India’s startup market has huge potential

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India’s startup market is worth betting on, even if it’s 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 firm B Capital was deploying “a lot of dollars” in India. and think about the long-term success of new businesses there.

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

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

Much of the growth in India will come from technology companies, Saverin said, adding that B Capital has invested in an electronic health records company and contract management companies. Enterprise technology companies are those that create software to serve businesses.

The 2022 Forbes CEO Summit in Singapore

Bloomberg | Bloomberg | Getty Images

India’s entrepreneurial success is based on 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 every year in India.

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

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

“A cheap smartphone and data, mixed with aspirations, is the most potent mix to transform a nation. And India’s digital journey has only just begun,” he said.

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

Edouardo Saverin

Co-founder of B Capital

But Saverin warned that the pace of scaling up Indian startups lags that of China in areas such as ease of exiting assets and market liquidity.

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

Investing in tougher times

He added that when capital is constrained by a slowing economy, as it is now, entrepreneurs must seize the opportunity to “build mission-critical products.” The term “mission critical” refers to the services and goods needed to run a business.

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

“And actually some of the biggest companies in the market, I think Microsoft started during a recession.”

Also speaking at the Forbes conference, Jenny Lee of venture capital firm GGV Capital, which has backed some of China’s best-known companies including Didi Chuxing, XPeng and Kingsoft WPS, said it was time to look ahead as the geopolitical competition between the United States and China and the pandemic-triggered upheavals in global systems have dealt a “huge blow” to the 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 so it’s really a return to a more rational market , a throwback to supporting real entrepreneurs who want to make a difference,” Lee said on the same panel as Saverin.

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

Saverin, for his part, said “climate tech” was going to be “huge” and his company would double down on biotech.

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