments Bank

Paytm Payment Bank has issued ~4M FASTags as of March ‘20. 

(FASTag is a sticker placed on windscreens for automated toll payments via an interoperable framework)

Via its Payment Bank, Paytm knows which of its users are car owners and moreover – it can triangulate usage of a vehicle (especially if petrol refills are made via Paytm).

“Pay as you drive” motor insurance is being piloted in the IRDA sandbox. Amongst all payment apps/FinTechs in India, Paytm is currently the best placed to up-sell pay-as-you-drive motor insurance.

1. It can segment its driver base – “weekend drivers” can be targeted with a pay-as-you-drive product (by positioning it as savings on insurance).
2. FASTag creates a natural engagement point for Paytm with drivers; it can push its own insurance products via behavioural nudges towards purchasing/renewing motor insurance

As previously mentioned, owning Raheja QBE will provide Paytm complete control over the user journey (insurance + payments for motor vehicles).

Ecommerce Focused Insurance

Ecommerce insurance (e.g. goods-in-transit, credit and white-label goods insurance) is yet to take off in a material way unlike China – which has seen ZhongAn emerge as a “star” player reaching $2bn in premiums within 7 years! In the Indian context, this opportunity is best highlighted by Amazon’s investment into Acko.

Paytm’s ecommerce ventures can be split into:

• Paytm Mall (ecommerce marketplace) ~ 100K sellers.
• Paytm for Business (O2O2O commerce via Kirana & PoS stores) ~ 15M merchants

Insurance products for MSMEs are yet to fully evolve in India:

• Credit insurance is just being tested in the sandbox.
• IRDAI has recently launched a standard Fire & Allied Perils insurance product for MSMEs. This product was typically reserved for larger enterprises i.e. small store owners and shopkeepers can seek insurance cover against fire, theft & other damage via a “white-label” product.
• The “every Kirana store is an InsurTech company” theme is emerging via StoreKing & other pioneers (who have begun to appreciate the PoS model in insurance)

MSME insurance is a greenfield for Paytm – together with Paytm’s merchant data and the fact that no incumbent has access to historic claims data, Raheja QBE would have a clear edge here.

The Weird – Broker & Insurer?

At first glance, people wondered whether owning a broker & a carrier makes any sense. This isn’t the first time I’ve seen a play like this – in Germany, WeFox (technology provider for insurance brokers) acquired digital insurance carrier ONE.

Effectively, owning a brokerage platform & your own insurance carrier creates a self-reinforcing product loop (i.e. discover gaps in the market and “learn” from other carriers).

That being said, Paytm would have to be careful about how it conducts business (other carriers might become suspicious) and there are certain regulatory aspects (which I will avoid).

The last point I want to make: Paytm’s cap table has strong insurance pedigree – it can tap into expertise when required.

Closing Thoughts

This deal is (as of July 12) pending regulatory approval. Paytm doesn’t have a shortage of capital to run its own insurance carrier (with a $1bn infusion) and has broad distribution (~15 Mn merchants and ~150 Mn monthly active users) – the perfect ingredients for success as an insurance company.

Owing a carrier (given Paytm’s capital position) permits innovation on the product side of insurance (i.e. credit insurance, wearable-linked health insurance & “pay-as-you-drive” motor insurance) which is tricky to achieve as a broker (“skin-in-the-game” matters!)

In February 2018, Paytm registered “Paytm Life Insurance” & “Paytm General Insurance”; it has been a long journey since – can Raheja QBE become Paytm General Insurance? Only time will tell.

Disclaimer

Views expressed in this article are my own and do not represent those of Accenture, its management, its employees or its affiliates.

This article does not constitute investment or any other form advice. The author bears no responsibility in the event of financial or other loss arising from actions taken by the reader or any related party on the basis of information represented in this article. The author does not have any financial interest in any firm mentioned in the article above; this article is produced for educational purposes.

The post Paytm And Insurance: A Tryst With Destiny appeared first on Inc42 Media.

We bring to you the latest edition of movers and shakers of the week in the Indian startup ecosystem.

After the ban on Chinese apps, particularly TikTok, which had a strong user base in India, the company has halted hiring and is looking to review some senior management roles. This temporary set back has come as a blessing in disguise for Indian short-video apps.

ByteDance, the parent company of TikTok, which had over 2K employees in India with offices in Bengaluru, Delhi NCR and Hyderabad, now looks deserted as many of its employees are either quitting their positions or looking to move to Indian TikTok alternatives, including Bolo Indya, InMobi-owned Roposo, 3one4 Capital-backed Mitron, Chingari, Gaana HotShots, Trell and ShareChat’s Moj among others.

Varun Sexena, CEO of Bolo Indya told Inc42 that it has received over 70 applications so far from people working in TikTok and Helo across positions such as language leads, community leaders and content moderators.

Here’s a look at the other important movers and shakers of the week:

Accolite Appoints Arjun Malhotra

Texas and Mumbai-based tech services company Accolite recently appointed Arjun Malhotra as the chairman to its advisory board. Prior to this, Malhotra, has served as the chairman of Headstrong (acquired by Genpact in May 2011), TechSpan (merged with Headstrong in October 2003) among other leadership positions.

Malhotra’s career launched in 1975, when he cofounded and grew the HCL Group from a mere ‘six-person’ team to one of India’s largest IT corporations. He was among the first Indian entrepreneurs to relocate to the US, where he took over HCL’s US operations (now known as HCL Technologies) in 1989 and led its expansion to nearly $100 Mn in annual revenue.

Accolite offers IT services to several Fortune 500 customers across BFSI, healthcare, telecom and others. Today, the company has grown to more than 1300 associates distributed across geographies, and since its inception in 2007, it has serviced close to 100+ customers.

MoneyTap Appoints Renaud Laplanche

Bengaluru-based fintech startup MoneyTap recently appointed Renaud Laplanche, cofounder and CEO of Upgrade, to its board of advisors. With 25+ years of professional experience, Laplanche, a San Francisco based serial entrepreneur, who has started several highly successful companies including matchPoint (acquired by Oracle), LendingClub (IPO), and most recently, Upgrade, Inc. reached $100 Mn in revenue and a $1 Bn in valuation within three years of launch.

With MoneyTap, Laplanche looks to unlock the potential of consumer lending space in Asia, and help them scale their growth in the near future. MoneyTap is one of India’s app-based credit line companies that claims to provide quick, flexible and hassle-free credit of up to INR 5 lakh at interest rates starting 13% per annum.

Prime Venture Partners Adds Dr Ashish Gupta As Partner Emeritus

In a bid to strengthen its investment team, early-stage venture capital firm Prime Venture Partners announced the addition of Dr Ashish Gupta as Partner Emeritus. A renowned serial entrepreneur, angel investor and VC, Gupta cofounded Helion Ventures in 2005. He actively serves on several boards including Ezetap, Pubmatic, Simlilearn, SMSGupshup and Naukri. Some of his past investments include Qwickcilver (acquired by Pine Labs), Daksh (acquired by IBM), MakeMyTrip, Upwork, Perfios and Redbus among others.

At Prime Venture Partners, Gupta will be part of the investment committee where he will be involved in the decision-making process of all future investments at Prime. Also, he will serve as a mentor and advisor to the entire portfolio, the fund’s future strategies and guide the team on several aspects of venture capital investing and portfolio management. Moreover, with the addition of Gupta, Prime looks to boost its portfolio with early-stage investments in fintech, SaaS, enterprise, healthcare, education and logistics.

Prime Venture Partners is currently led by Sanjay Swamy, Shripati Acharya and Amit Somani. The fund is backed by Raj Mashruwala, a well-known serial entrepreneur, investor and Aadhaar volunteer. With more than 25 companies in its portfolio, Prime Venture Partners claims to add a much-needed gap in the Indian startup ecosystem by bringing a combination of first-hand entrepreneurial experience, operating expertise and meaningful capital.

Pine Labs Appoints Gayatri Rath

Retail payment startup Pine Labs appointed Gayatri Rath as chief marketing and communications officer. Rath has over 25 years of experience. Prior to joining Pine Labs, she led storytelling, branding and communications in India and Asia for several brands including Microsoft, GE Capital and Oracle among others.

At Pine Labs, Rath will be leading the brand, marketing and communications functions as the company looks to expand its growth in merchant commerce across India, Southeast Asia and the Middle East.

SAIF Partners India Promotes Mayank Khanduja 

Venture capital and growth-equity investment firm SAIF Partners India recently promoted Mayank Khanduja as the managing director of the company, from Principal. Khanduja has been with the firs for the last nine years and has led its investments in startups such as ShareChat, NoBroker and Playsimple Games among others. At present, Khanduja works closely with 15+ portfolio companies.

Prior to joining SAIF in 2011, Khanduja has worked with McKinsey and Co., where he has clients in the tech, media and telecom space. SAIF Partners India is currently investing out of its third India dedicated funding. Currently, the firm has a portfolio of 50+ companies across consumer, education, finance, healthcare, internet, SaaS, logistics sectors and has offices in Gurugram and Bengaluru.

BharatPe Appoints Suhail Sameer

Delhi-based digital payments startup BharatPe appointed Suhail Sameer as group president. Prior to this, he has worked in companies like McKinsey and RP-Sanjiv Goenka Group. During his professional stint, Sameer has extensive experience working with consumer (FMCG retail) and consumer technology sectors, and institutional investors.

With BharatPe, Sameer will closely be working with CEO Ashneer Grover and the board to build a financial service business and create new revenue lines on top of BharatPe’s merchant network. Earlier this year, BharatPe launched one of India’s first ZERO MDR card acceptance terminals called BharatSwipe. With over 40 Lakh merchants across 35 cities, the company has already disbursed more than 35K loans (INR 175 Cr). Last year, the company witnessed a 30x revenue growth  and processed over 5+ Cr UPI transactions a month.

The post Movers And Shakers Of The Week [August 10 – 15] appeared first on Inc42 Media.

Prime Minister Narendra Modi, on August 15 while addressing the nation on the occasion of India’s 74th Independence Day, launched the tech-based National Digital Health Mission (NDHM) to revolutionise the Indian health sector. The initiative will further boost the reach of Indian healthtech startups that have been working towards revamping healthcare with tech integration. 

The initiative comes under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) and is expected to improve the efficiency, effectiveness, and transparency of health services in the country. PM Modi explained that each patient would be given an ID card under this scheme. These cards will include confidential medical data such as prescriptions, diagnostic reports, discharge summaries and more.

The patients will have to give their doctors or health providers one-time access to this data during hospital visits or consultations. The government has also clarified that access to medical data will have to be given separately for each visit and that doctors could only access it for a limited time. This will address any arising concerns of data confidentiality as well.

Commenting on the same, PM Modi said, “Every Indian will get a health ID card. Every time you visit a doctor or a pharmacy, everything will be logged in this card. From the doctor’s appointment to the medication, everything will be available in your health profile.”

Telemedicine, Teleconsultations To Be Under This Mission

The National Digital Health Mission will also allow the patients to access health services remotely through teleconsultations and epharmacies while offering other health-related benefits. The development comes after a few months after the ministry of health, and family welfare (MoHFW) rolled out a set of guidelines for telemedicine or remote delivery of medical services. However, the epharmacies guidelines are still on the back burner.

With the telemedicine guidelines in place, doctors will be able to write prescriptions based on telephonic, textual, or video conversations — chat, images, messaging, emails, fax, and others. The step will allow users to consult certified medical practitioners without going out of the house.

Modi also believes that the ongoing global pandemic has helped in the spread of telemedicine and teleconsultation. In a LinkedIn post published in April, Modi highlighted that telemedicine and teleconsultation are at the same path of success as digital payments with growing numbers and integration, however, there is still scope of innovation here.

National Digital Health Mission To Boost Indian Healthtech Startups

According to Inc42’s The State of Startup Ecosystem Report 2018, there are a total of 4,892 startups in the Indian healthtech space, which have raised a total of $504 Mn between 2014-2018. In 2019, the healthtech sector recorded total funding of $586.93 Mn, an increase of over 10% in the amount of funding from the previous year.

The government efforts to digitise the Indian healthcare segment will boost the confidence of the entrepreneurs working in this sector. The healthtech segment, along with edtech, has anyway emerged as the choice of investors during the pandemic.

Several startups like 1mg, Medlife, Remedo, Suki, Akna Medical, and others have raised funding during the pandemic. Meanwhile, Medlife and PharmEasy are reportedly eyeing a merger, and Reliance Jio may be looking to acquire Netmeds to expand its healthcare offerings.

Even the Indian government has onboarded healthtech startups to bring about innovative solutions under the Ayushman Bharat Start-up Grand Challenge. The healthcare industry in India is vast, comprising hospitals, medical devices, clinical trials, medical tourism, health insurance, and medical equipment, besides telemedicine or online pharmacies.

Advancements in technology will also bring about a paradigm shift in healthcare across its spectrum including disease prevention, diagnosis, treatment, and rehabilitation. Technological tools such as artificial intelligence and big data can help provide more personalised treatment options to patients with better outcomes.

Digital Health On Platter Since Last Year

The Indian government has been in discussions to set up the National Digital Health Mission since last year. According to media reports, even a report filed by a committee set up by the Ministry of Health and Family Welfare had emphasised on the need to introduce such a specialised body, which was based on similar models as seen in the likes of UIDAI and GSTN.

Some of the proposed provisions under the NDHM were –

• Citizens should be able to access their electronic health records conveniently, preferably within five clicks;
• Citizens should get integrated health services at a single point, though multiple agencies, departments or services providers are involved;
• NDHM shall assure a continuum of care to citizens, across primary, secondary and tertiary care and public and private service providers;
• A framework for unified communication centre will be prepared to facilitate voice-based services and outreach;
• NDHM shall support national portability for healthcare services

The report also recommends that the National Digital Health Mission will be an open API-based ecosystem where security and privacy will be built into the design and development of the APIs, which will be audited for security and privacy before deployment.

The post Will Modi’s Pitch For Tech-Based Healthcare Infra Be A Game Changer For Startups? appeared first on Inc42 Media.

After ecommerce giant Amazon, homegrown rival Flipkart is planning its entry into the alcohol delivery segment in India. The Walmart-owned company has reportedly partnered with alcohol delivery startup Hipbar to deliver liquor in West Bengal and Odisha, according to the government letter seen by Reuters.

The letter also notes that Flipkart’s customers will be allowed to access HipBar’s application on Flipkart. Under the arrangement, Flipkart customers will be able to place orders for their favourite tipple, which HipBar will then deliver after collecting products from retail outlets.

Chennai-based Hipbar was founded in 2015 by Prasanna Natarajan, and operates out of Bengaluru, Goa and Mahe in Puducherry. HipBar enables age verified consumers to browse and order a range of alcoholic beverages and get them delivered at their doorstep, where permitted, or pick it up from a retail store at their convenience.

HipBar has developed a stringent age verification process as well as highly compliant standard operating procedures to ensure that the company’s delivery service fosters a safe drinking environment in India. Besides the last-mile alcohol delivery platform, the platform also offers a SaaS-based e-governance module for use by Governments, HipBar Point-of-Sale (POS) for standalone licensed retail stores and HipBar Pay for government-controlled retail stores.

The company is backed by beverage alcohol company Diageo India, which owns 26% stake in the company. Diageo India, a subsidiary of global leader Diageo plc manufactures, sells and distributes premium alcohol beverage brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, Royal Challenge, McDowell’s No.1, Smirnoff, Captain Morgan and Four Seasons.

Meanwhile, other ecommerce and online delivery giants Amazon, Zomato, Swiggy and BigBasket have also made a segway in this segment during the global pandemic and the resultant travel restrictions. In June, West Bengal State Beverages Corp authorised Amazon and BigBasket, along with few other companies, to carry out online retail of liquor trade in the state.

Whereas, Zomato and Swiggy started their alcohol delivery operations from Jharkhand in May 2020. Both companies leveraged on their existing technology, nationwide presence and logistics infrastructure. Besides West Bengal and Jharkhand, even Maharashtra, Chhattisgarh, Punjab, Tamil Nadu and Odisha have started alcohol delivery.

Meanwhile, Delhi and Pune have started issuing e-tokens that allow users to save their spot in the alcohol outlet queues. Kerala has stated a system where customers can book their order online and collect it from the shop later.

The post After Amazon, Flipkart Explores Alcohol Delivery appeared first on Inc42 Media.

The All Indian Organisation of Chemist and Druggists (AIOCD), on Friday (August 14), wrote to Jeff Bezos calling out the launch of Amazon’s epharmacy business as “illegal”.

The association, which has nearly 850K Indian chemists, noted that the government had only allowed sale of medicines online during the lockdown as it amounted to an emergency, and that home delivering medicines would be in contempt of the Delhi high court’s decision that put a stay on online pharmacies. Besides this, the association noted that there is no criteria for epharmacies under the Drugs and Cosmetics Act of 1940.

“We have also given you enough evidence above to prove our point. We also have a full dossier ready on this subject and entering this space can bring on legal implications which can bring disrepute to Amazon’s name,” the organisation said.

Amazon launched its online pharmacy service named ‘Amazon Pharmacy’ this Thursday. The online pharmacy will be piloted in Bengaluru first and will be expanded to other cities later. With this, the company will be in direct competition with 1mg, NetMeds, Medlife and PharmEasy, along with other startups in this segment.

Even Reliance is looking to expand its grocery delivery venture JioMart to include other categories including medicines. According to media reports, Reliance is also in talks to acquire NetMeds for somewhere between $130 Mn to $150 Mn, while Medlife and PharmEasy are reportedly contemplating a merger to get a larger pie of the market.

Govt Unclear About Epharmacies Guidelines 

In September 2018, the health ministry had released the draft rules for online pharmacies for the first time. The rules made it mandatory for online pharmacies and cosmetics stores to obtain licenses within two months of the notification. Post that only licensed stores will be allowed to operate in India. The government was supposed to launch epharmacies guidelines to regulate the sector, but the guidelines is still nowhere in sight.

Even the Indian government has been sending mixed signals about its stand on epharmacies.
In May 2020, the Indian government suspended the Aarogya Setu Mitr portal, which promoted the online sale of medicines, following objections by nearly 8.5 lakh brick-and-mortar retail chemists across India in June 2020.

Aarogya Setu Mitr had listed online pharmacies like Netmeds, PharmaEasy, Medlife and 1mg, to offer medicines online. The petitioners had claimed that the Mitr portal was acting as a marketing tool for epharmacies, and does not mention offline pharmacies.

On the other hand, Modi, today (on August 15), launched National Digital Health Mission (NDHM) to revolutionise the Indian health sector. Under this, the government will allow the patients to access health services remotely through teleconsultations and epharmacies while offering other health-related benefits. Ironically, AIOCD has also marked Prime Minister Narendra Modi and other government officials in the letter to Amazon CEO Bezos.

The post Chemist Body Writes To Bezos Calling Amazon Pharmacy Illegal appeared first on Inc42 Media.

The government has found itself between a rock and a hard place with its ‘Aatma Nirbhar Bharat’ or ‘self-reliant India’ call. With the second-largest armed forces in the world, India is saddled between the rising cost of defence imports and the need to look inward to muscle up the forces with the latest high-tech weapons and upgrades.  

According to data from the Stockholm International Peace Research Institute (SIPRI), India was the world’s second-largest arms importer, accounting for 9.2% of the global arms imports from 2015-19. The overwhelming dependence on Russian arms has declined, only for India to diversify its arms stockpile, now inking defence deals with the USA, Israel and France, among various others. According to another SIPRI report titled ‘Trends In World Military Expenditure, 2019’, India is the third-largest military spender in the world, after the US and China, with its military spending growing by 6.8% to $71.1 Bn in 2019. 

In their book titled, ‘Arming Without Aiming: India’s Military Modernization’, South Asia security expert Stephen P Cohen and Sunil Dasgupta, a Senior Fellow at Brookings, cited the absence of a coherent military strategy, as well as lack of political will in successive governments, as reasons behind India failing to ramp up its defence manufacturing capabilities. They trace the roots of these flaws to choices made before and since independence. However, a few different choices seem to have been made in the last few years.

Acting on its ‘Make in India’ rhetoric, the BJP-led government has introduced a slew of measures to power local defence manufacturing, exploring linkages between industry, academia and the private sector. Earlier this year, the Defence Research and Development Organisation (DRDO) was looking to establish laboratories for futuristic technologies, under the name of DRDO Young Scientist Laboratories (DYSL). These labs were to be located in Bengaluru, Mumbai, Chennai, Kolkata and Hyderabad. Further, the government was also looking to provide MSMEs, who supply protective military gear, with working capital financing. These measures are in line with the government’s vision to make India one of the top five defence and aerospace manufacturers in the world, with an annual defence exports target of $5 Bn by 2025.

Currently, 194 defence tech startups are innovating under the government’s ‘Startup India’ mission. Of these, more than 50 are developing new ‘fit-for-military-use’ technologies and products under the government’s initiative, ‘Innovations for Defence Excellence’ (iDEX). These startups are trying to find solutions to the various problem statements that iDEX puts forth in its Defence India Startup Challenges (DISC), ranging from individual splinter-proof protection suits to real-time positioning systems. 

Big Push For Defence Tech Through iDEX

In 2018, the government launched ‘Innovations For Defence Excellence’ (iDEX), an initiative to foster the entrepreneurial zeal among MSMEs, startups, individuals, research and development institutes and academia. Through the initiative, those demonstrating capabilities of developing innovative technologies in defence are provided with both funding and incubation support. The government’s Defence India Startup Challenges (DISC), which come with problem statements, focus on leveraging startups’ capabilities to fulfil the needs of armed forces. iDEX is funded and managed by the Defence Innovation Organisation, a not-for-profit company. 

Ajay Sangwan, founder and creative director of Nyokas Technologies, a defence tech startup, says, “Finding the buyer in the defence sphere is very time-consuming. Through iDEX, we have the benefit of working in direct collaboration with the end-user, which are the armed forces. The availability of Electronics System Development and Manufacturing (ESDM) facilities and materials labs in the public and private sector is a huge plus.”  

Nyokas Technologies is engaged in the development of individual protection systems, simply put, body armours which are splinter-proof and light-weight, including eyewear and helmets, with in-built sensors to track vitals such as body temperature and cardiac insights. Something which Sangwan calls a “Batman suit.”  

He added that getting defence certificates which mention that the company’s product is of required quality and complies with the regulatory standards can help them tap into civilian use cases. The same helps the company in its scale and growth. 

Nyokas won the iDEX DISC in 2019. As the winner of the challenge, Nyokas received a grant of INR 1.15 Cr, which is the highest civilian grant for innovation in India. The winners of the challenge are awarded up to INR 1.5 Cr in funds, through equity and other relevant structures. Besides the fund, selected applicants may also be given entry to accelerator programs run by iDEX partners, where they are supported in technology and business development through mentorship under experts. The selected applicants may also be supported in terms of access to testing facilities and experts for product development. Nyokas has Forge Accelerator as its partner incubator for iDEX.

The startup is incubated at the Maker Village in Kochi, Kerala. It is India’s largest electronics and hardware incubator, an initiative of the Ministry of Electronics and Information Technology (MeitY), with the Indian Institute of Information Technology and Management, Kerala (IIITM-Kerala) as the implementation agency and the Kerala Startup Mission as the supporting partner. According to Sangwan, Maker Village brings several tangible benefits to defence tech startups. These include the availability of rapid prototyping tools, boot camps on venture development, innovation and entrepreneurship and scale-up hardware product development labs, to name a few. 

Sangwan feels that the scientific approach to product management made possible by iDEX, Maker Village, and partner incubator Forge, helps a company deploy its product in 18 months, as opposed to 3-5 years which it takes without government support. “We will be deploying the product for user trials in another 6-8 months and are targeting to get a patent by December 2021,” says Sangwan.

Another defence tech startup and one of the 44 winners in the 2019 cycle of the DISC, HW Design Labs, is designing and developing hardware systems for wireless connectivity and advanced tracking.

Jayakrishnan A L, founder and CEO of HW Design Labs, concurs with Sangwan’s assessment of the benefits accrued by startups at Maker Village. “Such missions require huge investments in the early stages of development. The solution we develop under the iDEX program requires a range of tests and lab equipment, tools and software licenses, among others. By providing these facilities under one roof, the Maker Village facilitates life cycle management of the product.”

One of HW Design Labs’ flagship products is an FM-RDS (radio data service) based Disaster Warning Broadcast System, consisting of a hardware device and a mobile application. The device provides text messages and animated live indications as alerts for disaster management authorities. The warning messages could range from weather forecasts, wind speed, cyclonic conditions or flood alerts.

Besides this, the company is also developing a Real-Time Positioning System (r-POS), both GPS-based and non-GNSS (global navigation satellite systems) based. This is because, in certain locations, GNSS-based navigation systems cannot provide adequate performance, such as indoors or in urban canyons (where the street is flanked by tall buildings on both sides). The GNSS signals could also be jammed in some scenarios. 

HW Design Labs’ r-POS provides 3D position data and inertial behaviour of the moving/flying machine, which needs finer levels of precision, especially in extreme weather conditions. The company has also developed a GPS Anti-Jam device, which helps in reducing the impact of GNSS signal jamming and disruption. 

Jayakrishnan adds that while the current model of iDEX is a great platform for defence tech startups, developing strategies for effective online interactions is the need of the hour because the Covid-19 pandemic has affected the company’s schedule. 

Other startups such as Sastra Robotics, which has developed scalable automated robotics solutions, and EyeROV, India’s first underwater drone, among others have also received validation from the DRDO. Most of the Indian startups with defence tech applications are based in Kerala, which has emerged as the hub of India’s hardware ecosystem. 

Are We Becoming Aatma Nirbhar In Defence? 

After border clashes with China in Ladakh’s Galwan Valley in June, the government’s vision of an ‘Aatma Nirbhar Bharat’ was also echoed in the Draft Defence Production and Export Promotion Policy (DPEPP), 2020, released earlier this month. “Propelled by the recent successes in exports, India is set to realise its potential as an emerging defence manufacturing hub,” reads the draft policy, meant to serve as an “overarching guiding document to provide a focused, structured and significant thrust to defence production capabilities of the country for self-reliance and exports.” 

According to data from SIPRI, India made a modest entry at number 23 in the list of global arms exporters for 2015-19, the first time it has figured on the list. Further, the Ministry of Defence’s annual report for 2018-19 records that the defence exports were worth INR 10,745 Cr, a growth of more than 100% from 2017-18 (INR 4,682 Cr) and over 700% since 2016-17 (INR 1,521 Cr). India’s biggest clients are its neighbouring countries such as Myanmar, Sri Lanka and Mauritius. 

The draft policy adds that iDEX would be scaled up to engage with 300 more startups and develop 60 new technologies/ products during the next five years. 

To enhance collaboration with these companies, the Defence Research Development Organisation (DRDO) has developed a new industry-friendly patent policy for transfer of DRDO developed technologies to industries. The policy would help Indian startups get free access for using DRDO patents and working on innovative solutions aimed to improve India’s defence capabilities.

While there are plenty of positives in the country’s push for self-reliance in the defence sphere and assimilation of startups in the defence ecosystem, a few concerns remain. 

The details tabled by Shripad Naik, former Minister of State for Defence in the Lok Sabha in February last year showed that over the last five years, while the procurement from Indian vendors had increased from 2014 to 2018, it fell by 10.8% in the fiscal year 2018-19.

In detailing the yearly procurement, the minister had shown that while the procurement from Indian vendors was INR 39.8K Cr in 2014-15, it improved the most in 2017-18 reaching INR 43.6K Cr, but fell to its lowest in five years, to INR 38.9K Cr in 2018-19. Perhaps, 2018-19 was an off-year. One can’t disregard the consistent incline in the procurement from Indian vendors from 2014-18. However, the concerns with India’s defence sector don’t end there. 

Defence Budget Insufficient For Modernisation

According to analysts, the marginal hike of 5.8% in the defence budget for 2020-21, to INR 3.37 lakh Cr (excluding pensions), would be insufficient to meet the armed forces’ modernisation needs. The share of the defence budget in the overall union budget has also been declining over the years. 

With rising border tensions and a hostile geopolitical environment in India’s immediate neighbourhood, the focus on capital outlay for the armed forces, and ameliorating local defence manufacturing capabilities, is stronger than ever. A day before India’s 74th Independence Day, Defence Minister Rajnath Singh launched an online portal which would provide information about defence equipment that can be taken up for indigenisation. Earlier this week, the government imposed an import embargo on 101 defence items, which it believes can be manufactured locally. Earlier this year, the government increased the FDI cap in defence production from 49% to 74% under the automatic route, in a bid to encourage privatisation in the sector.

The iDEX, which is in its third year, is certainly a boon for the budding defence tech startups in India. The seeds have been sown for indigenisation of the armed forces’ technologies and equipment. It remains to be seen whether India can climb further up in the list of arms’ exporters, on the back of futuristic products and technologies developed by defence tech startups. 

The post Can India’s Defence Tech Startups Match Up To Aatma Nirbhar Bharat Challenge? appeared first on Inc42 Media.

We bring to you the latest edition of Funding Galore: Indian Startup Funding Of The Week!

Ahead of a proposed initial public offering (IPO), Indian foodtech unicorn is likely to receive a total investment of up to $200 Mn from US-based investment firm Tiger Global Management. Currently valued at $3 Bn, Zomato has also been in talks with existing investor Temasek Holdings, a Singapore-based investment company, alongside Alibaba Group Holding’s ANT Financial, to raise funds.

This development comes after Zomato’s cofounder and CEO Deepinder Goyal last year had announced that the company would raise $500-600 Mn by January 2020. However, with the disruption caused due to Covid-19, the road to profitability looks bleak. As per Inc42’s analysis of Zomato’s annual report, released last month, the company is likely to incur a 50% loss of revenue in the current fiscal year.

World Bank’s International Finance Corporation (IFC) committed to invest $10 Mn (INR 75 Cr) in Hyderabad-based early-stage venture capital firm Endiya Partners’ Fund II. Also, IFC committed an additional $10 Mn for direct co-investments alongside Endiya Fund II. With this partnership, IFC will be providing Endiya’s portfolio companies financial and strategic support, thereby increasing access to growth opportunities and sustainable scalability.

Overall, $59.416 Mn was invested across 25 Indian startups this week, and two acquisitions took place. (This funding report is based on startups that disclosed funding amounts).

Indian Startup Funding Of The Week

1. Medlife: $23.3 Mn
2. RateGain: $15 Mn
3. upGrad: $6.67 Mn
4. Verloop: $3.4 Mn
5. ZipLoan: $2 Mn
6. HungerBox: $1.56 Mn
7. Terra.do: $1.4 Mn
8. HomeLane: $1.4 Mn
9. Onco: $1.3 Mn
10. Capital Float: $801K
11. MaxWholesale: $591K
12. Vinculum: $506K
13. Klub: $400K
14. DocSumo: $220K
15. Purple Style Labs: $133K
16. LetsVenture: $86K
17. Instoried: $56K
18. SignCatch: $46K
19. Aker Foods: $21K
20. Clovia: $20K
21. Classplus: $20K
22. CUSMAT: Undisclosed
23. Winuall: Undisclosed
24. DaveAI: Undisclosed
25.  Vieroots: Undisclosed

Medlife

Bengaluru-based online pharmacy company Medlife raised a total of INR 173 Cr ($23.3 Mn) in funding from various investors, including SC Credit Fund and Prasid Uno Family Trust. The fund is most likely to be used for its business expansion, given its recent diversification to online doctor consultations, wellness products and laboratory services. Founded in 2014 by Tushar Kumar and Prashant Singh, the company offers inventory-led epharmacy and helps doctors digitally manage and store patient records.

RateGain

Travel and hospitality SaaS startup RateGain is looking at raising $15 Mn from Avataar Venture Partners. According to the Ministry of Corporate Affairs filings accessed by Inc42, the funds would help the company in its expansion plans. Founded in 2004, RateGain is a brainchild of Bhanu Chopra. With its cloud-based technology platform, the company helps hospitality and travel companies streamline operations and sales, thereby maximising revenue.

upGrad

Mumbai-based edtech startup upGrad raised a debt funding of INR 50 Cr ($6.67 Mn) from IIFL Income Opportunities Fund. The debt raised by upGrad comes after it had recently announced the reinstatement of full salaries for all its employees. Last month, it had announced to revoke all salary deductions from the second quarter of the financial year 2021, starting July. Founded in 2015, the cofounders include Ronnie Screwvala, Mayank Kumar, Phalgun Kompalli and Ravijot Chugh. With over 30K paid users, the company focuses on providing higher education, as well as helps working professionals to develop proficiency in most in-demand technical skills.

Verloop

Y Combinator backed customer support automation platform Verloop raised INR 26 Cr ($3.4 Mn) through equity and preference shares from Alpha Wave Incubation, Praitithi Investment Trust, Parampara Early Stage Opportunities Fund and Mumbai-based angel investors Sangameswaran and Sankarnarayanan Sangmeswaran. The company will be using the fund to enhance its product and expand its solution to clients across the country.

Launched in 2015 by Gaurav Singh, the company claims to have processed over 2 Bn queries from customers across its clients, including Nykaa, Cleartrip, Decathlon, Pipa Bella, Portea, Apollo Munich Health Insurance and others. In addition to this, it claims to automate up to 60% of the customer-facing operations for companies in a month. Besides English, its chatbot supports various languages including Hindi, Tamil, Telugu, Kannada, Marathi, Bengali and Hinglish.

ZipLoan

New Delhi based fintech startup ZipLoan recently raised INR 15 Cr ($2 Mn) in debt funding from Stride Ventures. Interestingly, this is Stride Ventures’ first foray into fintech lending and the amount will be dispersed across two trenches. In a press statement, the company said that its platform, which tests creditworthiness of a borrower, has so far helped it maintain its non-performing assets (NPA) at under 3%.

ZipLoan was founded by Kshitij Puri and Shalabh Singhal in 2015. The company offers working capital loans for kirana stores and micro industries. Till date, it has discussed INR 400 Cr loan across 10K borrowers. Currently, it is present in Delhi, Mumbai, Indore, Jaipur, Lucknow and Dehradun.

HungerBox 

Bengaluru-based B2B foodtech startup recently raised INR 11.67 Cr ($1.56 Mn) in funding from existing investors, including Paytm parent company One97 Communications Limited, Sabre Partners Trust, Pratithi Investment Trust and Singapore-based angel investor Srihari Kumar. With this, HungerBox has raised $18 Mn in funding till date. In November 2019, HungerBox cofounder Sandipan Mitra had said that the company plans to raise a total of $25 Mn in Series D round of funding over the next six to eight months. At the time, he had said that the company looks to get publicly listed.

Terra.do

California-based online climate school Terra.do raised $1.4 Mn from Zerodha-backed Rainmatter Capital, BEENEXT and others. With this funding, Terra.do looks to tackle the climate change problem in the country and scale its business. Founded by Anshuman Bapna, Kamal Kapadia and Mayank Jain in 2020, the company runs online learning programmes, alongside a community that helps individuals across the globe transition their skills into working on tough climate change problems.

HomeLane

Bengaluru-based online home furnishing startup HomeLane raised INR 10.5 Cr ($1.4 Mn) from its existing investor JSW Ventures. In last year’s fundraising round, the company had received INR 3 Cr ($30 Mn) from investors like Evolvence India Fund (EIF), Pidilite Group and FJ Labs, alongside Sequoia Capital, Accel Partners and JSW Ventures. At the time, HomeLane had said to use the funding to launch newer categories, scale its proprietary design-to-manufacturing platform to more designers, vendors and installers and expand to newer cities in India.

The company was cofounded by Rama Harinath, Srikanth Iyer and Vivek Parasuram in 2014. Currently operating in Bengaluru, Chennai, Hyderabad, Mumbai and Delhi NCR, it offers its customers a personalised design service through their panel of interior designers who work with them to customise the house designs.

Onco

Bengaluru-based cancer care startup Onco raised INR 9.9 Cr ($1.3 Mn), both a mix of debt and preference funding from Alteria Capital India. Prior to this, it had also raised close to $7 Mn in funding from Accel, Chiratae Ventures and Dream Incubator. The funds were said to be utilised to build a team, scale its operations and expand customer outreach within India and abroad.

Onco was founded in 2016 by Rashie Jain and Dr Amit Jotwani. The company leverages its global network of oncologists from across the world to provide accurate and personalised scientific advice to cancer patients at every stage of their journey.

Capital Float

Bengaluru-based digital lending platform Capital Float recently raised INR 3 Cr ($400K) in debt funding from DNG Enterprises. According to the Ministry of Corporate Affairs filings accessed by Inc42, the company has raised INR 6 Cr in the last four days. Also, in the past few months, the company had also raised equity funding from multiple investors, including Ribbit Capital, Amazon, SAIF Partners, Sequoia Capital India. At the time, the company said that it will be using the funds to strengthen its capital base and expand its lending operations to SMEs and consumers. Launched in 2013 by Gaurav Hinduja and Sashank Rishyasringa, Capital Float lends to SMEs to help them scale up.

MaxWholesale

Gurugram based B2B ecommerce startup MaxWholesale raised additional INR 4.43 Cr ($591K) from Dubai-based private family office Al Falaj Commercial Investment Co and Vistra ITCL, a trustee for Indian Angel Network (IAN) Fund I, as noted in MCA filings accessed by Inc42. Previously the company had already raised close to $3 Mn in Series A funding round led by same investors. The company is utilising these funds to hire talent, develop technology, accelerate growth and expand the network of kirana stores.

Founded by Samarth Agarwal and Rohit Narang in April 2016, MaxWholesale claims to bridge the gap between neighbourhood mom-and-pop stores and the wholesalers or the FMCG companies. Also, its platform allows retailers to restock the inventory for their stores.

Vinculum

Noida-based enterprisetech startup Vinculum on August 10, raised INR 3.79 Cr ($506K) funding from Accel India Ventures, as per MCA filings. The company is yet to reveal the use cases of the fund. Launched in 2007, the company was started by Venkat Nott, Piyush Madan, Deepak Singlain. Vinculum, today, helps brands across various categories to create content and push it to multiple global sales channels and manage orders, inventory and fulfilment on a real-time basis. More than anything, it helps brands discover deep insights and identify online channels with velocity, competition products and price points, thereby helping brands to scale faster.

Klub

Sequoia Surge backed fintech startup Klub, as noted in MCA filings, has raised INR 3 Cr ($400K) in equity funding from Ken Capital Technologies. This development comes after the company had raised $2 Mn in a pre-seed round led by Sequoia Surge. The company had said that it will be using these funds to build Klub’s investment and data platform, along with building a team and acquiring partners on the platform.

Klub was founded by Anurakt Jain and Ishita Verma in August 2019. The company enables financing to high-affinity brands, and in the past, its investment has also come in from EMVC Fintech Fund, Better capital, Tracxn Labs and 9Unicorns among other investors.

DocSumo

Singapore and Mumbai-based DocSumo recently raised a seed fund of $220K from an early-stage venture capital firm Better Capital. The seed round saw participation from global accelerators TechStars and Barclays among others. The company, in a press statement, said that it will use the fund to strengthen its product, marketing and sales engine and expand into newer markets like the USA. Founded in 2019, the company was founded by Rushabh Sheth, along with Bikram Dahl. The company claimed to offer intelligent workflow automation for financial services companies to reduce office costs by up to 70% through document data capture, analytics and fraud detection.

Purple Style Labs

According to the MCA filing, accessed by Inc42, Mumbai-based fashiontech startup Purple Style Labs on August 10, has raised INR 1 Cr ($133K) through preference shares at a face value of INR 10 and premium INR 56,990. Prior to this, during the initial lockdown phase, the company had also raised INR 12.6 Cr from Lemon Innovision Ventures, Progressive Consultancy, Foray Universal Consultancy, Premier Financial Services, Vistra ITCL, Astarc Ventures, BN Fincorp among a few angel investors, including Flipkart’s Binny Bansal and Rishi Vasudev, House of Anita Dongre’s Mukesh Sawlani and GoQuest Media founder Vivek Lath.

Founded by Abhishek Agarwal in 2015, Purple Style labs incubates young designer brands and help them with sales, marketing and technical support.

LetsVenture

Bengaluru-based deal-making platform LetsVenture recently raised INR 65 Lakh ($86K) in debt funding from seed, early and growth-stage focused venture capital firm Accel India and angel investors Sashikanth Balachandar and Gagan Sashikanth, as per MCA filings. LetsVenture deal syndication platform will offer investors, including high net worth individuals (HNIs) and family offices to invest in growth-stage startups. Currently, in a stealth mode, the platform already has more than 500 investors.

LetsVenture was founded in 2013 by Shanti Mohan and Sanjay Jha. The company offers various investment options for investors, including LetsGrow, Angel AIF, LV Titans and MyStartupEquity among others. For instance, LetsGrow is one such platform for angel investors and industry experts to help early-stage startups identify the right metrics that they would need to target growth or capital of $1 Mn to $5 Mn.

Instoried

As per MCA filings accessed by Inc42, Bengaluru based augmented writing platform Instoried has raised INR 42 Lakh ($56K) in equity funding from Artesian Venture Partners. Prior to this, the company had also raised $500K in seed funding from Venture Catalysts. At the time, the company had said that it will be utilising the fund to expand into multiple languages and reach a global audience.

Backed by Axilor Ventures, Avishkar Deeptech accelerator, IIIT-H foundation and Google Developers Launchpad, the company offers end-to-end solutions to content markets, where it helps them target a particular emotion based on its identification of the brand’s emotional quotient. The tool can also provide a tailor-made recommendation of words and phrases. It was founded by Sharmin Ali and Sustanshu Raj in 2018.

SignCatch

San Francisco and New Delhi based enterprisetech startup SignCatch recently raised INR 35 Lakh ($46K) from Edwise International’s founder Sushil Sukhwani, as noted on MCA filings, which was accessed by Inc42. The company was founded by serial entrepreneurs Sumit Duggal and Saurabh Dwivedi in 2014. SignCatch is a cloud-based omnichannel retail tech startup that creates digital transaction environments and experience to both offline and online retail stores. The company is now aggressively looking at expansion plans to enter other markets, particularly Southeast Asian markets.

Aker Foods

As per MCA filings accessed by Inc42, Aker Foods recently raised INR 16 Lakhs ($21K) from MAVM Angels Network and angel investors like Rishi Tandulwadkar, Mayank Jain and Mohammad Khusroo. Knitting the gap in the supply chain with its AI/ML proprietary platform, Aker Foods looks to deliver fresh fruits, vegetables and other supplies to restaurants and businesses by directly procuring from farmers and manufacturers. In the process, the company claims to keep a check on the inventory, manage wastage and reduce manpower requirements. The company was cofounded by Suraj Saste, Nihal Surve, Adarsh Kedari and Manoj Jadhav in February 2019.

Clovia

Delhi based lingerie startup Clovia raised INR 15 Lakh ($20K) from angel investor Babu Vinod Sivadasan in a Series B round, as per MCA filings accessed by Inc42. Last year, the company had raised funding from AT Capital, Ivy Cap Ventures and other investors. At the time, the company said that the funds would be utilised for enhancing its product and technology development, alongside scaling up its brand portfolio, expanding to newer geographies, increasing operational efficiencies and strengthening its team.

Started by husband and wife duo, Pankaj Vermani and Neha Kant, along with Suman Choudhary in 2013. Clovia is one of the popular D2C women-focused brands in the country for lingerie and sleepwear. It designs, manufacturers and sells premium fashion lingerie, innerwear, nightwear and shapewear among others.

Classplus

Sequoia Surge backed Classplus raised INR 15 Lakh ($20K) in equity funding from angel investor Anandakrishnan Chandrasekaran, as per MCA filings accessed by Inc42. Earlier this year, the company had raised $2.5 Mn in Pre-Series A round from Blume Ventures, alongsidealong side angel investors such as Cred’s founder Kunal Shah, general manager of Xiaomi Indonesia Alvin Tse, partner at Locu Ventures Eric Kwan among others.

At the time, the company had said that the fund would be utilised to enhance existing technology, and expand its team across engineering, product and business verticals. Launched in 2018 by Mukul Rustagi and Bhaswat Agarwal, along with Bikash Dash, Nikhil Goel, Vatsal Rustagi. Classplus enables coaching institutes, tuition centres and private tutors to take their traditional offline class management setups online with a mobile-friendly product.

CUSMAT

Hyderabad-based AR/VR edtech startup CUSMAT raised an undisclosed amount of funding from Venture Catalysts. The funding round also witnessed participation from Raveen Sastry of Multiple Ventures; Co-investors Better Capital’s Vaibhav Domkundwar; MapMyIndia’s Rakesh Verma and CIPL’s Pratap Atwal. With the recent funding, CUSMAT looks to capitalise on the opportunity. The company leverages AR/VR/MR and AI-based technology to skill, upskill, train and assess people in enterprises. Launched in 2016, it’s client belong to logistics, electronics, manufacturing, mining, steel, cement, pharmaceutical and healthcare among others.

Winuall

Bengaluru-based edtech startup Winuall raised an undisclosed amount of funding from Livspace’s Ramakant Sharma, Park+ and ex-VP Paytm Business, alongside other investors like Akash Gehani (cofounder, Instagramojo), Abhinav Patwa (VP, Onsitego), and existing investors Ankit Bhati (Cofounder, Ola) and Nitin Gupta (Head of Engineering, Milkbasket).

Winuall was founded in 2018 by Ashwini Purohit, Abinav Prakash, Pratik Sahay and Harsha Ravi. The company leverages AI to help coaching and educational institutes with digital services, provide content and recommend performance improvement solutions.

DaveAI

Bengaluru-based enterprisetech startup DaveAI recently raised an undisclosed amount of funding in its pre-series from Mumbai Angels Network, GHV Accelerator, IIIT Technology Venture Partners and Crestere Technologies’s CEO Mohan Kumar. The company said that it will be using the fund to enter new markets and sustain its growth at a global scale.

Founded by Ananthakrishnan Gopal, Ashok Balasundaram & Sriram P H in 2016. DaveAI’s sales platform augments in-store sales, field sales and outbound contact centre sales executives with hyper-personalized actionable to influence a specific sales, and in turn revenue. With clients like Maruti Suzuki, Pidilite Industries, Landmark Group and others, the company has recorded 230% revenue growth amid the global slowdown.

Vieroots

Kochi-based health, fitness and wellness startup Vieroots recently received an undisclosed amount of funding from Bollywood actor Sunil Shetty. Founded by Sanjeev Nair in 2018, Vieroots leverages AI to identify 200+ high risk, comorbid health conditions and stores the data digitally, which are tested at partnered genetic labs. In addition to this, the company recently introduced Epigenetic Lifestyle Modifications (EPLIMO), a unique initiative to create highly personalised lifestyle modifications based on genetic profiling and metabolic assessment, thereby keeping patients healthy and young. The company is estimated to be valued at around INR 100 Cr.

Indian Startup Acquisitions Of The Week 

Gray Matters India

In a bid to boost its AI-based assessment products, Noida-based edtech firm ConveGenius acquired Hyderabad-based edtech startup Gray Matters India for an undisclosed amount. With this acquisition, ConveGenius looks to empower 100 Mn students at the bottom of the education funnel, and make assessment personalised in a scalable manner.

Going forward, the company plans to automate learning capabilities and offer transparent communication infrastructure for under-served students with enhanced and tailor-made solutions. Grey Matters India was founded in 2013 by Pradeep Sharma with the agenda to develop assessment as a tool that would help students realise their full learning potential. Prior to this acquisition, Gray Matters India’s annual revenue rate (ARR) was about $1 Mn. In the span of seven years, the company has gathered data points from 6 Mn children across 15 states in the country.

Maples Imaging Solution

Pune-based tech firm Maples Imaging Solution which specialises in content-based object retrieval technology, recently got acquired by AntWorks for an undisclosed amount, as mentioned in MCA filings. This acquisition is likely to enhance the growth of AntWorks and its stakeholders multifold and further boost its technology capabilities. Founded in June 2015 by Asheesh Mehra and Govind Sandhu. The company provides technology and business process solutions to clients across industries, including healthcare and financial services among other vertices.

Other Developments Of The Week 

IDEMIA

France-based augmented identity platform, IDEMIA recently launched an innovation and incubation programme called iCube. With this, the company looks to support and assist Indian startups that leverage its augmented identity, and help them in their product development, financial assistance and faster commercial roll-out, alongside providing access to its global client base and opportunity spread across 180 countries. The selected startups will be provided with office space in their incubation facility located in Noida, India. Furthermore, it has partnered with Lumis Partners Supply Chain labs and Freshworks to reach out to a wider range of startups and support them in their endeavour.

The post Funding Galore: Indian Startup Funding Of The Week [August 10- 15] appeared first on Inc42 Media.

Announced five years ago on 15 August 2015 and launched in January 2016, Startup India is often called the current Narendra Modi government’s pet projects and for good reason. The  ‘Startup India, Standup India’ slogan ignited the spirit of entrepreneurship in India. Backed by a slew of policy reforms such as funding support, bilateral government collaborations with various countries, as well as a range of policies in various sectors, Startup India also brought Indian startups to the global tech discourse.

With a consistent messaging of hope and pride in Indian tech, Startup India attracted entrepreneurs from every corner of India. So what has been the impact of these initiatives in the past five years? Here’s a look at how Startup India changed the game from 2016 to now.

Moments By Numbers

1. From 29K startups in 2014, the numbers grew exponentially from 2015-2018 to touch 55K in 2020. Between 2016 and August 2020, Startup India programme says it has recognised over 34.8K startups. 

2. $63 Bn has been invested in Indian startups in the last five years. The Indian tech startups raised about $13.5 Bn in funding across 885 deals in 2017, which is the peak year in terms of funding in the past five years. 

3. From 10 unicorns in 2016, India now has 33 startups that have attained the unicorn status 

4. 53 Indian startups have the potential to join the unicorn club by 2022, as per the latest analysis by DataLabs by Inc42+

5. Flipkart’s $16 Bn acquisition by Walmart became the largest ecommerce deal globally and brought the retail giant’s full attention to the Indian market. Since then Flipkart seems to be focussing on several categories such as B2B supply, logistics and warehousing, hyperlocal dark stores and even alcohol delivery. 

6. Udaan became the fastest Indian startup to acquire unicorn status i.e. 26 months. As per DataLabs research of a sample set of 31 Indian unicorns over the years, the contribution of 2019 was 26% (till Q3 2019) — seven startups reached this mark the same year. The Datalabs by Inc42 report on the state of the ecosystem till Q3 2019 indicates that the median founding year for the unicorns in India is 2010, which is also the year when MakeMyTrip became India’s first unicorn. 

7. 665 Indian startups have been acquired in the last five years. 2019 noted that the ecosystem saw 111 M&A deals in the year, recording a 10% Y-o-Y fall. This is the lowest number of mergers and acquisitions deals between 2015 and 2019.

8. BYJU’S became the world’s most valuable edtech unicorn and is currently valued at $10.5 Bn and recently made waves with a $300 Mn acquisition of WhiteHat Jr, an 18-month-old company, the largest venture exit in Indian edtech history.

9. From 2000 investors in 2016, India has seen participation of 4,640 investors in the startup funding. DataLabs by Inc42+ has noted that that the number of unique investors in 2019 saw a minor fall as compared to the last three years, from a peak of 315 unique VCs in 2017. 

10. 30 Indian states including UTs have introduced startup policies and many of them have existed well before the Startup India programme came into effect. The state policies of Kerala, Maharashtra, Karnataka have been particularly successful, while Delhi government is looking to renew its startup policy later this year.

11. 34.8K startups have been recognised by DPIIT. Among these, 8.3K startups received intellectual property rights (IPR) fee benefits, while over 2.6 Lakh people enrolled in the entrepreneurship-focused learning courses offered by upGrad and Startup India. 

12. Over $1 Mn worth benefits were given to 5.5K startups as part of over 150 startup innovation programmes and challenges under Startup India programme.

13. SIDBI has released INR 700 Cr and committed INR 3,123 Cr to 47 AIF, while INR 695.94 Cr has been withdrawn from the Startup India fund of funds. To make the investment procedure simpler for the startups and the government, fund of funds also went digital in July 2019 through a web-based application.

14. INR 3,476 Cr has already been invested in 323 startups from the fund of funds corpus managed by Startup India through Invest India. 

15. Startup India enabled global market access and knowledge for Indian startups through bilateral government collaborations with Russia, South Korea, Portugal, Japan, Netherlands, United Kingdom, Sweden, Finland, Israel, and Singapore. 

16. India changed the startup definition in February 2019 to recognise companies as startups for up to 10 years from the incorporation date, plus the turnover limit has been increased to INR 100 Cr from INR 25 Cr earlier.

Digital India Moments

17. India is consistently improvising on ease of doing business rankings by the World Bank. Compared to 142 rank of India in 2015, India was ranked 63rd among 190 countries on 

18. India now has 676 Mn broadband subscribers (including both wireless and wireline connections) and 1149 Mn wireless telephone subscribers, out of which 629 Mn are urban subscribers.

19. The country has witnessed increased penetration of smartphones thanks to the proliferation of affordable devices made in China. The ensuing price wars and the government’s push for Make in India eventually led to the growth of the smartphone manufacturing market in India, which has further pushed the cost down. Today, India has close to 450 Mn smartphone users (as of July 2020) and is the fastest-growing smartphone market in the world. 

20. 1.42 Lakh Gram Panchayats are connected with optical fiber under the BharatNet programme which seeks to bring internet connectivity to all villages. The programme is closely linked to the Digital India mission as well as the plan to create Digital Villages to complement the smart cities model. As of now, there has been no progress on the digital villages front beyond the announcement. 

21. The new education policy lays emphasis on digital education and remote learning opening doors for edtech startups, where they can help schools, students and teachers in providing a seamless experience, thereby enabling students to identify their interest areas and skills.

22. In terms of gender diversity across workspaces in India, just 9% of the board members of the top 20 unicorn startups in India are women. To boost participation of women entrepreneurs in the startup ecosystem, 10% of the INR 10K Cr Funds of Funds has been reserved for women-led startups.

23. During the pandemic and the resultant lockdown, India crossed 500 Mn internet users with 504 Mn active internet users, backed by a huge surge in rural and semi-urban users.

24. The Indian tech industry has grown to become one of the largest startup ecosystems in the world. In 2019 alone, Indian startups raised over $12.7 Bn and by 2021, startups are likely to cross the $15 Bn mark in terms of funding too. Backing the investors are over 200 incubators and accelerators that are crucial in identifying sources of innovation early on. The likes of Nascomm’s 10000 Startups, Kerala Startup Mission, Maker Village, T-Hub in Telangana, BIRAC, Bhamashah Technology Park in Rajasthan and more have led the path for incubators in India. 

25. In March 2018, SEBI had rolled out a list of top 1000 listed companies which were mandated to appoint at least one woman director in their board by March 2020. As on December 31, 2019, 977 of that top 1,000 companies had a woman director, and 835 of them had a women independent director. This is a sharp jump from 379 women directors and only 193 women independent directors back in March 2014.  In 2018, these top listed companies appointed 974 women directors overall, and 660 female independent directors.

26. According to the latest report published by the Internet and Mobile Association of India (IAMAI), 65% of the Indian internet users are male while the remaining 35% are female. 

27. In June 2019, B2B ecommerce platform IndiaMART joined the likes of MakeMyTrip, Justdial, Matrimony, Info Edge and others as a public listed tech company. IndiaMART posted over 64% increase in net profit at INR 74.6 Cr in Q1 FY 2021.

Policy Moments

28. To ensure steady and quick medical services for even those stuck at home and unable to venture out, the Indian government launched a set of guidelines for telemedicine or remote healthcare on March 25, 2020, the same day as the lockdown began. With the guidelines in place, many more startups have emerged in this field to fix the access gap. 

29. After years of court battles and legal hurdles and despite rising adoption for epharmacies, online pharmacy startups still await guidelines and clarity on regulatory aspects. That has not stopped new players from launching services. Amazon has entered the fray recently, with talks of Reliance Jio acquiring Netmeds. Most recently, The Internet and Mobile Association of India (IAMAI), which also represents epharmacies, urged the government to launch guidelines in June 2020 in line with its promises.

30. It is safe to say that India’s journey with digital payments truly only began in November 2016. While digital payment wallets and gateways existed well before 2016 too, the demonetisation which was announced on November 8, 2016 catapulted India into digital payments overnight. Backed by the success of UPI apps, individuals, service providers and merchants in Indian metros, Tier 1 cities and many Tier 2 cities these days all support cashless transactions through a variety of platforms.
Besides this, since 2002, the RBI has been planning the development of the payment systems under RBI’s vision document for the payment and settlement systems in India.

The latest vision document came in May 2019, emphasising on innovation, cyber security, financial inclusion, customer protection and competition. envisaged building best-in-class payment and settlement systems for a ‘less-cash’ India. Quantifying the growth, RBI said that digital payment transaction turnover vis-à-vis GDP (at market prices-current price) increased from 7.14% in 2016 to 7.85 in 2017 and further to 8.42 in 2018.

31. After more than a year of discussions, the government now claims there is no definite timeline for introducing the national ecommerce policy, which was proposed in 2018. In early 2019, DPIIT had released the draft ecommerce policy, proposing data localisation and streamlining of ecommerce operations in line with FD! rules. 

32. In April 2018, the Indian government announced the formation of a 13-member task force to work on the policy regarding manufacturing and licensing of drones, airspace and air traffic management and more. The drone policy, named Drone Regulations 1.0, came into effect from December 1, 2018. In January 2019, India released the draft note for Drone Regulations 2.0.

33. The estimated market opportunity in the vernacular content segment in India is $53 Bn (2021) and given the lucrative market opportunity, the government and tech giants have ramped up investments for regional language-focussed startups. In its $10 Bn Google For India Digitization Fund, Google said a portion of the money would be invested in regional language platforms, while the ban on Chinese apps in June 2020, has added a stronger spotlight on this segment.

34. Among the controversial reforms by the government despite its push for startups, the angel tax or Section 56 (2) (vii)(b) of the Income Tax Act is definitely on the top of the list. It ruled that a privately held company issues its shares at a price more than its fair market value, the amount received in excess of the fair market value will be taxed as income from other sources. Since November 2018, more than 2,000 startups that had raised money since 2013 got notices from tax authorities and though the situation has been clarified for DPIIT-registered startups, many of those which are not will continue to be targetted by angel tax. Like clockwork, every year, startups call for the government to ease the rules and relax the tax burden, but the ghost of angel tax continues to linger on.

35. India launched the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme for a two-year period at an approved outlay of INR 795 Cr in 2015. The scheme, extended till September 2018, focussed on technology development, demand creation, pilot projects and charging infrastructure. Under phase II, India is planning to extend financial support of INR 8,730 Cr to EV industry for three years. 

36. On May 16, 2020, the government announced a technology push for private sector participation in the defence and space sectors which plans to link the startup ecosystem with the nuclear sector, as part of the larger reforms to boost the economy in a post-Covid-19 world. Finance minister Nirmala Sitharaman announced separate budgetary provisions for procuring only India-made defence items, a hike in foreign direct investment limits, private sector participation in outer-space travel and inter-planetary exploration and technology incubation centres for private companies linked to nuclear research.

37. The Startup India policy is not only about enabling existing businesses. It enforced a slew of policy reforms such as funding support, bilateral government collaborations with various countries, and consistent messaging of hope and pride in Indian technology, products and services. Post the launch, 26 state governments also released their own startup policies, with state-sponsored Atal Incubation Centres driving grassroots innovation since 2016.

38. Recognising the double taxation issue in the case of employee stock option plans (ESOPs), finance minister Nirmala Sitharaman announced at the FY 2020-21 Union Budget that tax at the time of exercise can be deferred by up to five years or till an employee leaves the company or when they sell their shares, whichever is earliest.  However, going through the Finance Bill 2020, soon it became clear, that the ESOP-related announcement will benefit just about 250 startups in the country in contrast to the over 55K startups in India. 

39. Established in January 2009, the Unique Identification Authority of India (UIDAI) and the 12-digit Aadhaar ID have changed the game for billions of Indians. With direct delivery of financial and other subsidies, linkage to financial accounts and mobile numbers, Aadhaar has become a central part of many digital services in the fintech and banking sectors. However, Aadhaar has had a controversial life with several database leaks emanating from government departments. Plus, the rampant linking of Aadhaar to different branches of the government have led to privacy concerns from civil and legislative bodies. 

40. After transforming fintech and banking through the India Stack project, the next agenda for India is the National Health Stack, which seeks to transform healthcare just as India stack did for fintech. Will structured data with consent layers baked into it allow the National Health Stack to finally bring India’s ailing healthcare infrastructure up to date with the times? The National Health Stack, which is a set of essential APIs, recently went live for testing. When implemented in the right manner, it will make telemedicine and other healthtech possibilities a reality with safety, interoperability, security and reliability being the primary pillars.

Envisioning a cohesive future for healthcare, dozens organisations and companies — National Cancer Grid, Swasth Alliance, LiveHealth, DRiefcase and others — have begun testing the newly built National Health Stack APIs in the past few weeks. But there’s still a long way to go before there’s full-fledged innovation built on the health stack.

41. The Covid-19 pandemic has further pushed the telemedicine and teleconsultation in India, Though the data for the same is still unavailable, but PM Modi had come on record to say that telemedicine and teleconsultation are at the same path of success as digital payments with growing numbers and integration, however, there is still scope of innovation here.

42. The crowning glory of India’s many fintech-related developments, the unified payments interface or UPI is a real-time instant payments system for individuals and merchants. Since April 2016, UPI has become the de facto face of digital payments. UPI has witnessed over 1,029 Cr transactions until August 2019 with a total of INR 17.29 Lakh Cr (or $240 Bn) processed since its launch.

43. It would be impossible to recount the various taxation reforms over the past 73 years, but the biggest changes in recent times came last year with the Taxation Laws (Amendment) Ordinance 2019 passed in September 2019. India slashed corporate tax rates to 22% for existing domestic companies and 15% for new domestic manufacturing companies. Other measures were also taken to grant tax relief to corporates, thereby making the total revenue foregone estimated at INR 145K Cr ($20 Bn).

While providing relief to some Indian companies, India is also looking to increase its share of revenue earned through tax from tech giants such as Google, Facebook, Twitter, and Amazon. All of these have massive audiences in India, but while they generate revenue in the country from digital services, the businesses operating these services often are not located in India. Businesses without any physical presence in India may reportedly have to pay a 30-40% digital tax for the revenue generated from sale of digital services. 

44. On July 1, 2017, the Goods and Services Tax (GST) was rolled out for all businesses and professionals in India. With the motto of ‘one country, one tax’, the GST regime envisioned India as a single commercial union. It was the biggest tax reform (in the indirect taxation) in India’s history and while the repercussions of such a big change and the implementation are still being felt, many economic experts believe that it was a necessary step for the Indian economy. Announced in 2000, the GST took 17 years to come into effect.

It consolidated levies such as State Value-Added Tax (VAT), Central Excise, Service Tax, Entry Tax or Octroi, Customs Duty, Central Surcharge & Cess, Luxury Tax, Entertainment Tax, and Purchase Tax along with a few other indirect taxes.

45. In January 2020, the Niti Aayog released “Blockchain: The India Strategy – Towards Enabling Ease of Business, Ease of Living and Ease of Governance” discussion paper which sought to maximise the potential of blockchain for India’s needs. The paper delved into the functional definition of the entire suite of blockchain or distributed ledger technologies along with legal and regulatory issues and other implementation prerequisites, specific use-cases for Indian market. 

46. Among the most recent policy decisions to boost the Indian logistics and transport sector and create efficient channels for movement, India announced a new National Logistics Policy at the Union Budget 2020-21. The National Logistics Policy will clarify the roles of the government and key regulators and will look to create a single-window e-logistics market and focus on the generation of employment and skills.

It includes plans to develop 2500 Km access control highways, 9000 Km of economic corridors, 2000 Km of coastal and land port roads and 2000 Km of strategic highways. Together, these have contributed to the rise of ecommerce and logistics as major sectors in the Indian market. The quick turnaround time for delivery in metros is another indicator of how far India has come in the past few years. 

47. While there are plenty of positives to take away from India’s flourishing startup ecosystem, job security and stable employment are not among them.  The 24,848 DPIIT-recognised startups have together created over 3.06 Lakh jobs, under the Startup India scheme. But the high incidence of failed startups in the early and growth stages have made startup job losses ubiquitous and commonplace. The current Covid-19 pandemic has also had an impact on hiring and contributed to job losses. As per DataLabs estimates, the average percentage of layoffs in the total workforce in Indian startups is 22% between April and June 2020.

Bharat Moments

48. With the Startup India push, entrepreneurship has been a major agenda for colleges and universities and at the grassroots level in villages and rural India. A study by US mergers and acquisitions broker Latona last November revealed that India offers the fourth-highest level of business training and education in schools. The US-based company analysed the major startup ecosystems around the world on key indicators of entrepreneurial potential to reveal the world’s most entrepreneurial nations. India had a score of 7.41 out of 10, which showed positive growth in terms of innovation and upskilling.

On the rural level, the MSME ministry launched the SIDBI-administered ASPIRE Fund in October 2016 with a corpus of $8.9 Mn (INR 60 Cr) to promote entrepreneurship in rural India. Further, to improve the technology adoption by rural industries, the government envisions setting up 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) to develop 75,000 skilled entrepreneurs in agro-rural industry sectors.

49. As India is struggling to fight against the global pandemic, Indian startups have been arming the nation with their tech solutions. Whether it’s healthtech, supply chain or even grocery deliveries, Indian startups have been working hard to ensure that India services remain undisrupted even as the Covid cases are rising. Over the few months, NITI Aayog has onboarded startups to develop healthtech solutions and ventilators to boost India’s healthcare infrastructure, while the IT Ministry is relying on startups to make indegenious video conferencing solutions. 

50. From floods in Orissa, Kerala and Chennai to the massive problems posed by Covid-19, startups have not only managed to keep innovating but have also contributed when they can. Most recently, many startups pitched into the various government funds for pandemic relief and also undertook social impact activities to help the needy in the times of crisis.

51. The Skill India Mission has been a cornerstone policy in the Indian government’s digitisation efforts. This year marks five years of Skill India Mission and over 1 Cr youth have enrolled under the initiative on a yearly basis. Till now, 67 lakh people have been trained, while 4.45 Lakh trainees have been given apprenticeship training every year, the government announced last July.

52. Acknowledging the recent innovations by fintech startups, the Reserve Bank of India (RBI) has released a draft ‘Enabling Framework for Regulatory Sandbox’ in 2019 that will allow fintech startups to test within a regulatory sandbox (RS). It’s said to be a stepping stone for the open banking standards that the neobanking segment desperately needs to fully innovate in the banking and financial services industry.

Backed by some private sector banks, startups are providing ‘open banking’ or ‘API banking’ services, which is essentially a “banking as a service’ model for plug-and-play models. However, a standardised open banking model will be the biggest enabler in the future of BFSI.

53. In the past 5 years, the Indian government has come up with a wide array of startup schemes and startup funds to encourage launch and growth of startups in the country. Over 50 startup schemes have been floated by the Indian government to date to support the Indian startups, SMEs, MSMEs, research institutes, incubators, accelerators and other enablers. The schemes have not only brought more grants and capital, but have also help startups secure patents more easily for their innovation. The number of intellectual property rights (IPR) filings from startups have nearly doubled in six years from 4,000 to 4,500 IPR filings per year.

54. In August this year, the government commissioned Niti Aayog to develop a network of banks and fintech companies who could give small-ticket loans to bottom-of-the-pyramid borrowers such as farmers, street vendors and labourers by utilising the existing direct benefit transfer (DBT) infrastructure. Fintech startups such as PhonePe, Kissht and Pine Labs are also said to have been part of the government’s review meetings for the proposed scheme.

55. Prime Minister Narendra Modi on August 15, 2020 launched the tech-based National Digital Health Mission (NDHM), under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY), to revolutionise the Indian health sector. Each patient would be given an ID card, which was based on similar models as seen in the likes of UIDAI and GSTN. The card will include confidential medical data such as prescriptions, diagnostic reports, discharge summaries and more. The initiative will also allow the patients to access health services remotely through teleconsultations and epharmacies while offering other health-related benefits.

56. Startup funding in Tier 2 and Tier 3 cities improved by 3.2x in 2019 ($243 Mn) compared to 2014 ($74 Mn)

57. 219 startups in Tier 2 and Tier 3 cities raked in total venture capital funding of $1.03 Bn (2014 to H1 2020) 

58. New startups in Tier 2 and Tier 3 cities are getting funded at a CAGR of 21%. Only 20% of the total funded startups in India are based in Tier 2 and Tier 3 cities, with over 5,800 startups in Tier 2 cities. The total funding for startups from Tier 2 cities alone is $1.3 Bn (2014-Q1 2019). However, when compared to Tier 1, there is a clear imbalance in startups and funding in Tier 2 and 3 cities.

59. The Indian government launched a National Seed Fund in the union budget of financial year 2020-21 to support ideation and development of early stage startups. The credit guarantee scheme will enable the startups to raise loans for their business purposes. Besides this, the RBI has added startups to the list of priority sector lending (PSL), which will allow them to borrow capital from banks smoothly.

60. Created under the Startup India programme, Atal Incubation Centres and Atal Tinkering Labs are dedicated works spaces where school students learn innovation skills. The labs are powered to acquaint students with state-of-the-art equipment such as 3D printers, robotics & electronics development tools, IoT and sensors.

In a bid to impart artificial intelligence (AI) basics to students, the National Association of Software and Services Companies (NASSCOM) has launched an AI-based educational module for school students. In collaboration with Niti Aayog’s Atal Innovation Mission (AIM), the programme is expected to teach AI to around 2.5 Mn students associated with Atal Tinkering Labs (ATL).

According to a recent study, the revenue of the AI industry was also doubled in 2019 from $230 Mn in 2018 to $415 Mn in India. Moreover, a PwC study estimates that the AI industry is expected to reach globally to $15.7 Tn with India having a noticeable share of this industry.

Global Moments 

61. With Startup India, businesses in India got access to global markets and knowledge through bilateral government collaborations with Russia, South Korea, Portugal, Japan, Netherlands, United Kingdom, Sweden, Finland, Israel, and Singapore. This also brought in a wave of new investors to the Indian startup ecosystem. The likes of Sequoia Capital, Softbank, Tiger Global, Accel Partners have launched new funds with Indian startups on their targets.

Plus, over the years, new venture capital firms such as Peter Thiel’s Mithril Capital, which invested in GreyOrange in 2018, Cleartax investors Morningside Venture Capital, China’s oldest VC firm and Ola backers Hong Kong’s Sailing Capital have also made their way to India. In 2019 too, India saw new venture funds from the likes of 3One4 Capital, AngelList India, 100X.VC and corporate venture funds Microsoft M12 and Samsung Venture Investment Corporation.

62. With the coronavirus lockdown forcing people indoors, many individuals suddenly found themselves with a lot more free time and many jumped into career changes by following their passion to make a living. Skills, interests and hobbies are being thrown under the spotlight, as the newfound passion economy stretches from experts conducting online fitness or dance classes to curated newsletters to podcasts and vlogging collabs to content pieces such as videos or expert articles.

With the emergence of the passion economy has come a new wave of growth for platforms such as Substack, Patreon, OnlyFans, Masterclass, MasterSchool, Medium, upGrad, Unacademy as well as mainstream options like Twitch for gamers, Spotify for podcasters and YouTube and Vimeo for creators who want the largest reach.

63. The rising prominence for OTT platforms has not only brought a veritable threat to the established distribution market in the entertainment industry, but the independence of many of these platforms has been a godsend for Indian consumers from the point of view of content. The OTT wave has given rise to a wave of indie directors, producers and artists that have enriched India’s already vibrant movie and TV show landscape. One impact from the autonomy of OTT video platforms in India is that viewers are largely attracted by uncensored content on OTT platforms in India. This also gives producers a free rein to experiment with content.

64. The Indian government has banned 106 Chinese app since June 2020 and barred public and private entities from trading with Chinese companies, which has increased the opportunities for Indian startups to set their mark in their respective segments. Video conferencing and short video apps are one of the few segments which has registered a high growth for Indian alternatives.

65. India was elected as non-permanent member of the UN Security Council for a two-year term after winning 184 votes in the 193-member General Assembly, thereby increasing the country’s standing in global trade and taxation policy debates. 

66. Over the last five years, global tech giants like Facebook, Google, and Twitter have also bought Indian startups to expand their offerings or boost their already existing portfolio. For instance, Google acquired popular transportation app Where is my Train, Twitter acquired mobile marketing and analytics company ZipDial, and Facebook acquired Little Eye Labs.

67. With India’s digital growth, Indian startups have not only become the number one destination to expand the market but also to make investments. Besides acquisition, global tech giants ranging from Amazon to Microsoft have also been eyeing on Indian startups through investments, accelerator programmes and other mentorship programmes. 

Hyperlocal Bubble, Atmanirbhar Bharat & More

68. India’s hyperlocal market is expected to have reached a value of INR 2,306 Cr by 2020. This time around, unlike the hyperlocal bubble of 2016, startups in the hyperlocal space are not only focussing on lowering delivery cost and increasing margins, but also not expanding recklessly. The hyperlocal wave is being led by Dunzo, Zomato, Swiggy, Flipkart and others in the current day-and-age, but the sector saw massive upheaval in 2016 with over 400 startups recorded and 100+ startups shutting shops, including PepperTap, TinyOwl and others. 

69. A study by Bain & Company done in collaboration with online retail giant Flipkart suggests that India has nearly 100 Mn online shoppers. The number is expected to grow to 300 Mn – 350 Mn by 2025 with a GMV of $100 Bn. The report adds that these 200 Mn shoppers will majorly come from Tier II and beyond regions, noting the next phase of the ecommerce growth. The report added that Tier 2 and below markets already see three out of five online orders being shipped to them. 

70. Further reiterating the Make In India initiative, PM Modi came up with Atmanirbhar Bharat vision to make India self-reliant as the economy is struggling due to the Covid-19 pandemic and the resultant restrictions. With self-reliance in mind, the Indian government is trying to boost more local solutions as opposed to non-Indian products and services. The ban on 106 Chinese apps has further pushed Indians to look for more Indian solutions. 

71. While we are discussing the Atmanirbhar Bharat vision, it is important to note that the Make In India campaign has also had its role to play in boosting Indian economy and incentivising production in India. One of the biggest examples here is China-based Xiaomi, which claims that 99% of its smartphones are made in India. After the government banned its browser and community app, the company is now looking to develop its MIUI software in India as well.

The Make In India campaign catapulted India to the fastest growing smartphone market in the world, and helped it to surpass the US to become the second largest smartphone market in the world. With more and more electronics and parts being manufactured in India, India will get first access to these technologies as has been the case with China for over two decades. According to Datalabs by Inc42, manufacturing and industrial SaaS solutions as well as deeptech products and services will play a pivotal role in advancing the “Make In India” mission seeing as automation and digitisation are key to increasing the overall productivity in manufacturing.

72. One of the major indicators of digital transformation in India is the rise in the number of internet subscribers in India. From around 233 Mn in 2014, India today has over 504 Mn active internet users. Much of the credit for this goes to the launch of Reliance Jio, which completely changed the telecom and mobile internet game in 2016. As of July 2020, TRAI reported 676 Mn broadband subscribers in India, including both wireless and wireline connections. Further, India has over 1.14 Bn mobile subscribers, out of which 629 Mn are based in urban areas.

73. The government launched the GeM (Government-e-Marketplace) in August 2016 to facilitate online purchases of goods and services by all the central government departments and ministries. The initiative was also used to further boost the Make in Indian initiative.

74. As indicated by former finance minister, the late Arun Jaitley in his Union Budget 2018 speech, the Indian government’s think tank Niti Aayog has been working on a roadmap for National AI programme. The Indian National Program for AI will be geared towards developing new applications of artificial intelligence technologies such as machine learning, natural language processing and more. More recently, in May 2020, IT minister Ravi Shankar Prasad launched the one-stop digital platform for all artificial intelligence (AI)-related developments in India.

The portal, ai.gov.in, will facilitate the sharing of resources highlighting the depths and usage potential of AI. This would include information on startups, investment funds, resources, companies, education institutions and other resources related to AI in India. The portal will share documents, case studies and research reports, among other useful study material. It will also host a section for online learning and skill development as well as new jobs in the AI segment.

With inputs from Kritti Bhalla and Nikhil Subramaniam

The post #StartupIndia: 74 Defining Moments From India’s Startup Ecosystem In The Last 5 Years appeared first on Inc42 Media.