With the year, almost drawing to a close, it is perhaps a good time to reflect on how the startup ecosystem has performed in the country. It has been a fascinating year and some of the early presumptions about starting up have begun to unravel. Beginning early this year, we saw a great rush of venture money and a significant uptick in valuations. As a seed round of a million dollars became the new norm, startups started mushrooming throughout the country. The sectors that saw significant interest include:
IoT and Wearables – The entire Internet of Things (IoT) has been literally forced down our throat by big tech companies, which has meant over a billion dollars have been invested in startups in the IoT space globally over the past few months. Technology companies and their investment arms like Intel, Cisco, Microsoft, Qualcomm and big VC firms like Sequoia Capital, NEA, Andreessen Horowitz and others have made a sizeable investment in the space. While I am a great believer of IoT and its potential, there seems to have been more hype than substance till now. However, that has not stopped a number of startups trying to do some interesting stuff around IoT. Probably it will take us some more time before we can start seeing the full benefits of IoT.
On the other hand the entire Wearables segment has seen a number of significant products taking over our life. This segment is largely propelled by fitness products that look to help us maintain a healthy lifestyle. Fitness bands are the most popular Wearables today, followed by Smartwatches. While top tech companies like Samsung and Apple have thrown everything behind their Smartwatches, even Google has tried its hand in it. It is not surprising that many startups now consider Wearables he next big thing.
Food Tech – This is perhaps that segment that has taken everyone by surprise. While the segment has been simmering for some time now with the likes of Zomato doing a good job, the amount of startup interest in the segment has been a revelation. This has been mainly because the food and restaurant industry till now has been largely fragmented with little or no tech adoption. Startups have figured out a lot can be done in the aggregation business and in delivery. The sub segments that have done well in the space include both eat at home ordering and delivery, restaurant discovery and booking (table reservation), in restaurant payments, office food delivery and recipe aggregators. Some of the emerging players like TinyOwl, DineOut and Zeppery should be on watch out.
Hyperlocal – At any point of the day, my local market today has more delivery boys compared to actual shoppers. With the likes of Grofers, BigBasket and Pickingo vying for your attention as your on demand delivery partner, there is an explosion of hyperlocal services. From delivering fruits, vegetable, pulses, to transportation services, hyperlocal startups have managed to grab their fair share of eyeballs and investor money. However, this sector has become very competitive and it is will be interesting to see how these startups scale and evolve in the future.
Operations & Logistics Management – According to global startup analyst firm Tracxn about 90 startups and 50 plus startups have been founded in 2014 and 2015 respectively. Top funded startups include the likes of Delhivery, Ecom Express and Gofers. The sector has seen a lot of interest primarily because of the growth of ecommerce in India. The startups in the segment have now started finding niches and diving deeper. This has led to the emergence of local delivery startups, food delivery startups, intra-city, inter city, overseas, courier aggregators, ecommerce shippers and local transport and freight aggregators. Of the many sub segments, local delivery, intercity transport and local transport and fright aggregators have seen considerable attention. Some of the interesting startups in managing Operations efficiency in Merchant operations such as FocusDigit should be on watchout list.
Alternative Lending – A rage in the UK and US, alternative lending startups in the peer-to-peer lending and crowdfunding space have become increasingly popular in the country. According to Tracxn about $ 27 million has been invested across alternative lending companies in just the last 18 months and there are about 30 companies across P2P Lending & SME Lending verticals, with more than half founded in just the last 18 months. The promise of cheaper, faster and hassle free finance has made these startups hugely popular among people and startups like Faircent, Capital Float, Ledingkart, RangDe and Milaap have done a good job in the segment. However, absence of any regulations and policies to govern the segment has left an air of uncertainty and the Reserve Bank of India and the Government must come up with policies to regulate this highly promising segment.