Way back in 2003, when I gave a talk at Nasscom’s annual conference in Mumbai, I remember saying, “when will India 2.0 begin?” meaning the start of innovative products from India.
India 1.0 mostly started around the Y2K era, when lots of programming work was needed in the US and India stepped up to provide the manpower. This saw an unprecedented growth of Indian software services industry led by TCS, Infosys, Wipro, HCL, Cognizant, etc. Such success can also be a deterrent to innovation and product development culture, as service revenue becomes a quick road to faster ROI. At the same time, new innovation in software products is hard and requires different mindset and skills, something no one was interested to invest in. But that is changing now.
During a trip to India recently, I saw several signs of change. Masayoshi Son of SoftBank, Japan announced sizable investment of $627M in startups like Snapdeal and Ola (an Uber-like taxi service). Mr. Son even made a statement that the next Jack Ma (founder-CEO of Alibaba which had its IPO recently) may come from India. Nikesh Aurora, vice chairman at SoftBank (formerly from Google) announced investing his own personal money in Snapdeal along with other known names like Ratan Tata.
Then there are the Bansals who founded Flipkart, an Amazon-like shopping site which saw $1B investment few months back. Not to be left behind, Jeff Bezos visited India and announced a $2B investment in Amazon India. To have a dramatic impact, he rode an open truck showing a big check with $2B investment he was committing. He announced several large warehouses in Gudgaon and other India cities to meet the demands of India’s Amazon users. Myntra, another Indian start-up recently got acquired by Flipkart.
Last week, I was having dinner with a friend of mine belonging to a venture fund in Bangalore. He confirmed the increased activity in venture funding which includes the valley VC funds like Matrix Partners, Accel, Norwest Venture Partners, etc. Last week there was an event in Bangalore called Nasscom Conclave where several startups and VC’s networked (1700 attended) including many visitors from here. Besides the funding, the new graduates from top schools like the IITs are also joining new start-ups rather than the service companies they used to be attracted in the past.
The internet shopping sites like Snapdeal, Flipkart, etc are popular because of the convenience factor. Consumers do not want to fight the traffic in big cities to go for physical shopping which also includes groceries. Taxi fares in Bangalore are going through a steady decline due to Uber and Ola type services. India is finally catching up to the Internet e-commerce in a serious way. Facebook’s second largest market is India. So no wonder, Marc Zuckerberg and Jeff Bezos on recent visits to India last month, met with the prime minister, a big supporters of new technology.
Welcome the beginning of India 2.0!