India’s startup market has tremendous potential

India’s startup market is worth betting on, though it is still “a few years” behind China’s, said Facebook co-founder Eduardo Saverin.

During a panel discussion at the Forbes Global CEO Conference in Singapore this week, Saverin said his investment company B Capital is deploying “a lot of dollars” in India. and is thinking about the long-term success of startups there.

“I think India is a huge market with tremendous potential,” Saverin said, responding to a question about why India’s startup ecosystem hasn’t delivered better returns.

“And I think as the market continues to mature and moves into a better macro environment, it’s a market to bet on, combined with Southeast Asia.”

Much of the growth in India will come from enterprise technology companies, Saverin said, adding that B Capital has put money into an electronic medical record company and contract management companies. Enterprise technology companies are those that create software that serves businesses.

The Forbes CEO Summit 2022 in Singapore

Mayor Bloomberg | Mayor Bloomberg | fake images

India’s business success is underpinned by its large population, and the country, along with Southeast Asia, will soon have more people than China, Saverin said. He added that 25 million children are born each year in India.

Gautam Adani, an Indian billionaire and the second richest person in the world according to Forbes, said in his keynote speech at the same conference that “India is now on the verge of creating several thousand entrepreneurs.”

Adani stated that out of 760 districts in India, more than 670 have at least one registered startup.

“A smartphone and low-cost data, combined with aspirations, make the most powerful combination to transform a nation. And the journey of digitally enabled India is just beginning,” she said.

And in fact, some of the biggest companies out there, I think Microsoft started during a recession.

Eduardo Saverin

co-founder of b capital

But Saverin warned that the pace of development of India’s startups lags behind China’s in areas such as ease of asset outflows and market liquidity.

According to the Indian Ministry of Finance report from August, the country’s foreign direct investment in the first quarter of the year still lagged behind China’s. China received more than $100 billion in FDI, while India’s inflows were around $17 billion.

Invest in difficult times

He added that when capital is constrained by a slowing economy, as is the case now, entrepreneurs should seize the opportunity to “build mission-critical products.” The term “mission critical” refers to the services and goods that are necessary for the operation of a business.

“And I think environments like this create resilient companies and it’s actually a time to invest, not back down. So entrepreneurs would actually see this as an opportunity to acquire, to bring in companies while others look inward, to be aggressive. and acquire and consolidate,” said Saverin.

“And in fact, some of the biggest companies out there, I think Microsoft started during a recession.”

Also speaking at the Forbes conference, Jenny Lee of venture capital firm GGV Capital, who has backed some of the best-known companies in China including Didi Chuxing, XPeng and Kingsoft WPS, said it’s time to look more ahead as geopolitical competition between the US and China and pandemic-driven turmoil in global systems put “enormous strain” on public valuation of companies.

“We’re happy, because I think as a private investor, we’re investing in the next generation of leaders, the next three years, five years, 10 years. And that’s really what it’s like to go back to a more rational market, to go back to supporting real entrepreneurs who want to make a change,” Lee said during the same panel as Saverin.

There are plenty of opportunities in tougher times, Lee said, citing the electric vehicle/autonomous vehicle (EV/AV) and metaverse industries as new areas to invest.

Saverin, for his part, said “climate technology” will be “huge” and his company will double down on biotech.

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