This article has been contributed by Karan Gupta, Co-Founder and Director, KAPSO.
In the dynamic world of 2024, the startup ecosystem is a kaleidoscope of innovation, shaped by the interplay of global trends and local movements. This article ventures into the heart of this interaction, examining how global forces are influencing local startup environments and vice versa. For instance, a notable data point in this landscape is the growth in AI startup investments, which has seen a compound annual growth rate (CAGR) of 44% since 2020. This statistic exemplifies the global thrust in technology, inspiring local ecosystems worldwide to adopt and adapt AI and ML innovations to meet specific regional needs.
The article provides an in-depth perspective on the evolving startup scenario, highlighting the unique intermingling of global and local dynamics shaping the future of entrepreneurship.
Globally, Artificial Intelligence (AI) and Machine Learning (ML) continue to be the linchpins of technological advancement. For instance, investments in AI startups globally reached unprecedented levels, with a 2023 report from Statista showing a compound annual growth rate (CAGR) of 44% in AI startup funding since 2020. This global thrust is inspiring local ecosystems to integrate AI and ML into their businesses, tailored to address local challenges.
Local Innovations with Global Impact
In regions like Southeast Asia, Africa, and Latin America, startups are addressing unique local challenges, which often lead to globally scalable solutions. For instance, mobile payment solutions, initially designed to address the lack of banking infrastructure in Africa, are now being adopted worldwide. In 2023, mobile payments in Africa surged, accounting for over 60% of all global mobile money transactions, as per the GSMA.
Emerging Market Dynamics
The growth trajectory of startups in emerging markets is particularly noteworthy. For example, India’s startup ecosystem, valued at $95 billion in 2023, is expected to grow at a CAGR of 12-15% over the next five years, as per a NASSCOM report. This growth is reflective of how local movements can gain momentum and influence global market trends.
Investment Trends and Local Ecosystems
The investment landscape has witnessed a shift towards more diversified and balanced ecosystems. In Europe, for example, VC investment in startups reached €40 billion in 2023, with a growing inclination towards sustainability and green tech startups. This mirrors a global trend of investing in environmentally responsible businesses.
Regulatory Environments
The global and local regulatory frameworks are increasingly intertwined. GDPR in Europe has set a precedent globally, influencing data privacy laws in other regions. Local startups are navigating these global influences while aligning with local regulatory requirements.
Consumer Technology Advancements
Globally, consumer tech startups, especially in areas like smart home devices and wellness apps, are influencing local consumer behaviors. In 2023, the global smart home market was valued at $80 billion, with a projection to grow at a CAGR of 25% over the next five years, impacting local markets significantly.
Data-Driven Strategies
The global emphasis on data and analytics is mirrored locally. Startups worldwide are leveraging data to understand both global trends and local consumer behavior, aiding in strategic decision-making and innovation.
E-Commerce Evolution
The global evolution of e-commerce is significantly influencing local markets. The worldwide e-commerce sales, which hit $4.2 trillion in 2023, are driving local startups to innovate in online retail and supply chain management, reflecting global best practices adapted to local consumer preferences.
The Impact of Pandemics and Global Crises
The recent global health crisis has accelerated certain startup trends. Telehealth, digital learning, and remote work solutions have seen unprecedented growth. For instance, in 2023, global investment in telehealth startups exceeded $10 billion, a 200% increase from pre-pandemic levels. This global trend has encouraged local startups to innovate in telemedicine and e-learning, addressing the immediate needs of their communities.
Sustainability and Green Tech
A growing global focus on sustainability is influencing local startup ecosystems. Startups specializing in renewable energy, sustainable agriculture, and waste reduction are gaining traction. This is particularly evident in Europe and North America, where green startups received over 25% of total startup funding in 2023, a significant increase from a decade ago.
There’s an increasing recognition of the importance of diversity in the startup world. In the U.S., for instance, women-led startups raised 15% of all venture capital in 2023, up from just 2% in 2015. This global trend is encouraging local ecosystems to support more diverse founders, leading to a more inclusive and innovative startup culture.
Localized Solutions for Global Problems
Startups are increasingly focusing on localized solutions for global problems like climate change, poverty, and healthcare. For example, startups in Africa are leveraging local resources and knowledge to create solutions for water scarcity and agricultural challenges, which have global applications.
Integration of Traditional Industries with Tech
Globally, there’s a trend of integrating traditional industries like manufacturing, agriculture, and retail with technology. This is leading to the rise of ‘tech-enabled’ startups in local markets, which combine traditional business models with new tech to improve efficiency and reach.
In conclusion, the year 2024 stands as a testament to the symbiotic relationship between global trends and local startup movements. The startup ecosystem has evolved into a dynamic arena where global innovations and local creativity feed into each other, driving a cycle of continuous growth and adaptation. This interplay not only enriches the global startup landscape but also empowers local markets to contribute significantly to the global narrative of innovation. As startups continue to navigate this interconnected world, their journey will undoubtedly be marked by the exciting fusion of global foresight and local ingenuity.
Startups are now ruling the business world, wherever you look, you’ll find one. It is becoming a crucial part of every country. There are people out there ready to invest in startups that look promising to them. Investing in a startup company can reward investors both physically and financially. It is also very risky as well, you are not exactly sure if that Startup is going to survive or not.
Although there is a huge number of startups that are creating a name for themselves in different industries but not every one of them makes it till the end. Of course, the reward is fascinating but the risk of losing the entire money is also there. The feedback on investing money in Startup Companies is immeasurable. So, there are many things for investors to keep in mind while investing their money in Startups.
According to a report, 90 % of Indian startups fail within the first five years. Hence as an investor, you must perform quality research before investing in startups. In this article, we will talk about some tips that an investor must follow before investing in a startup. So let’s get started.
To reduce the risks after investing in any Startup Company, the investor must know the domain in which the startup operates. This will help to attain potential success in investing. Always make sure that the startup company will grow and money will return back to the investor.
Be Mindful of the Founder’s Background
It is important to place the founders of the company in the right place as they are the ones to determine the company’s profits and success in the future. Especially for early-stage companies, founders are necessary for developing the path to success. If one product is made, it is tested by many members in the founder group and finally released. So, founders must have the right place to show their talents to lead the company. Thus, the investor needs to focus on the founder’s background story. The story includes which companies, the education they are previously coming from and what type of value they bring to the table.
Invest Your Money in Different Industry
The best way of reducing the risk of investing is multiple investments of money on different field tracks. This will increase the possibilities of success and will help to reduce risk. It will also increase the chances of getting money back with some profit or an offer by another company. This type of investment gives a result from the long gap. So, investors patiently wait for their turn and attain great heights in business.
Learn how to invest by joining another group
When investors are struggling with how to invest money in Startups, they can simply join other members online and invest a part of the amount. Investors must learn by analyzing different deals made by another member to determine what makes them a proper investors. It is important to understand the market before making any type of investment.
Analyse the type of competition held on markets
Analyze what type of competition is there among market investors. Investors are suggested to invest their money in the beneficial domain. First, the investors should analyze the customers, what they wish and what they want. Feedback is the key for the startup to develop the project at the right time. The investor must be very careful and analyse the market properly.
Find Out if the Startup Is Ready to Face Challenges
Not every time, things will go as planned, unforeseen circumstances can be a part of the journey of a startup, so the investors must analyse if the startup will be able to change its way, according to the circumstances so that they can survive the upcoming challenges.
Keep an Eye on Investing Money
Investors must keep an eye on investing money. They must watch for what purpose and how their money is spent. The investors must know that their invested money satisfied or reached the milestone of their startup company.
Examine the Legal Documents
It is an important thing for each investor to review the legal documents because sometimes cheating occurs when investing in a startup company. This may involve how the company is structured and who is involved. The investors must know the structure and ancient history of a particular startup company and what percentage of ownership in the company they are receiving depending upon the amount of money that they are investing.
Main Parameters for Investing
The first parameter for investing in startup companies is product or technology. The investors should be aware of what type of product is being developed by the Startup. They should also know, what type of problem occurs and when it occurs during investing money.
The second parameter is the team. The investor should know the team which works for them and whether they work efficiently or not. They carefully choose the associates and workers in a team.
The third parameter is scalability and competitive advantage. It means that can the business scale efficiently and cost-effectively. Investors should be aware of the business can be cost-effective or not. It decides if the investor is suited for the business or not.
The fourth parameter is the market. The investor should know the size of the market and how it reaches customers. They must know the number of people who really use their product efficiently.
Conclusion
If you are investing in a startup for the first time, then you must follow the above tips. Apart from that if you are not good at finance and laws, then it’s better to take advice from experts regarding stocks, bonds, shares, and other startup-related things. Last but not least, do invest in a startup first then measure the progress and learn from the mistakes.
FAQ
How do Investors Invest in Startups?
Investors create a partnership between the company and themselves.
Is it Good to Invest in Startups?
Investing in startups can be risky, if the startup turns out to be successful, the reward is great but if the startup fails, the investors lose their money.
Why do Most Startups Fail?
There are a number of reasons why most Startups fail, it includes money running out, choosing the wrong business market, problems between founders, wrong way of marketing and others.
The concept of crowdfunding has just started to gain momentum in India. ‘Funding’ is the first problem new people, entering the world of business for the first time, find it difficult.
Startups have to turn to institutions and angel investors because there is a lack of funds for bootstrapping or a lack of help from friends or family. But banks tend to refuse business loans for first-time entrepreneurs and often ask for huge collateral. Sometimes, it’s difficult to convince investors also. That crowdfunding platforms can play a key role in helping entrepreneurs make the most of their ideas.
Crowdfunding is defined as a pooling of resources by a group of people for a common goal. In this concept, common mass is approached to raise funds for your idea execution, project, startup, or cause.
According to a survey conducted, less than 2% of the companies end up raising funds from professional investors. This is large because of reasons ranging from non-scalable businesses to the lack of exits. The rest 98% still need to raise funds to take their startup to the next level.
Some of the popular crowdfunding sites in India are Kickstarter, Wishberry, Indiegogo, FuelADream, Fundable, Ketto, Catapooolt, and Milaap which not only help Startups or individuals to launch a product but also test the acceptance of the product in the market.
If we compare the crowdfunding market in India to that of the United States, we are still considerably smaller. However, if estimates are to be believed, this can soon change.
Let’s see how does crowdfunding works in India for businesses and startups and its benefits.
In the donation model, individuals make a financial contribution to a project without any expectations of financial benefits.
Lending Model
In this model, individuals will lend money to the project with the expectation of being repaid under the terms and conditions agreed.
Reward-Based Crowdfunding
In reward-based crowdfunding, people contribute to your campaign and you give them a reward in return. The reward could be a DVD of the Film, The Gadget, etc. Equity cannot be given as a Reward.
Investment Model
In the Investment model of crowdfunding, the investor receives an equity stake in the project. Equity-based crowdfunding is not so common in India. Crowdfunding is becoming a lifeline for new entrepreneurs and small businesses as it helps them in many ways without losing much equity. Let’s see how crowdfunding helps startups and businesses in India.
How to Build a Crowdfunding Website or Platform in India?
Easy Steps to Create a Crowdfunding website or platform:
Find a Crowdfunding Niche
Choosing a niche helps to classify your site from others, and can also provide value to your campaign creators and sponsors. Every new crowdfunding website or platform is dedicated to a niche. That means that the website will host crowdfunding campaigns for one particular matter or kind of product.
This is due to the big platforms that are available to crowdfunding creators. There is no use in trying to compete with the bigger crowdfunding platforms on the internet because you will likely lose.
Use Crowdfunding Technology
Search for the right technology that you want to use for your Crowdfunding website. Not all technology is paid, but when it comes to running a successful Crowdfunding platform, you want to be sure that there are no faults so users have a great experience on your website.
You get what you pay for, if you use free Crowdfunding software, do not be surprised when something goes wrong with your website. Choosing a SaaS (Software as a Service) product can provide you with real-time support. This way you can get your site up and running fast, with as few issues as possible. And if there is a problem on the site, you are not left to your own to fix the issue.
Connect The Payment Gateway
It is usually best to open up a new bank account for the Crowdfunding platform if you are serious about taking a transaction fee on the donations to the website. If you were not already known, most Crowdfunding websites are taking a transaction fee on each donation to the campaigns on the site.
This is a great way to generate an income on the side, by utilizing Crowdfunding. Depending on the usage of the platform, a bank account can be set up and connected to the payment gateway to receive a transaction fee.
Add The Content
Once you are finished choosing the niche, platform, and connecting your payment solution to your bank account, next, is the most time-consuming step, adding the content to your platform. You should have access to the front-end source code, to manipulate the User Interface (UI) to your standards.
You will be restricted by the default UI and features from the product if you do not have access to the front-end source code. It is best practice to create all of the content, and have all of the images/videos ready before adding the content to the site. This can save a lot of time by simply copying and pasting the content onto the site.
Launch The Platform
Once the platform is all set up, the next step is to launch the platform. Before launching the platform, however, it is recommended to have Crowdfunding campaigns ready to host their campaign on your platform before launching.
The first handful of campaigns on your new platform is likely going to be from friends and family. If those campaigns are not available, you need to start searching for campaigns by joining online communities in your niche, and in the Crowdfunding industry.
Market The Platform
The website is finally created and launched on the internet. The last step is to market the platform. The whole idea is to market the Crowdfunding platform successfully so that many campaign creators are approaching you to create a campaign on your platform. This way, you do not have to do any work to make money. This can be a great solution for those that want to generate monthly revenue by simply approving or disapproving Crowdfunding campaigns.
Starting up a company is a very risky and challenging journey. Launching a crowdfunding campaign hedges these risks and serves as a valuable learning experience. Crowdfunding as it is today allows an entrepreneur to gain market validation and avoid giving up equity before going all out and taking a product concept to market.
Crowdfunding Saves Equity
Crowdfunding is a great alternative way to fund a venture and it can be done without giving up equity or accumulating debt.
Crowdfunding As Marketing Tool
An active crowdfunding campaign is a good way to introduce a venture’s overall mission and vision to the market, as it is a free and easy way to reach numerous channels.
Crowdfunding Proves The Concept
Showing investors and convincing yourself that your venture has received sufficient market validation at an early stage is hard. Crowdfunding makes this possible as people get to know about your product and show their response.
Crowdfunding Helps to Brainstorm Ideas
One of the biggest challenges for small businesses and entrepreneurs is to be able to cover all the holes that a venture might have at an early stage. By having a crowdfunding campaign, the entrepreneur has the ability to engage the crowd and receive comments, feedback, and ideas.
People who view the entrepreneur’s campaign and decide to contribute are ones that believe in the success of the company in the long run. In essence, these people are early adopters. Early adopters are very important to every business, as they will help spread the initial word without asking for anything in return. Such people care about the venture’s brand and message and are likely to be loyal customers throughout their life.
Crowdfunding is Easier Than Traditional Applications
Applying for a loan or pursuing other capital investments are two of the most painful processes that every entrepreneur has to go through, especially during the early stages of the company.
Crowdfunding is Free PR
The momentum created by successful crowdfunding campaigns attracts potential investment from traditional channels and attention from media outlets. Success stories make for interesting reading, and reporters are always hungry for them.
Crowdfunding Provides The Opportunity of Pre-selling
Launching a crowdfunding campaign gives an entrepreneur the ability to pre-sell a product or concept that they haven’t yet taken to market. This is a good way to gauge user reaction and analyze the market in order to decide whether to pursue or pivot on a given concept.
Crowdfunding is Free to Launch
Launching a crowdfunding campaign on some of the platforms is absolutely free. You will be charged a minimal fee when you raise funds.
This is the major step where most of the crowdfunding projects fail in India and the project creator never realizes it. As crowdfunding is a very niche stage in India, it is very important for crowdfunding platforms to help project creators in creating projects and help them to shape their projects for an Indian audience. Choose your crowdfunding portal wisely.
Every crowdfunding platform in India takes a different approach to projects. Do little research on all the portals. Talk with some platforms, regarding your project and find out which crowdfunding platform fits perfectly for you.
Create the Perfect Pitch Video for your Crowdfunding Project
This is the most important factor which most of the people in India forget. Most people see Kickstarter and create crowdfunding projects, thinking that they’ll get millions overnight, which is never true.
Entrepreneurs need to understand the mentality and psychology of Indians, compared to other nations. Indians love giving. We give millions and billions of rupees every year in temples and charity but when it comes to lending a hundred rupees to some person we think thousand times. That is where your crowdfunding video and description play a vital role in raising funds from them.
Most people judge a crowdfunding project by just looking at the video. Make your crowdfunding video short and simple. Don’t add fancy 3D imaging graphics or VFX in the video. Nor add too much animation to it. Keep it to the point, make it clear.
Remember, your end result from this video is money, not entertainment. Show your product, show yourself, your team, your workspace, your past work, and tell why someone should fund you or what change your project is going to make in society. This helps to build trust for the contributor.
Project Description
Write a detailed description but add attractive graphics along with it. In observation, it was found that most of the people in India write 2-3 lines or 1-2 paragraphs without graphics in their description. Writing only 2-3 lines shows that you are not serious about your product.
A dedicated investor would never be investing in your project without knowing in detail about it. It is suggested to keep long description, as the one who is going to give a large amount of money to a stranger will surely want to read everything.
Create a graphic picture that shows your product, your rewards, your timeline when you’ll deliver me rewards, and most importantly, your product specification.
Rewards
You need to understand that in India, most of the target audience is the middle class. Nobody will be willing to give more than 5% of their monthly salary unless you’re giving them something cool in return.
Only rich people will give your project above Rs 5-10K and that if you’re giving them a customized product or something special in return. You need to consider giving a special reward gift in return which provides them emotional value. For example, you can give them your product with a celebrity’s signature or better, help them meet the celebrity.
PR (Public Relation)
Most of the people in India are unaware of crowdfunding. So, it is very important for the project creator to get the right reach of the right audience. Once your crowdfunding project is ready, you need to decide your communication strategy before making the project live.
Create a mailer list, from your school friends to current enemies. Tell them all about your project and ask them to fund it once the project is live. Don’t be ashamed, be straightforward in asking to fund your project. If they don’t fund it, at least ask them to share a word of mouth or a small post on their social media. It will help you to raise a little fund. Then, it’s time for PR.
Get in touch with all your press contacts and tell them about your crowdfunding project. If you don’t have any contacts, hire a PR agency. If you can’t hire a PR agency, ask your crowdfunding portal to do PR on your behalf.
Some of the crowdfunding platforms in India help with that too. PR or Public relations are a crucial factor in any business. You need to have credibility in writing to prove your genuineness and potential in your PR.
News articles will help you to achieve this and act as a backbone. It’ll also help you to get strangers to know about your project and in some cases, raise funds from them.
Get in touch with bloggers who write articles regarding your project field. Let them know about your project and ask them to write an article on your project. Choose a blog with good reach and engagement.
Social Media and Follow-up
Build a social media strategy and create some unique campaigns surrounding your project. Social Media will help you to get that boost for making your project a success. A creative campaign will help your project go viral and even to reach the audience who’ll fund it.
Do Facebook posts thrice a day.
Interact with strangers on Twitter by tweeting, hourly.
Tell every possible person on the internet about your project.
Send emails to all your contacts regarding your project, weekly.
Take a follow-up via email or phone with the people who said they’ll fund your project or showed their interest.
Connect with writers who wrote about your project in news articles or blogs. Ask them to update their articles about your new achievement.
Put yourself in the investor’s shoes and see what you will want to see if someone asks for money from you.
Crowdfunding is a good option for new startups with people and investors getting aware of it. It is a platform to show your product to investors if you do not have many contacts in the business world. The main advantage of crowdfunding is that you do not necessarily have to lose equity while raising funds. However, the Indian crowdfunding system does work in that way a lot.
There might be some people who will fund you without equity but you will get the majority of the funds from professional investors who will demand equity in your company. It’s your job to choose the right crowdfunding option.
FAQs
What is crowdfunding and how does it work?
In its simplest form, crowdfunding is getting others to finance the creation of a product, project, business, or work of art. It’s extremely advantageous for entrepreneurs and eliminates the overbearing upfront costs that stop most startups before they begin. It uses a web-based platform or social networking sites to solicit funds for the fundraiser by showcasing the story to potential donors or investors.
What are some of the benefits of crowdfunding?
Crowdfunding can be a fast way to raise finance with no upfront fees in businesses. Pitching a project or business through the online platform can be a valuable form of marketing and result in media attention. By sharing your idea, you can often get feedback and expert guidance on how to improve it, etc.
What are some of the popular crowdfunding platforms in India?
Kickstarter, Wishberry, Indiegogo, FuelADream, Fundable, Ketto, Catapooolt, and Milaap are some of the popular crowdfunding sites in India.
What is an example of crowdfunding?
An example of a successful crowdfunding project is The Veronica Mars Movie Project. Fundraiser Rob Thomas used crowdfunding to fund the movie. The project was a great success surpassing their $2 million goals by an additional $3 million. The crowdfunding project also gained international reach.
Fundraising is a tough nut to crack for many startups. But with a growing startup ecosystem, networks connecting the investors and the entrepreneurs are increasing exponentially.
According to a report, 65% of entrepreneurs admit they were not fully confident they had enough money to start their business. Here are some practical tips from various investors and successful entrepreneurs which might attract investors to your business. It can help you raise investments to scale your business.
Business Plan to Attract Investors To Your Business
An investor is always interested in the business plan apart from an idea. An idea might be unique or innovative but a business plan is what makes it effective. Your business plan must include details about your target audience, sales forecast for coming years, a problem which you are going to solve, go-to-market strategy and your plan for scaling the business. A most important factor to keep in mind is the uniqueness of your product. In other words, how different is your product and what are the existing problems it is catering to?
Presenting your business model through figures and block diagrams might prove fruitful and productive. One suggestion which many people from the ecosystem advice is, to keep things simple and not to complicate them. Keep your business model realistic, logical and rational. You can also take the help of analytics to derive conclusions about specific grey areas where your product can actually bring a positive impact.
In this age of internet and digital era, having a virtual reach proves to be more productive. Create an account on different social media platforms to maximize your reach. An account on platforms like LinkedIn, Indian Angel network, Quora might also prove useful. If possible maintain a blog, in which your experiences, data, analysis, viewpoints can be published, this would help connect more people with value adding benefits. You can also entertain guest posts from experienced industry people. This might help to attract investors to your business. Whenever a potential investor visits your profile and sends you a connection, accept it and take no time to initiate a conversation with him. The biggest advantage of these sites is, you can follow investors who invested in companies similar to yours and can also track your rival companies. On the other side of the coin, if not handled properly, it might deter your image in a few seconds.
Build Network to Attract Investors To Your Business
“Your network decides your net worth”, a popular saying in the startup world. Before approaching an investor, it is always advised to note down at least 40-50 potential VCs and AVs. To start this, interact with other fellow entrepreneurs who work in the same domain as yours. Interact with successful businessmen and entrepreneurs to know their strategies, mistakes, and experiences. Discuss your idea briefly, business model and finance with them, if any suggestions come from their side, accept it gracefully. Ask them for further contacts, discuss with those contacts and build a network around you. This type of interaction will surely help you in finding potential customers, partners, co-founders, and investors.
Draft a basic email which can be used for contacting different investors via email. Don’t shy away from emailing or contacting. Don’t depress or demotivate on listening to a ‘NO’, because being an entrepreneur one must be immune to rejections.
Present your business idea to your close friends and family. Let them try out your product (if there) and note down their suggestions and reactions. After launching a product or a service, tell your close acquaintances to refer it in their vicinity. Initially, the conversion rate might be very low but marketing is the key. Generally, mouth to mouth marketing is more effective than door to door. If any consumer mails or messages you, reply to him/her and thank them for using your product. Nowadays, building a virtual network is more important than building a physical one.
Confidence is one ingredient which defines or defies a person from success. While presenting your idea and business model it is advised to keep cool and calm. Before presenting in front of an investor, do proper research on that investor. Catching up with mutual contacts or acquaintances also might prove useful.
Some points which will contribute to your confidence:
Emphasizing on why one should invest in your startup along with your short and long term visions will help to grab the attention of investors.
Always focus on short and crisp PPTs, well illuminated with pictures, diagrams, charts, tables and bullet points. Refrain from copying and focus more on originality.
Another point to be noted is, always be proud of your idea and never ever doubt yourself, your team or the idea.
Be more optimistic and don’t get panicky.
Answer all the questions in a simple manner, don’t let your one answer counter another. Stick to the basics, your idea, your vision, and your current scenario.
Don’t bluff or speak unwanted things.
Keep yourself open to suggestions and don’t be afraid to speak up if any suggestion or advice overlaps with your ideology or ethics.
Generally, investors want to see an expected return on their investment. Investors want to get their money back with an annualized internal rate of return. Investors are interested to invest money into growing businesses so that they can make money.
How do investors get paid?
Investors get paid according to a preferred way which is settled between the startup and investors. They can be repaid on a straight schedule, they can be paid back based upon their percentage of ownership, or they can be paid back at a preferred rate of return.
Conclusion
Finding investor is not that tough job if you know about pitching. If you can show better, they will invest better. However, each and every investor have his own way of dealing with entrepreneurs. Some invest in the startup idea, some invest in the business plan, whereas some invest in the team. So, you either need to get better in all the aspect or pitch to the investor which suits you the most.
India is fast becoming a home for startups. With several initiatives that were undertaken by the Government to strengthen the economic state of the country, startups have witnessed a growth in mobility, food tech, gaming, and many other fields. The Confluence of social as well as technological factors has deeply impacted the investment scenario in the country. With the private sector underutilized, investments in the Indian market have increased.
The 21st century is all about Technologies like augmented reality and IoT, the new addition to the family being Blockchain Technology. This technology is not only limited to the creation of Bitcoin but has other applications too, which has raised a hype on the market. If explored its full potential, this technology can bring about revolutionary changes in various segments.
Investment Trend in India
Over 22 major languages are written in 13 different scripts and over 19, 500 dialects, that’s India, a culturally and linguistically diverse nation. These numbers clearly indicate a massive opportunity in the Indian market for vernacular interface and content. It aims at accommodating non-English speaking users with internet access and a medium to pitch in their ideas. People are making investments in different industries that are trending in the startup world. Let’s take a look at the industries that are trending and are becoming hot zone for investments.
Esports has exploded with popularity and is one of the fastest-growing industries in the world. Esports and gaming took off with the release of Xbox in early 2000, even though the concept of video games had been there since the 1970s. Realizing the potential in this segment, developers pitched in this virtual world. By the year 2024, the global revenue of this industry is set to reach $1.08 billion
Social Commerce
Through social commerce, a user can browse and compare products on social networking sites, say Facebook, and then make the purchase on Facebook itself rather than going to the company’s website to make the purchase. Currently, there are three social media sites that own the social commerce space: Facebook, Twitter and Pinterest. It is revolutionizing the face of online shopping and moulding e-commerce to give the customer a more social experience involving friends, family and peers.
Live Streaming
By providing real-time content, live streaming is a new way to attract and engage users by enabling them to connect instantly. The viewers can also communicate with each other on this platform. It gives the product or the service immediate feedback. This is a powerful marketing tool that the users find interactive and more engaging.
Fintech
With global giants zeroing on this space, financial technology is on the roll due to several reasons. With vast discrepancies in the country’s banking system, growing smartphone ownership, increasing access to the internet, a booming e-commerce market, and availability of a large talent pool with knowledge of both technology and financial services.
Direct-to-Consumer
Direct-to-consumer brands are transforming conventional and established marketing solutions by causing a fundamental change in the relationship of the brand with the consumers. Global suppliers are accessible now and consumers are willing to experiment with new brands that they discover online. Consumers are quite discerning in the quality of items they purchase, this is exactly what the DTC offers, a risk-free online shopping experience.
Blockchain Technology
Blockchain Tech has attracted the attention of people and has extreme potential to go big in the future. Apart from cryptocurrencies like Bitcoins, it has many other potentials in the field of healthcare, insurance, artist royalties, voting and welfare benefits. NFTs are also peeking its head through this technology and people are taking an interest in them.
Conclusion
The startup ecosystem in India is growing every day, people are finding this enigmatic and are keeping their interest in these fields. It is quite natural that investors are going to follow the trends as they give hints about which market is in for the long run. Investors create their strategies according to them and invest in those fields.
FAQs
What is Blockchain Technology?
Blockchain Technology is a public ledger that exists across the network and is decentralized in nature and it can be distributed digitally.
What is a Market trend?
A market trend is the moving of the market in a particular direction and it can be identified by price action.
Is Esports popular in India?
Esports is quite popular in India, the gaming industry has rapidly grown over the years.
For a business venture, funding is important to survive the market drill. From, time to time, the businessentrepreneurs and the business ventures, pitch their companies in front of the investors and Venture Capitalist, to get funding and grow their business. These funds are necessary to grow the market aspects of the business and good funding can change the whole face of the brand.
2019 has been a great year, in terms of Indian business and entrepreneurship. In just half way through the year (July report), there was total of $5.8 Billion were funded to Indian startups from different investors. The businesses were able to grow a lot because of the funding they have received.
So here are the Top 10 Funding rounds of 2019:-
Zomato
Zomato is an Indian restaurant aggregator and food delivery startup.It was founded in 2008 by Deepindar Goyal and Pankaj Chaddah. It is known for providing information, menus, user-reviews of restaurants and food delivery options from the partner restaurants.
Zomato has raised over $600 million of funding from Chinese investors Alibaba’s Ant Financial. The other important investors for Zomato are Infoedge, Temasek. Zomato’s valuation has crossed over $3 billion in the new funding round, as they have managed to raise over $2 billion in funding in the earlier part of 2019.
Zomato has acquired the Indian operations of Uber Eats for around $350 million. Uber Eats is the food delivery biz run by Uber.
Ola has been the dominating player in the Indian-ride platform. It is a service that allows booking a range of cabs, bikes, rentals and other vehicles through a mobile app.
Ola has raised a total of $3.8B in funding over 25 rounds. Ola has raised over 1 billion dollars in funding through seed funding in 2019 and the funding is provided by Tiger Global and Matrix India. It raised $250 million in funding from Softbank in JULY 2019.
After the successful e-wallet, paying bills, recharges, transferring money etc, PayTm introduced the Paytm Mall. It is a platform, where users can shop like any other e-commerce website or application. The user can sometimes get some extra benefits like cash backs,discounts, etc.
Paytm mall finalized investment deals from eBay of $160 at a 5.5% stake, at a valuation of $3 Billion. The investment also allowed eBay to sell their inventory on the platform of the Paytm mall.
PolicyBazaar is an Indian insurance aggregator and global financial technology startups. It was founded in June 2008 by Yashish Dahiya, Alok Bansal and Avaneesh Nirjar. It is a digital platform where users can compare financial services from major insurance companies.
In 2019, PolicyBazaar raised over $150 million in funding from Chinese Technology giant Tencent Holdings Pvt.Ltd. The funding will be used to start newer financial services verticals and to venture into newer segments’ financial services, which will be a mix of B2B as well as B2C businesses.
Cure.fit is an Indian health and fitness company, which offers digital and offline experiences across various activities like fitness, nutrition, mental well-being and operates gyms under Cult.Fit and healthy food offerings under Eat.Fit.
In 2019, Cure.fit raised a funding of over $75 million in April 2019 as a part of their round and then, further raised about $45 million dollars, making it a close of $120 million of funding for the company. The funding is a mix of both debt and equity funding and is led by Chiratae Ventures, Accel Partners, Kalaari Capital and Oaktree capital. Some new investors who also took part in the funding round are Kotak Mahindra Bank, Epiq Capital, Unilever Ventures and Innoven capital.
BYJU’S
BYJU’S is one of the leading learning apps. It is the simple name of the brand “think and learn Pvt.ltd”. BYJU’S is a Banglore-based educational technology and online tutoring firm, which was founded in 2011 and gained its popularity in India. The founder of BYJU’S is Byju Raveendran.
In the year 2016, Byju’s became the first company in Asia to receive funding from Chan-Zuckerberg Initiative, which is a joint initiative by Facebook founder Mark Zuckerberg and his wife Priscilla Chan.By 2019, it has funded over $785 million by investors like Sequoia Capital India, Chan Zuckerberg Initiative, Tencent, Sofina, Lightspeed Venture Partners, etc. In 2019, it has collected funding over $540 million. Recently in January 2020, Byju’s raised $ 200 million from Tiger Global Management, after which the company was valued at $8 Million. Again in February 2020, Byju’s confirmed raising another $200 Million from New York based private equity firm General Atlantic.
OYO is an Indian hotel chain startup. It is the world’s third-largest and fastest-growing hospitality chain of leased and franchised hotels, homes and a variety of living spaces. It was founded by the Ritesh Agarwal in 2013 and soon became one of the largest hotel chains in India. It has its services in cities of Malaysia, India, UAE, Nepal, China, Saudi Arabia, etc.
OYO has existing investors like Softbank, with a capital of $800 million and in 2019, the founder Ritesh Agarwal has raised over $2.2 billion in debt from a series of Japanese institutions, including Nomura Holdings and Mizuho
Swiggy
Swiggy is also one of the largest and popular online food ordering platform in India. As of 2019, it has been operating in more than 100 cities. It was founded in 2014 by Nandan Reddy, Sriharsha Majety and Rahul Jaimini. The services include restaurant search, online ordering and table reservations.
In 2019 , Swiggy raised over $1 billion in fresh capital which made it the biggest funding in India’s food-tech sector. The existing investors on Swiggy are DTS Global, China’s Meituan Dianping and Coatue Management and the new investors are Hillhouse Capital and Wellington Management CO. Swiggy raised over $2 million investment from Accel and SAIF partners in 2015, after their launch.
Razorpay is an online payment solution that enables Indian Businesses to accept, process and also arrange payments. It is known as the best payment gateway app in India. It grants access to multiple modes of payments including credit card, debit card, online banking, unified payments interface, etc.
Razopay has raised over $75 million dollars in 2019, in the latest round of equity financing which has led by financial technology-focused investment firm Ribbit Capital. Reportedly, Razorpay also managed to raise $450 million in funding from marquee venture capital firm Sequoia Capital, disclosed by a close source.
Snapdeal
Snapdeal is an Indian e-commerce company, known for selling over 3 million products from 800+ categories from over 1,25,000 regional, national and international brands and retailers and has a reach in more than 6,000 towns and cities across the countries.
In 2019, Snapdeal raised over $1.8 billion in funding ad has been backed by investors like Alibaba, Foxconn, and Softbank.
2019 has been a very smooth and fast year for many startups while others were struggling hard. We hear the news about funding each and every day, which we even cover on StartupTalky’s social media handles. Funding has helped a lot to these companies to evolve and help the country to grow this year.
If you know any other startup which was funded in 2019, do let us know in the comments.
Abinaya Arangarajan
