The extraordinary rise of Indian start-ups

India settles at VivaTech. Last year, Prime Minister Narendra Modi attended the event by videoconference – health circumstances dictate it. This year, the second most populous country in the world (1.3 billion inhabitants) is the guest of honor at the show.

The Minister of New Technologies, Communications and Transport, Ashwini Vaishnaw, had the opportunity to stroll through the corridors of Pavilion 1 of the Paris Expo, Porte de Versailles, and to visit the Indian pavilion which houses about fifteen young people shots. One hundred entrepreneurs and digital experts are on site during the event.

This massive representation reflects the emergence of the Indian ecosystem, as dynamic as it is unknown in France. The figures are dizzying: India now has more than one hundred unicorns – against 27 in France – whose cumulative valuation amounts to 332 billion dollars.

A hot ecosystem

In 2021, Indian startups raised $ 35 billion from investors. Among them, 44 joined the unicorn pack, followed by 16 new ones this year … Sign of the times: Flipkart, India’s largest start-up (valuation of $ 37.5 billion, with Walmart majority in the capital ), is preparing its IPO in the United States.

“There has been a great deal of improvement in recent years to foster innovation, understand the market better, develop ideas and then test them,” decodes K Ananth Krishnan, the global technology director of TCS (Tata Consultancy Services), a technology giant. which collaborates with around 3,000 start-ups around the world.

I expect to see a lot of zombie unicorns.

Anand Lunia, partner of India Quotient

However, the ecosystem is suffering from the cooling of the venture capital market. In recent weeks, several large Indian start-ups have been forced to cut jobs (Vedantu, Cars24, Ola, Meesho, etc.) and big rounds are becoming rare.

“We haven’t seen such a slowdown in at least five or six years. It will be brutal, “comments Anand Lunia, partner of India Quotient, which has invested in more than 70 start-ups since 2012.” I expect to see many zombie unicorns, “he predicts, referring to companies whose economic model is fragile and risky. to stall. “In the cycle of innovation, there are always ups and downs”, tempera K Ananth Krishnan, convinced that the best is yet to come.

Even if a cleanup is done to correct the excesses, investors retain their appetite for India. The American venture capital giant Sequoia, for example, has just raised a specialized fund in India and Southeast Asian countries for $ 2.85 billion.

Serious goods

It is true that the country has serious resources to build tech giants. It has a unified market – although Indian states are culturally and religiously diverse – recognized know-how in computer science, command of English among the elites and competitive technology hubs, such as Bangalore, Delhi or Bombay.

The ecosystem also has privileged links with the United States, and in particular with California, a land of natural expatriation. The prestigious universities of Stanford, Berkeley or UCLA are an inexhaustible supply of students from the subcontinent.

Some then return to the country to start companies, others take root in the United States. Several American tech giants (IBM, Google, Microsoft, Twitter, Adobe) are run by Indian or Indian-born bosses. The latter do not hesitate to reinject some of their money into India.

Of the large French start-ups, few venture into the country. BlaBlaCar launched its carpooling service there in 2015, Meero, the platform that connects professional photographers and businesses, opened an office in Bangalore in 2019, OVH is also gaining momentum there.

“Five years ago we acquired VMware’s cloud business, which had offices in India,” recalls Lionel Legros, Asia-Pacific region manager for the cloud giant. Today we have around sixty employees in Bangalore and Bombay. A sign of its ambitions, OVH will open its first data center in India later this year and is working with local start-ups as part of an incubation program.

Sendinblue, atypical case

The most Indian of the Next40 scale-ups remains Sendinblue: it is in this country that the digital marketing specialist was born in 2007, often cited among the potential unicorns of French Tech. Armand Thiberge, his boss, started his professional career there and co-founded Sendinblue with an Indian partner, Kapil Sharma (who later left the company). The start-up has more than 100 employees in this country.

In general, fast-growing French start-ups favor expansion in Europe and the United States. Despite its great potential, India is perceived as a complicated country to approach if you don’t have strong connections in place. There are also obstacles to overcome. “It is a highly regulated market because they want to produce locally, emphasizes Lionel Legros. Telecommunications costs have also been very high, but progress has been made. “

Create bridges

The Indian presence in France is also limited. “In the past we didn’t have enough contacts with French universities and start-ups. But we want to accelerate ”, insists K Ananth Krishnan, who announced the creation of a center specializing in innovation in Paris (Pace Port). India’s invitation to VivaTech should make it possible to break down mental barriers and open development prospects for the future.

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