The extraordinary rise of Indian startups

India is taking residency at VivaTech. Last year, Prime Minister Narendra Modi participated in the event via video – sanitary conditions required. This year, the world’s second most populous country (1.3 billion people) is the guest of honor at the fair.

The Minister of New Technologies, Communications and Transport, Ashwini Vaishnau, had the opportunity to tour the corridors of Hall 1 of the Paris Fair, Porte de Versailles, and visit the Indian Pavilion which hosts about fifteen photo sessions. One hundred entrepreneurs and digital experts are on site during the event.

This massive representation reflects the emergence of the Indian ecosystem, which is as dynamic as it is unknown in France. The numbers make you dizzy: India now has more than a hundred rhinos – compared to 27 in France – whose cumulative valuation is $332 billion.

Boiling ecosystem

In 2021, Indian startups raised $35 billion from investors. Among them, 44 joined the herd of rhinos, followed by 16 new companies this year … the US IPO.

“There has been a lot of improvement in recent years to boost innovation, understand the market better, develop ideas and then test them,” said K. It collaborates with about 3000 startups around the world.

I expect to see a lot of zombies.

Anand Lunia, Partner at India Quotient

However, the ecosystem is affected by the cooling of the venture capital market. In recent weeks, several major Indian startups have been forced to cut jobs (Vedantu, Cars24, Ola, Meesho, etc.) and big rounds are becoming scarce.

We haven’t seen such a slowdown in at least five to six years. “I expect to see a lot of zombie unicorns,” comments Anand Lunya, partner at India Quotient, which has invested in more than 70 startups since 2012. “I expect to see a lot of zombie unicorns,” he predicts, referring to companies whose economic model is fragile and the risks of disruption. “In the innovation cycle, there are always ups and downs,” says K Ananth Krishnan, convinced that the best is yet to come.

Even if the clean-up is done to correct the excesses, investors are maintaining their appetite for India. American venture capital giant Sequoia, for example, has just raised a fund specializing in India and Southeast Asia for $2.85 billion.

Serious assets

It is true that the country has serious assets to build tech giants. It has a single market – even if the Indian states are different from each other culturally and religiously – recognized expertise in IT, English proficiency among elites and competitive technology centers, such as Bangalore, Delhi or Bombay.

The ecosystem also has distinct links with the United States, in particular with California, the land of natural expats. The prestigious Stanford, Berkeley or UCLA universities are an inexhaustible reservoir of students from the Indian subcontinent.

Some then return to the country to set up businesses, while others take root in the United States. Many American tech giants (IBM, Google, Microsoft, Twitter, and Adobe) are run by presidents of Indian or Indian origin. They do not hesitate to reinject part of their money into India.

Among the large French start-ups, few venture into the country. BlaBlaCar launched a car sharing service there in 2015, Meero, the platform that connects professional and corporate photographers, opened an office in Bangalore in 2019, and OVH is also gaining momentum there.

“Five years ago, we acquired VMware’s cloud business, which had offices in India,” recalls Lionel Legros, responsible for the cloud giant’s Asia Pacific region. Today, we have about sixty employees in Bangalore and Bombay. A sign of its ambitions, OVH will open It has its first data center in India by the end of the year and is working with local startups as part of an incubation programme.

Sendinblue, an atypical case

Sendinblue is still the most Indian of the following 40 contracting companies: in fact, in this country, the digital marketing specialist, often cited among the would-be unicorns of French Tech, was born in 2007. His boss Armand Thiberge had started His career is there and he co-founded Sendinblue with an Indian partner, Kapil Sharma (who later left the company). The startup has more than 100 employees in this country.

In general, fast-growing French start-ups prefer to spread out in Europe and the United States. Despite its great potential, India is seen as a complex country to approach if you do not have strong connections right away. There are also obstacles to overcome. “It is a highly regulated market because they want to produce locally, assures Lionel Legros. Communication costs have also been very high, but there is progress.”

Create bridges

The Indian presence in France is also limited. In the past, we did not have enough relationships with French universities and startups. But we want to speed up,” insists K Ananth Krishnan, who announced the creation of a center specialized in innovation in Paris (Pace Port). India’s invitation to VivaTech should make it possible to break mental barriers and open up development prospects for the future.

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