India is the new hotbed for startups on the Asian continent. According to a report by Ernst & Young, the total VC investment value in India grew from US $1.5 billion in 2011 to US $1.8 billion in 2013, whereas VC investments in China declined.
Large VC funds such as Tiger Global, Sequoia Capital, Investment AB Kinnevik and DST Global are now stronger in India than any other global market, as more and more opportunities for venture capital and consulting burgeon inside India as well.
The Organization for Economic Cooperation and Development (OECD) has just published data undermining this as an upward trend. According to the Paris-based think tank, the Indian economy saw the “strongest growth” in the first quarter of 2015 among the G20, including China, the US, Germany and Canada. It grew to 2.1%, up from 1.4% in the previous quarter.
Why is India faring so well in the startup scene?
There is a lot of room for growth
India — as a market — is still emerging, and there are hardly any category leaders here, so there is a lot of room for new players. Over the past two years, new startups with innovative ideas have come to the forefront. Multiple players encourage innovation and bring down product and services costs, hence making them accessible for larger parts of the population.
Comprising most young people in the world
According to a UN report from November 2014, India has the world’s largest youth population. Around 356 million Indians are 10-24 years old and many of them are either digital natives or keen to use the internet and smartphones – the hub areas for startups.
Many youngsters decide to embrace the new digital opportunities by either boosting existing startups, using their services or even creating their own company. This is being done for instance, by becoming a self-employed driver of a taxi app network or receiving help from 1&1 with registering a domain; in turn growing into the market and improving brand awareness with regards to e-commerce or the blogging sphere.
Many Indian entrepreneurs are savvy with Western laws and culture
Due to the mass migration of Indian graduates from premier educational institutions like IITs and IIMs, it was a blessing in disguise that they would later work in tech majors such as Google and Microsoft in the US in the late 1990s and early 2000s, as their work experience helped them understand the nuances of the US market.
This prompted large VCs in the US and other developed economies to come and invest in Indian startups, as many of the returnees became entrepreneurs themselves and used their knowledge and contacts to attract investors.
And of course, Indians generally speak great English, giving them a huge advantage to many other Asian markets when it comes to cross national products.