There are many dimensions to India becoming a Product Nation. A thriving local market is critical, which are shaped by changing consumer preference and policy. Also important is increased trade in areas of comparative advantage.
Digital consumer market in India that opened few years ago saw its waves and cycle of valuation however it is already witnessing its next shift from India Metro to Bharat due to technology and regulation disruption going hand in hand (aka India Stack).
An undercurrent that has been largely unnoticed is emergence of B2B companies from India. Top 30 enterprise startups in India that are tracked in the iSPIX B2B is $10.25 billion last year. Saas market for Indian startups is exploding — and is on pace to be over $10 billion annually by 2025.
Like Israel is to Cybersecurity, India is becoming Saas capital for the world.
Ease of doing business in India is improving, out of 34 items in Stay In India check list part of Startup India Policy, 29 critical ones are fixes in progress.
Cross border partnership of US-India startups always existed, it is the right time to come together as software product industry to strengthen this linkage to highlight this new dimension. Two related initiatives to towards this
Initiative 1 – India Technology Product Exits Industry Monitor 2016, measuring liquidity especially global.
iSPIRT and Signal Hill in partnership is releasing our annual report for 2016 on state of exit deals in India. During 2014 & 2015, India witnessed a Product Technology funding boom with over $10bn getting invested in consumer tech / e-commerce companies and $1bn in enterprise tech start-ups. Whilst funding levels in 2016 have seen a steep decline (54% decline during first 3 quarters), mainly on account of a very steep drop in hedge fund activity, M&A in Product Technology with $1.34 billion in exits during the first 3 quarters (from 113 transactions), is on track to beat 2015 levels (137 transactions with $1.35bn transaction value) which was a record year for Indian Product Technology M&A. Furthermore, many global Tech majors including the likes of Apple, Google, Facebook, IBM, Naspers and Salesforce have now completed at least one Product Tech acquisition in India. However the large majority (81%) of M&A transactions are still very small (<$5m in transaction value), with the bulk (>70%) of the transaction value in the last 3 years being accounted for by 7 large (>$100m) M&A transactions. Hence there is currently a missing middle in the $5-100m deal range in Product Tech M&A in India. With an increasing number of companies that received funding during the 2014 & 2015 funding boom achieving scale during the next couple of years, we expect Product Tech M&A levels in particular across mid-size and large transactions to pick-up multi-fold from here.
Detailed report here
Initiative 2 – StartupBridge India, strengthening foundation to increase cross border linkages.
Towards enhancing cross border linkages iSPIRT is organizing a conference called StartupBridge India in partnership with TiE SV and Stanford Center for International Development (SCID) on Dec 2 at the Stanford campus.
This conference will bring top 30 business software startups from India to the US with aim to foster cross-border partnership and potential strategic opportunities.
The conference is designed to be a symbolic and relationship-building bridge between top Indian SaaS and deep tech startups and US companies, to forge long-term relationships.
More details here www.startupbridgeindia.com
