Last week marked a turning point for tech startups in India, as a record-breaking fundraiser drew attention to the world’s second most populous market, just as investors scared the crackdown on Internet companies in China.
The Zomato Ltd. food delivery app. became the country’s first unicorn to debut, raising $ 1.3 billion with backing from Morgan Stanley, Tiger Global and Fidelity Investments. The parent company of digital payments startup Paytm filed a draft prospectus for what could be India’s largest IPO at $ 2.2 billion, while retailer Flipkart Online Services Pvt raised 3 , $ 6 billion for a valuation of $ 38 billion, a record funding round for an Indian startup.
“Indian entrepreneurs have been quietly creating startups for a decade now, the country’s internet infrastructure has improved dramatically over this period and there is a very good appetite for tech stocks around the world,” said Hans Tung. , Managing Partner of Silicon Valley-based GGV Capital, which manages $ 9.2 billion in assets. “Investors are starting to see the huge potential and they expect India to be a China.”
Unlike China, where online usage is much more developed, many of India’s 625 million internet users are just dipping their toes into the world of video streaming, social media, and e-commerce. Online shopping opportunities are particularly attractive, as e-commerce accounts for less than 3% of retail transactions. Tech startups in India are still paying to build supply chain and delivery networks.