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TECH START-UPS IN INDIA

A BRIGHT FUTURE
Supported by Google For Entrepreneurs

Foreword
The Indian Technology Start-up landscape has evolved to become the
fourth largest base across the world. Since 2010, there has been a
significant rise in the number of technology start-ups and today, our
country hosts more than 3,000 tech/digital start-ups. If the landscape
continues to evolve at this pace, then by the end of 2020 more than
11,500 start-ups are expected to get established in India, generating
employment opportunities for over 250,000 people.
Key indicators such as opportunities existing in the domestic market,
access to capital/mentors, and increased M&A and consolidation
activities clearly point towards the new evolution of the ecosystem.
Several founders are leveraging emerging technologies like big data
& analytics, augmented reality, internet of things and cloud computing
to come up with some of the best-in-class technology-based
start-ups.

R. Chandrashekhar
President, NASSCOM

This report, titled Tech Start-ups in India: A Bright Future is a rst-ofits-kind report undertaking an in-depth analysis of the various aspects
of the start-up ecosystem. The report clearly identies the current
Pari Natarajan
CEO, Zinnov

scale and size of the start-up landscape, factors that are impacting
the growth of the overall ecosystem and steps that need to be taken
to make the environment more conducive for start-ups.
We hope this report would be useful to you and we welcome your
feedback and comments at research@nasscom.in

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Executive summary
The start-up ecosystem is often described as young, innovative, aspirant
and futuristic. India, home to a new breed of young start-ups, has evolved to
become the fourth largest base of technology start-ups in the world. Since
2010, the Indian Technology Start-ups landscape has seen a sharp rise in
the creation of new start-ups and this number is expected to cross 3,100
by the end of 2014. It is a hyper growth inection point for the Indian startup ecosystem, with growth, capital and acquisitions all coming together to
create a perfect storm.
The whole ecosystem is evolving and becoming more and more vibrant and
multiple indicators are pointing towards this direction. The Indian middle
class is becoming a voracious consumer of digital solutions. eCommerce,
marketplaces and mobile apps are increasingly driving people online. Many
start-ups are incorporating emerging technologies in their solutions and
building global digital solutions from India.
Start-up funding is maturing signicantly in deal value and in diversity of
focus areas, and start-ups today have access to multiple sources of funding.
While start-ups are betting high on the ecosystem, demand for supportive
government policies continue to exist.
NASSCOM and Zinnov are delighted to present the rst-of-its kind report
titled Tech Start-ups in India: A Bright Future, which examines various
dimensions of the Indian start-ups ecosystem. This report is the result of
a comprehensive three-month study, during which detailed research was
carried out by the team at Zinnov to gather quantitative and qualitative data
and insights through primary and secondary sources. The whole process
involved personal interviews with various start-ups, VCs, Angel Investor and
Incubator/Accelerators, and extensive desk research.

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Some of the key findings presented in this


report are:
India currently boasts of over 3,100 start-ups with
an addition of 800+ new start-ups in 2014 alone.
If the landscape continues to evolve at this pace
then by 2020 more than 11,500 start-ups would
get established in India, generating employment
opportunities for over 250,000 people
The major growth drivers like large domestic
market, access to capital/mentors, whitespace
opportunities and increased M&A activity are
accelerating the start-ups growth. Indian startups, with their unique solutions, are witnessing
increased traction in global whitespace opportunities
such as internet of things, augmented reality,
smart hardware, big data & analytics, cloud
computing, etc.
Domain solutions emerging Ad-Tech, EduTech and Health-Tech and other niche solutions
emerging for healthcare, agriculture, etc.
Bengaluru and NCR are the top 2 start-ups
destinations and cumulatively these two geographies
account for over 50 per cent of the start-up

base. Looking at recent rounds of funding, NCR


tops as the investment destination. Over 59 per
cent of start-ups are focused on B2C categories
which is dominated by eCommerce and online
marketplaces; B2B segments are dominated by
big data & analytics, ERP & marketing solutions
Young entrepreneurs dominate the start-up
landscape with over 73 per cent of founders in
the age bracket of less than 36 years. Most of
these founders with a strong consumer-centric
approach, have come up with some of the best-inclass B2C start-ups. Women entrepreneurs have
also started to leverage the innovation economy
Scaling up and growth hacking-are key priorities for
start-ups. Start-ups are able to hire best-in-class
talent from the industry by offering above average
compensation, stock options, enhanced growth
opportunities and exible work culture
Start-ups today have access to multiple sources
of funding from VC/PE, angel investors,
banks and financial institutions as well as
incubators. Funding is maturing signicantly in
deal value and in diversity of focus areas. During

TECH START-UPS IN INDIA

A BRIGHT FUTURE

2010-14 timeframe close to USD 3 billion is


expected to be invested in Indian start-ups
The innovation imperative leading to a rise in
collaboration and partnerships product rms with
platform players, IT services, global MNCs, CIOs
Given the vibrancy in the ecosystem, the M&A
activity is on the rise in India. Acqui-hiring,
technology acquisition, market consolidation and
customer acquisitions are the primary drivers for
increase in M&A of Indian start-ups
While start-ups are betting high on the ecosystem,
there is constant need to nurture this ecosystem.
Demand for supportive government policies
(ease of doing business, tax incentives, participation
in government contracts, availability of risk capital,
etc.) continue to exist. While the new government
has made the right announcements, there is a need
for directional efforts to see them implemented
Future of products devices at the edge, logic at
the core, fusion of IOT, SaaS, mobile solutions, data
analytics are leapfrog opportunities for India

Scope of the report


To understand the evolution of the technology product and digital
start-up landscape in India

Key unmet needs &


expectations of start-ups
Start-up support
ecosystem in India

Angel investor
ecosystem in India
VC/PE
investment trends

Technology focus
areas and whitespaces

Technology product/digital
start-up landscape in India

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Technology product/digital start-up


Denition considered for the report

Inception year
Organisation with
inception year of 2010
or later

Intellectual property
That has developed and/or owns
the technology IP (includes IP-owned
through acquisitions) and/or

Headquartered

That provides digital/technology


platform for transactions and/or
customer engagements

An organisation that is
headquartered in India
Has founding team
with Indian origin AND
product development
largely in India

Distribution
Undertakes the packaging,
selling and marketing of the
product/platform itself or
through channel partners

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Acknowledgement
This report has been co-developed by NASSCOM and Zinnov through a
comprehensive three-month study to understand the technology product
& digital start-ups landscape in India.
The preparation of this report has been facilitated by a number of
organisations and people who have extended great help to the NASSCOM
and Zinnov teams. We wish to sincerely thank all of them for their valuable
contributions without which this report would not have been possible.
First, we would like to thank all the industry members and other
colleagues, who went out of their way to provide detailed inputs and
perspective of their services/clients/markets, etc. They offered great
support to this project by providing the requisite data and insights as
required by the team. This study has been greatly enriched by the valuable
insights and detailed inputs provided by various investors, angels as well
as other key stakeholders in the ecosystem.
We would also like to acknowledge the special contribution made by
Google for supporting us on various policy-related aspects as well as
formulating and nalising the numbers.
Finally, we would like to specially acknowledge the support offered by
NASSCOM research team for their efforts and contribution towards the
execution and completion of this report.

TECH START-UPS IN INDIA

A BRIGHT FUTURE

SECTION I LANDSCAPE/SCORECARD
Founders Profile

Start-up Landscape
India emerges as the

Catching up

th

4 Largest
start-up location globally

Delhi-NCR

Fast

48%

73%
Founders

28%

have

less than

MNC

36

work
experience

years of age

of start-ups continue to
be the technology hotspots

Bengaluru

Focus Areas
B2C/B2B:

4%
B2B:

37%
2014

3,100+

65,000+

By 2020 11,500+ 250,000+

36%
Founders
solely
engineers

6%
Women
founders

B2C:

59%

Growth Drivers

Global Reach of Organisations

43%
Large

Domestic
market

Evolving

ecosystem of
investors and mentors

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Whitespaces

Increased

M&A

resulting in more
exits for investors

product/digital

organisations
have focus on
global market

3,100+ start-ups in India; fastest growing


community; 4th largest in the world
Tech.
Product/Digital
Start-ups by
Key Countries*

US

UK

Israel

India

Canada

3,500+

3,300+

41,500+

Strong Growth Indicators - India

3,100+

Still a Lot of Ground to Cover***

> 800 Start-ups created every year


USD
2.9+
billion

2,700+

US

India

Funding** since 2010

70+

Active VCs/PEs in 2014

Avg. valuation
of start-ups

550+

Angels in India

80+

Incubators/Accelerators

USD 4.2
million

USD 2.3
million

Ease of doing
business ranking

7th

142nd

No. of investors
residing in the country

25,000

770

*in India ~68 per cent of total start-ups listed on Angel List are tech. product/digital start-ups, same ratio has been applied to the total number of start-ups listed on Angel List for a
country to arrive at the No. Tech. Product/Digital Start-ups
**Includes projected investments by VCs, PEs, angels, incubators/accelerators during 2010-14 in start-ups incepted during 2010-14
***Data from Angel List and World Bank Group (Ease of Doing Business rankings are benchmarked to June 2014)
Source: Microsoft Ventures, Zinnov Product/Digital Start-up Database, Angle List

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Multiple drivers supporting the Indian start-up


ecosystem to reach its hyper-growth inection point
Growth Drivers
Evolving ecosystem of investors and mentors
Large domestic market
for tech and proximity of
start-ups

Entrepreneur peer group is


supporting the development
of other start-ups

Leverage India as test


bed before going global

A number of
whitespaces within
consumer internet,
big data, cloud and
IOT, etc.

10

TECH START-UPS IN INDIA

A BRIGHT FUTURE

As M&A is witnessing
increased momentum
in India, investors are
getting more exit
opportunities

Further acceleration expected base is likely to


expand four-folds by 2020
Technology Start-ups by Inception Year

2014E
2010

2011

3,100+
480+

Total number
of start-ups

2020P

11,500+

525+

2012

590+
2013E

680+

2014E

65,00075,000

2014E

805+
2020P

2,000+

Total number
of jobs created

2020P

250,000300,000

Year 2020 is expected to see a remarkable rise in the base of start-ups, and the total number of start-ups are projected to grow at a CAGR of ~24% between 2014 and 2020
This will equally impact the growth of Indian start-ups jobs, which is expected to grow at a CAGR of ~25%
Note : P = Projected; E = Estimated
Source : Angel List, Zinnov Product/Digital Start-up Database; Venture Intelligence, YourStory.in

11

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Bengaluru and Delhi-NCR emerging as start-up


hotspots; reasonable traction in other locations
Start-ups by Location
(Total = 3,100+)
Delhi-NCR

24%

Top 6 locations
account for 90% of the
start-up activity in India

Hyderabad

Mumbai

15%

Pune

6%

Bengaluru

28%
Top focus
areas of
start-ups
by location*

eCommerce/Aggregators
Big data & analytics
ERP
Productivity & collaboration

*For Directional purpose only


Source: Zinnov Product/Digital
Start-up Database

12

TECH START-UPS IN INDIA

A BRIGHT FUTURE

8%
Chennai

6%

Bengaluru Delhi-NCR Mumbai

Education
Marketing & advertising

Kolkata, Ahmedabad,
Cochin, Jaipur and
Thiruvananthapuram
are the next
emerging locations

Hyderabad

Pune

Chennai

Discernable shift observed towards the B2C


segment, dominated by eCommerce and online
marketplaces; B2B dominated by big data &
analytics, ERP and marketing
Focus Areas of Start-ups
Cumulative
B2B

B2C

37%

59%

B2C
focus of
start-ups

15%
5%
13%
18%
5%

19%

19%

16%

4%
7%
6%

6%
10%

7%
7%
11%

21%

45%

42%
22%

Across years
2010

5%
40%

69%

2014

2010
B2C

B2C/B2B

Note: Analysis based on a sample of 521 start-ups across years


*Others include Communication/Collaboration, productivity, gaming.
HW and other consumer internet
**Others include apps/web dev, infra mgmt solutions, content mgmt,
data recovery, gaming, HW, mobility solutions, security and others
Source: Zinnov Product/Digital Start-up Database

13

Education
Aggregator &
online marketplace

39%

eCommerce

2012

2014

Overall

14%
5%
9%

17%
7%
13%
13%

19%
8%
9%
10%

52%
24%

TECH START-UPS IN INDIA

Travel

8%

26%

A BRIGHT FUTURE

Social media

21%
26%

B2C/B2B: 4%

B2B

16%

Others*

B2B
focus of
start-ups

Others**
Productivity

8%
6%
6%

16%

33%

26%

23%

26%

Marketing
& advertising

23%

30%

27%

28%

ERP

2010

2012

2014

Overall

Communication
/Collaboration

Big data
& Analytics

Start-up landscape in India Young, diverse and


inclusive
Start-ups: Diverse & Inclusive

Age Wise Break-Up of Start-up Founders


34%

Building on experience:

Fresh innovation:

32%

62% start-ups have a


tech background

13% start-ups have no


previous work experience

51%
49%
~73%

Young founders (age <36 years)

26-35 years
45+ years

~52%

Postgraduate founders**

~58%

Young founders focused on B2C

~6%

Women founders

Education Break-Up of Start-up Founders

16%
16%

36%

14%
BE/B. Tech

ME/M. Tech
/MS/MCA

Cumulative

20%
2010
B.E./B.Tech
MBA

43%
2014
M.E./MS/
M.Tech/MCA
Others*

Note: Analysis based on a sample size of 430 start-ups for Age Wise Break-up and 458 start-ups for Education Break-Up;
#Analysis based on a sample of 100 start-ups across years
*Others includes Other Undergraduates, Others Masters and Doctoral degree
**Postgraduate Founders includes founders with ME/M.Tech/MS/MS/MCA, MBA, Other Masters and Doctoral degrees
Source: Zinnov Product/Digital Start-up Database

14

TECH START-UPS IN INDIA

A BRIGHT FUTURE

13%

49%

Founders Experience Profile#

No Previous
Experience

25%

12%

14%

16%

16%

27%

33%

Others*

35%

MBA

Indian
Tech

Up to 25 years
36-45 years

2014

Quick
Facts

Indian
Non-Tech

10%
2010

13%

Up to
25 years

Cumulative

4%
15%

MNC
Non-Tech

53%

5%

36-45
years
22%
45+
5%
years
20%

MNC Tech

26-35
years

With a major focus on emerging opportunities


around B2C segment

Aggregator

eCommerce
Gaurav Kushwaha
CEO & Founder
B.Tech from IIT Delhi
Multiple rounds
of funding

58%
founders focus
on B2C segment

Major
Focus Areas

Gaurav Munjal
Founder & CEO
B.Tech from NMIMS
Single round of funding

36%

ERP

founders focus
on B2B segment

Manasij Ganguli
Co-Founder & CEO
B.E. from BIT, Mesra
Single round of funding

Major
Focus Areas

6%
founders focus on
B2B/B2C segment

Recruitment Portal
Santosh Yellajosula
Co-Founder & VP
M.Sc from BITS
Single round of
funding

Note: Analysis based on a sample size


of 613 start-ups across years
Source: Zinnov Product/Digital Start-up Database

15

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Major
Focus Areas

Aggregator

Business Analytics
Arjun Pillai
Co-Founder & CEO
B.Tech from Cochin University
Single round of funding

Rahul Yadav
Co-Founder & CEO
B.Tech from IIT Bombay
Multiple rounds of funding

Women entrepreneurs are starting to leverage the


innovation economy
Top Focus Areas of
Start-ups
Women entrepreneurs
in start-up landscape

Successful Women
Entrepreneurs

~6%

Age Wise Break-Up of


Start-up Founders

84%

eCommerce

B2C

45+ Years
0% Up to 25
36-45 Years
16% 16% Years

Aggregator

Richa Kar
Co-Founder & CEO
Masters from
NMIMS
USD 9 million in
funding

68%

13%

26-35 Years

B2B

Education Break-Up of
Start-up Founders

Education

Sreepriya Koppula
Founder
Certificate
Programme from
Stanford University
Single round of
funding

BE/B. Tech

Others*
30%

26%

37%

7%

ME/M.Tech/
MS/MCA

3%

B2B/
B2C

MBA
Note: Analysis based on a sample size of 31 start-ups
*Others include: Other Undergraduates, Others Masters and Doctoral degree
Source: Zinnov Product/Digital Start-up Database

16

Marketing
platform

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Aggregator

Ruchi Garg
Founder & CEO
BE from CRSCE
Single round of
funding

Large enterprises are collaborating with start-ups


to enhance future growth
Enterprise

Start-ups

Benefits achieved
Goodwill
enhancement

New business
opportunity

Serving unmet
needs of clients

Deeper client
engagement

Client connects
Product credibility

Corporate accelerator
Programme

Thrive for innovation

Transition to
a solution provider

Support in solution
integration

Intrapreneurship
programme

Bundle services
around an
innovative product

Supporting
infrastructure

Enterprise partnership

Collaboration drivers

Business transformation
Global market access
High business value
to clients

Competencies offered

17

Collaboration models

Corporate funds
programme

Competencies offered

Extended support

Innovation

Branding/sales & marketing

Harvest new ideas

Access to lients

Compact product
development cycle

TECH START-UPS IN INDIA

A BRIGHT FUTURE

The global competitiveness of Indian technology


start-ups is accelerating
Global Success Stories from India

Set Up 2010 Onwards

Set Up Pre 2010

Set Up Pre 2000


Early movers
B2B enterprise products
BFSI vertical focus

Growth firms
Enterprise security
Application software
Analytics
Productivity
Emergence of B2C

More and more start-ups are exploring global markets


Since 2010 there has been a significant growth in the spectrum of firms that have focus and presence at a global level
Source: Desi Products Videshi Markets: Indian Software Products Building Global Business NASSCOM & Zinnov

18

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Young start-Ups
Big data & analytics
Marketing &
advertisement
Mobility
ERP
Comm/Collaboration
Cloud computing
Niche use cases

43% product/
digital firms
have focus on
global markets

with the huge domestic market driving demand


Tech-ready SMBs
10+
million
Large
enterprises

Public listed
organisations

SMBs with PCs


2

5,000+

3,500+
Organisations in
Forbes 2000

Small
& medium
businesses

65+

Internet users
250+
million

3
Customers

Mobile phone
connections
900+
million

Smartphone users

19

TECH START-UPS IN INDIA

A BRIGHT FUTURE

SMBs with
mobile phones
100%

Large
enterprises

India domestic
market

5+
million

115+
millionn

Key factors for Indian start-ups to focus on


global markets

Global Market (USD) Opportunity


US & EU represent over two-third of
the global technology market

Global Whitespace
Opportunities
Over USD 100 billion+ of SMAC*
led level playing opportunities** in
global markets for Indian firms

Easy Access to Capital


US domicile opens more doors for
VC & M&A activity
(50-100 times bigger early stage
funding ecosystem than India)
Many start-ups leverage India as the test market and then start focusing at the global market
Start-ups with a global focus are setting their units outside India as well, as they want to be close to their customers
*Social, Mobile, Analytics & Cloud;**by 2015
Source: Desi Products Videshi Markets: Indian Software Products Building Global Business NASSCOM & Zinnov;

20

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Business Environment
/Laws in India
Anecdotal evidence of low adoption
of products by Indian firms
& long sales cycles

Start-ups adopting innovative approaches to


attract and retain best-in-class talent
Hiring Channels
used by Start-ups*

Talent

Value Propositions
by Functions to
Attract Top Talent**
Technology function

57%

interesting work

25%

Social
Job
network
portals

20%

16%

9%

7%

7%

Sales function
opportunity to grow

Internships
College
HR
Hackathons agencies recruitment
Referrals
& meetups

Operations
open culture
B

Monetary Benefits are Getting Competitive

82%

83%

63%

start-ups pay
more than the
market median**

start-ups use stock


options for longterm incentives**

start-ups have definitive


link between performance
and compensation**

*Based on NASSCOMs analysis of 529 start-ups (http://10000startups.com/skills-infographic/)


**Based on analysis of 40 start-ups across four business sectors, by Hay Group in partnership with Canaan Partners from the report titled How Indian start-ups are building to last

21

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Hiring technology professionals is a top priority for


start-ups
Top Skills Start-Ups are Looking For
Technology

80%

Java

61%

HTML5

57%

CSS3
Product
management

Sales
business
Marketing

66%
66%

Top
programming
skills

20%

AJAX

25%

PHP

22%

Python

22%

Ruby on rails

14%

C/C++

14%

Others
Operations

41%

20%

30%
Inbound
marketing

Finance

14%
7%

HR

Others

14%

Source: http://10000startups.com/skills-infographic/

22

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Top
marketing
skills

70%

Growth
hacking

38%

SEO/SEM

38%

Online advertisement
/PPC/PPM
Community
management
Others

35%
25%
9%

SECTION II EMERGING TECHNOLOGY TRENDS


Start-Up Landscape
Cloud

800+

Delivery Platforms

Big Data & Analytics

350+

Start-ups
Security

Start-ups

Cloud

35+
Start-ups

Augmented
Reality

>25%

30+
Start-ups
AdTech

100+
Start-ups

Start-ups
Addressing
Whitespaces
/Emerging
Technologies

IoT

35+

start-ups
leverage
cloud as
the delivery
platform

Analytics
& ERP
emerge as key
cloud workloads

HealthTech

30+
Start-ups
Mobility

Start-ups

EduTech

Hardware

190+

30+

Start-ups

Start-ups
Payment Solutions

50+
Start-ups

23

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Gaming

100+
Start-ups

>7%

>26%

start-ups
provide
enterprise
mobility
platforms

start-ups
use mobile
app as a
primary
delivery mode

Ingenious start-ups are emerging in


futuristic technology areas and delivering
domain-specic solutions
Internet
of Things

Founder worked with


Veritas
(part of Symantec)

Payments

Founder worked
with
PayPal

Cloud*

Big Data &


Analytics

Co-founders worked
with MindTree for
10+ years

Hardware

Founder worked
with Intel

24

TECH START-UPS IN INDIA

Cloud
Computing

Founder worked with


Intel & AMD

Founder worked with


Realcom Inc.

AdTech

Co-founders worked
with Bain &
Company

Security

Co-Founder worked
with Philips
Electronics India Ltd.

HealthTech

EduTech

Co-founders
worked with
Sun Microsystems

Founder worked
with
Cisco Systems

>25% start-ups leverage cloud as


the delivery platform

>7% start-ups provide enterprise


mobility platforms

Analytics & ERP emerge as key


cloud workloads

>26% start-ups use mobile app


as a primary delivery mode

Many start-ups indifferent to location of cloud datacentre

*Analysis based on a sample of 521 start-ups across years


Source: Zinnov Product/Digital Start-up Database

A BRIGHT FUTURE

Augmented
Reality

Gaming

Founder worked
with DreamWorks
Animation

Mobility*

Augmented/Virtual reality is already being touted as


one of the most signicant marketing transformations
Major Use Cases: Marketing & Advertising,
Healthcare and Visualisation Solutions

Quick Facts

30+
Augmented reality start-ups in India

Globally, the market size of


augmented reality based
solutions is expected to grow to

USD 2 billion by 2015*

Mumbai

Growth in AR is largely driven by


improvements in computing

hardware

and

internet

Healthcare
Communication
Virtual Trial Room

Virtual Jewellery
Trial Solution
Marketing &
Advertising
Hyderabad

2011
connectivity
Bengaluru

2012
Consumer mCommerce
is emerging as one of the top growth
areas for augmented reality
Virtual Home Design

Source: *Juniper Research, Zinnov Product/Digital Start-up Database

25

TECH START-UPS IN INDIA

A BRIGHT FUTURE

2011
Chennai

2012

Customer Engagement
Platform
Marketing & Advertising

Internet of Things is opening up signicant


whitespace opportunities for start-ups
Major Use Cases: Wearable Tech, Home
Automation and Fleet Management

Quick Facts

35+
IoT start-ups in India

India market
opportunity of

USD 10-12 billion


by 2020

GPS vehicle tracking


& fleet management
solutions
GOQii
Wearable
technology for a
healthier lifestyle

Ahmedabad

2012

Mumbai

USD 1 billion+

2014

Pune

investment committment by
Indian Government on building

A wearable device
to control any
smart device

2013

100 smart cities


Kochi

IESA (India Electronics &


Semiconductor Association) and

TiE Bengaluru have signed a


MoU to promote IoT start-ups

A connected c
car
platform for
remote monitoring

Source: *Machina Research; Zinnov analysis, Cisco, Zinnov Product/Digital Start-up Database

26

TECH START-UPS IN INDIA

A BRIGHT FUTURE

2012

Hardware is the new software and start-ups


are targeting niche areas with HW offerings
Major Use Cases: 3D Printing, Payment
Solutions and Automation

Quick Facts

30+
HW start-ups
in India

2013
NCR

Hardware
firms such as Nest,
GoPro, Beats,
Jawbone, Oculus have
recently accorded a
multi-billion dollar
valuation
Low-cost (<USD 200)
and efficient hardware is
becoming a great medium
for selling software and is
hence, attracting lot of
VC investments
3D printing market is
expected to grow at a CAGR
of 23% from 2013-20,
and reach USD 8.41 billion in 2020

2013
Bengaluru

2011

Mobile payment
solutions

Source: Huffington Post, Tech Crunch, Zinnov Analysis, Zinnov Product/Digital Start-up Database

27

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Warehousing and
distribution automation
products, fleet of
mobile robots

3D printer

2013

An HDMI dongle that


connects all the media to
the TV wirelessly

Over 300 BD&A start-ups offering huge


opportunities in both global and Indian market
Quick Facts

Major Use Cases: Big Data and


Social Media Analytics

350+
BD&A* start-ups in India

Big data & analytics


market in India to reach
~USD 1 billion in 2015,
growing 83% annually**
Machine-to-machine
big data analytics
platform

four-fold growth in
analytics start-ups in India
in the last four years

2012
2010

IBM innovation centre in


Bengalore to partner with
100 big data and Internet of
Things start-ups in India

*Big data and analytics


**Source: NASSCOM and Crisil, Zinnov Product/Digital Start-up Database

28

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Social media
analytics platform

Real-time predictive
analytics based on
machine data

Chennai

Bengalure

2011
2011

Kochi

Data visualisation
and analytics tool

With over 800 start-ups, cloud computing is


emerging as the fastest growing technology
Quick Facts

Major Use Cases: BD&A, ERP, Comm./Collaboration


and Productivity Solutions

800+
cloud computing
start-ups in India

2020,at least
80% of IT industry

By

growth would be
driven by cloud and
modern IT solutions

In India, the cloud market is


estimated to grow to
USD 4.5 billion by 2015*

>25% of start-ups in
India are already using
cloud as the primary
delivery medium
Source: *EMC and Zinnov; NASSCOM, Zinnov Product/Digital Start-up Database

29

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Self-service
platform for big
data analytics
Cloud-based billing
platform for subscription
business

2011
Bengaluru Chennai

2011

2012
Cloud-based
healthcare
CRM solution

2012
Cloud-based video
conferencing software

35+ start-ups in security domain; new delivery


models are emerging
Quick Facts

Major Use Cases: Cloud-based Security and Mobile


Security

35+
security firms in India

Enterprise security market in


India is expected to reach
USD 234 million by the end of
2014, growing at about 16%
compared to 2013

Enterprise mobile
security firm
working in the
space of "Bring
Your Own Device"

2012

India IT security
market is expected to
double by 2016

BYOD trend is fuelling


growth of solutions in
the areas of data
security and
authentication

2013

30

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Bangalore

Cloud-based mobile
security to secure
mobile applications
from getting hacked

Source: CRN, Economic Times , Zinnov Analysis, Zinnov Product/Digital Start-up Database

Chennai

Provider of innovative
pattern-based two
factor Authentication
Solution

2010
2011
Enterprise cloud security
solutions, focusing on
cloud security and
accessibility

Advances in technology and increased penetrations


of smartphones and internet are driving the
payments market growth trajectory upwards
Quick Facts

Major Use Cases: Online Payment Solutions

50+
payment solutions
firms in India
Digital payments in India
is expected to touch
USD 19.8 billion by
December 2014, a
40% increase
from previous year

Payments platform
to solve payment
issues faced by
eCom. firms

2010

2011
NCR

Online payment
solutions firm
Mumbai

2011

800

million online transactions


made in India in 2013

Delhi, Mumbai, Kolkata and


Chennai contributed about
60% of the total
digital payment gateway
market size in 2013
Source: IAMAI, Zinnov Analysis, Zinnov Product/Digital Start-up Database

31

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Comprehensive web
and mobile payment
solutions for merchants
as well as consumers

Bengaluru

2011
Paymentt d
device
i with a
card reader which can
be plugged into any
smart device or phone

With ~200 innovative start-ups, opportunities


under Edu-Tech are booming
Quick Facts

Major Use Cases: Technology Platform,


Educational Content and Skills Development

190+
Edu-Tech start-ups in India

All-in-one software for


managing schools

2013

Indiasonline education
market size is predicted to
grow to USD 40 billionby 2017

K-12 sector is expected to


reach USD 50 billion in 2015
growing at an estimated
Compound Annual Growth
Rate (CAGR) of 14 %

Over 150 million


students in India have
access to internet via
their mobile phones
Source: Yourstory.in, Zinnov Analysis, Zinnov Product/Digital Start-up Database

32

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Haryana

2013
Social learning network
for science for participants from academia to
corporate research

2013
Mumbai

2012
Cloud based
knowledge
management
platform

Bengaluru

Tablets for
education

Ad-Tech is disrupting the niche analytics market


Major Use Cases: Mobile Advertising, Marketing
Analytics and Ad Campaign Management

Quick Facts

100+
Ad-Tech start-ups
in India
Digital advertising
market in India which
was USD 503.56 million
in 2013, will witness
35% growth by
the end of 2014

Ad platform for
retargeting users
over mobile and
social ad ecosystem

Ad spending on mobile
devices growing at an
annual average rate
of 46% while that on
social media growing
at an annual rate of
of 41%
eCommerce, telecom and
FMCG and consumer durables
are the top three verticals

Source: IBEF, Livemint, Zinnov Analysis, Zinnov Product/Digital Start-up Database

33

TECH START-UPS IN INDIA

A BRIGHT FUTURE

2012

2014
NCR

social
i l referral
f
l
ad campaigns

2013 Pune
Bengaluru
AdTech product for
advertising &
marketing analytics

2012

Software ad campaigns
& marketing analytics

Tremendous opportunities exist in the Health-Tech


domain for start-ups
Quick Facts

Major Use Cases: Search, ERP and


Records Management

30+
Health-Tech start-ups in India

India'shealthcare ITmarket
is expected to grow to
USD 1.45 in 2018, more than
three times the USD 381.3
million reached in 2012

Doctor and hospital


search and
information portal
Cloud-based
management
software for doctors
and patients

Durgapur

2012
Pune
Accelerators dedicated solely to

2012

healthcare start-ups
are getting incepted in India

Indian health-tech
start-ups are proving
their capabilities in the
global market as well

Source: Economic Times, Zinnov Analysis, Zinnov Product/Digital Start-up Database

34

TECH START-UPS IN INDIA

A BRIGHT FUTURE

2012
Online healthcare
search

2013

Bengaluru

Patient records
management
software

Gaming market in India provides huge opportunity


for digital gaming start-ups
Quick Facts

Major Use Cases: Casual and Mobile Games

100+
Gaming start-ups
in India

Casual gaming in India


is expected to grow at a
CAGR of 32% over
2010-15 period

Online and mobile


games for various
platforms

iOS and Android game


2011
developer/publisher

2011
Mumbai

2011
Mobile casual gaming
revenue expected to
grow at a
CAGR of 27.5% over
2010-15 period

Pune

2010
l
A game d
development
studio creating realistic,
casual and social video
games for tablets and
smartphones

to 8 million people in
India claim to play on a
console regularly

Bengaluru

2012

Source: IBN Live; Zinnov analysis, Zinnov Product/Digital Start-up Database, FICCI-KPMG report

35

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Develop casual and


mobile games

SECTION III FUNDING LANDSCAPE


VCs/PEs

Incubators/Accelerators

2010

2014

100+

USD
13 million

USD
1,818 million

70+

80+

5+

25+

3/4 of Total
VC/PE Funding

Investmentson
the Rise
Angel Investors

50+

Delhi-NCR

2010

2014

73+

USD
4.2 million

USD
32.2 million

USD
1,574 million

Bengaluru
8+

36

TECH START-UPS IN INDIA

A BRIGHT FUTURE

90+

USD
524 million

An evolving ecosystem of VCs/PEs/angels/


incubators/support networks is accelerating the
growth of Indian start-ups
VC/PE funds
A

Angel Investors/Networks

Event Platforms/
Support Networks

Banks/Financial Institutions

Incubators/Accelerators

Academic/Training Programmes
Management
Programme for
Women Entrepreneurs
Wadhwani Centre
for Entrepreneurship
Development
Indian Institute of
Entrepreneurship

Support Ecosystem

37

TECH START-UPS IN INDIA

A BRIGHT FUTURE

133 Member
Lending Institutions

70+ VCs/PEs have invested over USD 2 billion in


Indian start-ups in the past ve years
Quick Facts*

Year-on-Year Investment Commitment in Start-Ups**


(in USD millions)
1,818

No. of Active Investors


5

41

83

70+

55

101

100+

Total No. of Deals

549
265

28

217

37

13
Average Deal Size (Overall)
2010

2011E

2012E

2013E

2014P

USD 4.2
million

USD 7.2
million

USD 3.9
million

USD 5.4
million

USD 7.7
million

USD 2.5
million

USD 3.3
million

USD 5.7
million

USD 4.9
million

USD 7.8
million

USD 9.4
million

Average Deal Size (B2B)


9
138

101
207
743

Investment Commitment in
Start-ups Excluding eCommerce**

USD 8.9
million

Average Deal Size (B2C)


USD 4.2
million
2010

USD 6.9
million
2011E

2012E

2013E

2014P

*Average Deal Size (Overall)/(B2B)/(B2C) is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals >= USD 100 million; (E):
Estimated, (P): Projected
**Total Investment Commitment is estimated based on Avg Deal Size (excluding deals >= USD 100 million) and Total No. of Deals; For the year 2014, Investment Commitment is
projected for the whole year based on the run rate so far
Source: Zinnov Product/Digital Start-up Database

38

TECH START-UPS IN INDIA

A BRIGHT FUTURE

VCs/PEs are making heavy investments in the


expansion stage
Year-on-Year VC/PE Investments by
Stage of Funding*

Illustrations of Start-up by Stage of Funding


Received Across Years

(in USD million)


Seed Stage
1,818 (P)

Early Stage

USD 0.5
million

USD 0.8
million

USD 4
million

USD 4
million

USD 0.5
million

USD 0.8
million

USD 3.5
million

USD 5
million

1,470

259
13
77
13

9
4
2010

USD 15
million

USD 19
million

USD 210
million

USD 45
million

USD 17
million

USD 17
million

USD 65
million

USD 627
million

2014

Start-up Inception Time


Seed Stage
(<=USD 1 million)

Early Stage
(>USD 1-5 million)

Growth Stage
(>USD 5-20 million)

Expansion Stage
(>USD 20 million)

Growth Stage

Expansion Stage

*Investment by stage of Funding is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment
projected in the previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

39

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Average VC/PE investment sizes have more than


doubled for younger start-ups
VC/PE Investments (USD million)
by Start-up Inception Time**

Average Deal Size by Start-up Inception Time*


(in USD million)

(in USD million)


1,1818 (P)
7.6

8.3
186

4.3

4.2
~2.0X
2010

~1.8X
2014

Inception Time: <2 Years

2012

2014

Inception Time: 2-5 Years

1,632

13

6.2
2.5
~2.5X
2014

2010

2010

Start-up Inception Time


<2 Years

2-5 Years

3.7

3.4
~1.1X

2014

2012

2014

Average Investment/Investor by Start-up


Inception Time*

*Average Deal Size and Average Investment/Investor is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals >=USD 100
million; (E): Estimated, (P): Projected
**Investment by Start-up Inception Time is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment projected in
the previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

40

TECH START-UPS IN INDIA

A BRIGHT FUTURE

VC/PE funding has evolved over the years and is


now a lot more holistic in B2C & B2B segments
Share of No. of VC Deals by Start-up Type
4%

Cumulative
B2C

B2B

63%

32%

Share
of B2C
focused
VC deals

33%

11%
14%
11%

11%
2%
11%
20%

9%
2%
9%
12%
15%

16%
67%

B2C/B2B

61%
40%

5%
2010

2012

2014

53%

Others*
Social media
Education
Travel
Aggregator &
online marketplace
eCommerce

Overall

Across Years
1%

Others**
34%
100%

64%

21%
14%
7%
14%

2010

2014
B2B

Share
of B2B
focused
VC deals

B2C

B2C/B2B
2010

28%

21%

8%
16%
16%
16%

21%

16%

2012

2014

28%
7%
9%
18%

41

TECH START-UPS IN INDIA

Productivity
Big data
& analytics

18%
ERP
20%
Marketing &
advertising
Overall

Note: Analysis based on a sample of 237 deals across years


*Others include comm/collaboration, productivity, gaming, and other consumer internet; **Others include apps dev/web dev, security solutions, HW, content
mgmt, infra mgmt solutions, mobility solutions & others.
Source: Zinnov Product/Digital Start-up Database

A BRIGHT FUTURE

Communication/
Collaboration

VC/PE funding is maturing signicantly in deal


value and in diversity of focus areas
Illustrative

Security
Solutions
CRM

Business
Analytics

Location Based
Services

eCommerce

Communication tool

Aggregator

Content
Management

Major
Investments
by Top 5
Investors in
B2B firms*
(Illustrative List)

Communication
tool
Major
Investments by
Top 5 Investors in
B2C firms*
(Illustrative List)

Travel

Business Resiliency
& Service Availability

CRM

CRM

Robotics

eCommerce

*Top 5 Investors based on total amount invested during 2010-14 in start-ups incepted during 2010-14 in B2B and B2C
Source: Zinnov Product/Digital Start-up Database

42

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Travel

eCommerce
eCommerce

eCommerce

Travel

NCR & Bengaluru continue to attract a large part


of VC/PE investments
Year-on-Year VC/PE Investments by Location*

Total VC/PE Investments by Location*

(in USD million)

(in USD million)

1,200

Includes ~USD 950 million


investment in Snapdeal,
Hike and Jabong

400

Amount Invested

350

1,574
1,128
333

300

Includes ~USD 250


million investment
in Olacabs

250

221

513
93

524

109

48

Others Pune Chennai Mumbai

Bengaluru

NCR

200
150
80
52
38
37
9 0.1
2012

100
50
9
4
2010

NCR
Pune

Bengaluru
Hyderabad

Mumbai
Others

Quick Facts
62
43
30
1.5
2014
Chennai

NCR and Bengaluru


account for ~3/4 of
the total investment

97% of funding in
NCR is towards
B2C start-ups

Over the past two years, NCR has seen the highest investments by VCs/PEs, followed by Mumbai
Chennai and Pune are also catching up fast
*Investment by Location is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment projected in the previous
slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

43

TECH START-UPS IN INDIA

A BRIGHT FUTURE

A number of VCs/PEs are maturing signicantly in


the Indian context
Analysis of Top 20 VCs/PEs (Based on Total Amount Invested)
No. of Deals: Low, Amt Invested: High

No. of Deals: High, Amt Invested: High

Softbank

Rank based on Amt Invested**

9
Avg: 2.1

8
7
6

Tiger Global
5
4
Avg: 3.6
3
Steadview Capital Bessemer
Matrix Partners
Intel Capital
Venture Cannan
Bharti Softbank
Kalaari Capital
Partners Partners
eBay &
SAIF Partners
Saama Capital
Ru-Net
IDG Ventures India
IndoUS
CDC Group
Holdings
Venture Partners

2
1
0

Accel Partners
Sequoia Capital
Helion Venture Partners

No. of Deals: High, Amt Invested: Low

No. of Deals: Low, Amt Invested: Low


0

Nexus Venture Partners

4
5
6
Rank Based on No. of Deals*

10

*Rank Based on No. of Deals: Percentile rank (on a Scale of 0-10) of 20 Investors based on the number of investment made during 2010-14
**Rank Based on Amt Invested: Percentile rank (on a scale of 0-10) of top 20 Investors based on total amount invested during 2010-14, The top investor is ranked 10, second one is
ranked 5 and rest of the investors are given percentile ranks
Source: Zinnov Product/Digital Start-up Database

44

TECH START-UPS IN INDIA

A BRIGHT FUTURE

550+ angel investors focusing on India market,


~8X growth in total investment since 2010
Angel Investors Ecosystem in India*

1:1

2010 (E)

2011 (E)

2012 (E)

2013 (E)

Number of
Active Angel
Investors
(Individuals)

8+

29+

48+

112+

Total No.
of Deals

19

45

95

73+

Amount
Invested

USD 4.2
million

USD 9.1
million

USD 23
million

USD 33.9
million

USD 32.2
million

Average Deal
Size

USD
80,000

USD
416,000

USD
476,000

USD
312,000

USD
368,000

(Excluding Outliers)

2014 (P)
90+
Total 550+ Angel
Investors Focused
on India Market

*Average Deal Size (Excluding Outliers) is based on publicly available deal values minus deals where an individual/Angel network has invested >=USD 1 million; (E): Estimated, (P): Projected
Amount Invested is projected for each year based on Average Deal Size (Excluding Outliers) and Total No. of Deals
For the year 2014, Total No. of Deals and Amount Invested is projected for the whole calendar year based on the run rate so far
Source: Zinnov Product/Digital Start-up Database

45

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Angel investments are accelerating for mature


start-ups
Angel Investments ($ Mn) by Start-up
Inception Time**

Average Deal Size by Start-up


Inception Time*

(in USD million)

(in USD million)

32.2 (P)
0.42
0.37

10.6

0.37
0.28

21.7

2011

4.2

2014

2012

2014

Start-up Inception Time


2010

2014

<2 Years
2-5 Years

Inception Time: <2 Years

Inception Time: 2-5 Years

Angel investment is not restricted to select areas, investors are ready to bet on innovative ideas
Past four years have seen a gradual shift in investment from the earlier dominant sectors to new upcoming sectors in both B2B and B2C
*Average Deal Size is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals where an individual/Angel network has
invested >=USD 1 million; (E): Estimated, (P): Projected
**Investment by Start-Up Inception Time is estimated based on Avg Deal Size (excluding deals >=USD 1 million) and Total No. of Deals, and using the Amount Invested projected in the
previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

46

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Similar to VC/PE funding, angel investments are


also getting a lot more holistic
Share of No. of Angel Deals by Start-up Type

5%
10%

Cumulative

19%
B2C

B2B

60%

34%

Share of B2C
focused
angel deals

19%
100%

26%
5%
21%
16%

48%

16%

13%
3%
13%
14%

Others*
Social media
Education
Travel

20%

Aggregator &
online marketplace

37%

eCommerce

16%

B2C/B2B

6%

2010

2012

2014

Overall

Across Years
Others**

5%
33%
56%

38%

67%

20%

Share of B2B
focused
angel deals

20%
100%

2010

2014
B2B

B2C

13%
13%
13%
20%

B2C/B2B
2010

2012

29%
47%
12%
12%
6%
18%
6%
2014

11%
13%
14%

ERP

14%

Productivity

19%

Big data
& analytics

Overall

Note: Analysis based on a sample of 200 deals across years


*Others include comm/collaboration and other consumer internet; **Others include apps dev/web dev, security solutions, HW, content mgmt, & others.
Source: Zinnov Product/Digital Start-up Database

47

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Communication/
Collaboration

Marketing &
advertising

Over 80+ business incubators and accelerators are


providing seed stage support to start-ups
Incubator/Accelerator Ecosystem in India
5+
MNC
Accelerators

25+
Private
Incubators

Incubated 60+ Start-ups

50+
Public
Incubators

Incubated 160+ Start-ups

Incubated 230+ Start-ups

Top Focus Areas in 2014

Consumer Internet

Big Data & Analytics

Productivity

Apart from on premise guidance and support, some incubators are also providing virtual incubation to start-ups
Incubators/Accelerators with exclusive focus on specific/niche areas are emerging in India
Source: Zinnov Product/Digital Start-up Database

48

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Unified Communication

GIS Location

Successful entrepreneurs are coming forward to


support other emerging start-ups
Indian entrepreneurs are mentoring start-ups through various channels

Mentoring
through
Incubators/
Accelerators

Entrepreneurs
turned Angel
Investor &
mentoring the
investee
start-up

GSF has roped in redBus


G
founder Phanindra Sama to
deepen mentoring and support
infrastructure

The Bansals of Flipkart made


T
seed investment in News in
Shorts & are mentoring the
start-up

How P2P mentoring


helps start-ups

*Source: The Economic Times

49

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Mentoring
through
support
platforms

Dorai Thodla, founder of


iMorph, Inc., provides
mentorship through
TiE Chennai

Mentors
from
Networks
In Mobi's co-founder and
CTO Mohit Saxena is
mentoring App Virality

Guidance from entrepreneurs who have already done it before


Help in building connections with other mentors, investors and customers
Act as a potential customers and test the product in beta stage
Provides much needed encouragement and motivation

Business incubators and accelerators provide the


much needed hand holding to the start-ups
Mentorship &
Networking

Connect entrepreneurs to peers, mentors and potential long-term advisors to the firm

Partnerships

Help start-ups build partnerships and business relationships to launch products in their
target markets

Workspace/Funds

Start-ups which are a part of the incubation programme are offered office/workspace,
shared administrative services and some even offer seed fund

36
Start-ups
have
graduated
from the
Accelerator
Programme

Connect with local venture funds and angel investors to raise funds

6
Conferences
/Events
have been
organised
to
showcase
start-up
talent

18
Angels are
associated
with GSF
Accelerator
programme

Source: GSF India, Microsoft Ventures India, Startup Village

50

TECH START-UPS IN INDIA

A BRIGHT FUTURE

64

150

Start-ups
Mentors
have
associated
graduated
with the
from the Accelerator
Accelerator
Programme

$215 K
Average
funding
received by
start-ups
part of the
Accelerator
programme

650+

50+

45+

Start-ups
are
supported
by
including
virtual
incubatees

Regular
incubatees

Partners
including
VCs,
angels,
banks

Event platform and support networks are fuelling


start-up growth
Number of National
Start-up Events

2014
2009-10

>12
2-3

Smaller group meetings happen almost every


weekend

Start-ups get access to mentors and experts; access to incubators is also fast tracked

Mentorship &
Idea Viability

Hands-on-experience where entrepreneurs and aspiring entrepreneurs find out the viability
of their start-up ideas

Technology/Start-up conferences organised where start-ups showcase their talent and


ideas to potential investors

Networking
& Funding

Connect start-ups with other entrepreneurs and thus help them build a network of
their own

eWeek:
Entrepreneurship
Week, Annual Event
14,000
5,000
Events
were
organised
in 2014

450

3,000,000

Participants
Member
took part in
Academic
Institutions the events in
2014
& partners
support
aspiring &
growing
entrepreneurs

Niche
Entrepreneur
Entrepreneurs
readers
stories have
provided
been profiled from India
networking
and
by YourStory
opportunities
across
via
the world
conferences
and meetups

Source: The Economic Times, National Entrepreneurship Network, Yourstory.in, Start-ups Unplugged

51

TECH START-UPS IN INDIA

A BRIGHT FUTURE

50,000

700,000

7,000

$120 Mn

Entrepreneurs Fund has


been
have attended
raised
the event

75
Start-ups
have been
launched

Multiple start-up specic academic/training


programmes are providing mentorship
to entrepreneurs
Consultancy

Provide consultancy and monitoring service to MSMEs/potential entrepreneurs and


enhance employability of participants

Training

Design and organise training activities for different target group and undertake research
in the areas relevant to entrepreneurship

Incubation

The training and academic institutions may also provide incubation support to start-ups

150+
Start-ups
have been
trained in
India

Faculty

35+

Faculty are a combination


of mentors who are
entrepreneurs, investors
and world experts,
and professors from
business school

Incubatees
till date

Source: Start-up Leadership, NSRCEL

52

TECH START-UPS IN INDIA

A BRIGHT FUTURE

77
Partners which
include academic
institutions,
government
agencies &
industry experts

16
Events have
been
organised till
date to
promote
entrepreneurs

SECTION IV EMERGING TRENDS AND


RECOMMENDATIONS
Increased M&A Activity

A
Enterprises acquiring start-ups

Start-up consolidating with Start-ups

Start-up

Start-up

Start-up

Enterprises

Talent acquisition

Accelerate consolidation

Technology gains to existing portfolio

Enhanced customer base

Favouring Factors to
Branch Out from India

Key Asks from the Government


Clear transparent framework for disbursement of the
start-up fund
Eligibility relaxation to participate in large scale
technology projects

Global Market
((USD) Opportunity

Revised TDS laws


Easy Access to
Capital in the US

Relaxation from banks to secure financing/funding


Tax saving schemes on funding
Special Regulatory Zones (similar to SEZ) to test
industry products

53

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Given the vibrancy in the ecosystem and its


potential, the M&A activity is on the rise in India
Large firms are acquiring Indian start-ups for talent and embedding innovative technology in the existing portfolio

Acqui-hiring

There's growing interest from Facebook, Google and Yahoo! in acqui-hiring from India

Technology
Acquisition

Oracle acquired Bitzer Mobile in 2013. Bitzer augments Oracles portfolio and is expected to be a core
component to its mobile security strategy

Start-ups are acquiring start-ups to accelerate consolidation and extend reach to existing customer base

54

Consolidation

Consolidation wave sweeping the consumer internet space


GoGrab.in merged with AnyCommerce in 2014
Flipkart acquired Myntra in 2014
Zovi acquired Inkfruit in 2013
Flipkart acquired Letsbuy in 2012

Customer
Acquisition

Goozop a global digital agency, acquired Red Digital, an Indian social media agency to increase revenue
from Indian operations

TECH START-UPS IN INDIA

A BRIGHT FUTURE

As M&A is witnessing increased momentum in India,


investors are getting more exit opportunities
Tech M&A in India
(Illustrative List)

USD
135 million
USD
25 million

USD 31
million

2011

>USD
10 million

Not disclosed

2012

Not disclosed

USD
136 million

2013

USD
62 million

USD
43.4 million

USD 300US
330
3 million

2014
USD
15
5 million

USD
15 million

Not disclosed

Not disclosed
Source: Venture Intelligence, YourStory.in, NextBigWhat.com, Others

55

TECH START-UPS IN INDIA

A BRIGHT FUTURE

USD
9 million

Start-ups are betting high on evolving ecosystem,


however, a number of challenges are constraining
the growth
Growth Barriers

With long sales cycles,


customer acquisition is a
major pain point
High likelihood of receivables
turning into bad debt
(5-10% probability)

Source: Zinnov, NASSCOM

56

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Despite maturing ecosystem


securing funding is tough
Start-up funding is perceived
as one of the most important
success criterion

Complex and stringent


government policies are a
major cause of concern
Lack of execution clarity on
existing policies creates state
of uncertainty

Demand for supportive government policies


continues to exist
Key Policy Related Asks from the Government

Clear and transparent framework for


disbursement of the ` 10,000 crore
start-up fund

Preferential treatments/relaxation of
eligibility criterion by government for
start-ups to participate in large scale
technology projects

Risk capital for first gen entrepreneurs,


growth capital for serial entrepreneur
and sector-specific allocations

3
5

Re-imagine TDS and allow start-ups to


pay taxes at the end of the year
(instead of tax being deducted at source)

Provide tax saving schemes on return


on VC/angel investments in start-ups
and build ecosystem excitement

4
6

Guidelines to public sector banks for


relaxation on debt financing terms/
collateral/invoice requirements for
working capital asks

Create Special Regulatory Zones (on the


lines of SEZ) with regulatory flexibility to
test best products in industries such as
VOIP, Healthcare, BFSI, etc.

Though the Government is making right efforts to make the start-up ecosystem more conducive to growth, there is still a need for clear and transparent guidelines
Source: Zinnov, NASSCOM

57

TECH START-UPS IN INDIA

A BRIGHT FUTURE

About NASSCOM 10,000 Start-ups


10,000 Start-ups is an ambitious attempt by Indias premier IT industry
body NASSCOM to scale up the start-up ecosystem in India by 10x. The
programme is supported by Microsoft, Google, Intel, Verisign & Kotak.
10,000 Start-ups aims to enable incubation, funding and support for 10,000
technology start-ups in India over the next 10 years.
The programmes vision is to:
Foster entrepreneurship
Build entrepreneurial capabilities at scale
Strengthen early stage support for tech start-ups
To meet these objective, the programme has brought together key
stakeholders of the ecosystem including start-up incubators/accelerators,
angel investors, venture capitalists, start-up support groups, mentors and
technology corporations. With 10,000 Start-ups NASSCOM aims to build
a vibrant ecosystem for technology entrepreneurship in India.
Indias largest platform to connect with the tech entrepreneurship
community
Under the aegis of 10,000 Start-ups, NASSCOM organises and supports
workshops, meet-ups, hackathon, pitches for technology entrepreneurs
building solutions for web and mobile in order to build a vibrant tech
start-up ecosystem in the country. Since its launch in April 2013, the 10,000
Start-ups has done about 350 events in 22 cities of the country which were
attended by a whopping 25,000 attendees.
In the last one and half years, 10,000 Start-ups has built a vibrant social
community for more than 100,000 followers and an opt-in mailing list of about
30,000 existing and aspiring entrepreneurs. The programme has also hosted
some of the global icons of the technology world like Eric Schmidt, Michael
Dell, Vinod Khosla, Sundar Pichai and more recently, Satya Nadella.

58

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Indias biggest tech start-up programme in terms of


impact.
After it was launched in April 2013, the 10,000
Start-ups programme has received over 9,000
applications from various parts of the country and about
500 tech start-ups have been shortlisted in 2 phases.
These start-ups have got the opportunity to pitch to more
than 30+ partners of the programme including leading
accelerators, angel investor networks and venture
capital rms.
These rms received access to a pool of mentors including
technology leaders, successful founders, domain experts,
angel investors, etc. Beyond this, they also received
platforms to meet large enterprises, system integrators
and strategic who could potentially be customers and
strategic partners. With the support of the Government
of Karnataka, NASSCOM also established a co-working
facility called Start-up Warehouse exclusively for tech
start-ups right in the heart of the city.
Through various initiatives, the programme has been
able to successfully impact 150+ technology start-ups
out of the 500+ who have been shortlisted under the
programme. These rms have raised funds, got into
acceleration programmes, found customers and onboarded mentors through the programme.
We look forward to scaling this number drastically in
the days to come!

Illustrative list of VCs/PEs and angel investors/


networks
VCs/PEs
Accel Partners

Freemont Partners

Norwest Venture Partners

Abhishek Goyal

GSF SuperAngels

Ratan Tata

Ascent Capital

Google Capital

Ojas Venture
Partner

Amit Ranjan

Indian Angel
Network

Ravi Gururaj

Avalon Ventures

Greylock Partners

Omidyar Network

Anand Ladsaria

Kanwaljit S Bombra

Ravi Kiran

Bertelsman

Helion Venture Partners

Qualcomm Ventures

Anand Lunia

Kishore Ganji

Ravi Trivedi

Ru-Net Holdings

Angel Prime

Krishna Motukuri

Rehan Yar Khan

Bessemer Venture
IDG Ventures
Partners

59

Angel Investors/Networks

Bharti Softbank

IndoUS Venture Partners Saama Capital

Anupam Mittal

Krishnan Ganesh

Sachin Bansal

Blackrock

Intel Capital

SAIF Partners

Bhupen Shah

Manav Garg

Samir Sood

Blume Ventures

InterWest Partners

Sequoia Capita

Bimal Shah

Manoj Menon

Sasha Mirchandani

CDC Group

Inventus Capital Partners Softbank

Binny Bansal

Mumbai Angels

Sharad Sharma

Cisco Ventures

Kalaari Capital

Steadview Capital

Calcutta Angels

Murali Venkat Rao

Sunil Kalra

Clear Stone
Venture Partners

KITVEN Funds

Telstra Ventures

Ccube Angels

Naveen Tewari

Umang Kumar

Draper Fisher
Jurvetson

Lightspeed Venture
Partners

Tiger Global

Chennai Angels

Nitin Aggarwal

Urrshila Kerkar

eBay

Matrix Partners

Unilazer Ventures

Deep Kalra

Nitin Singhal

Venkat
Vallabhaneni

Epiphany Ventures

Mayeld Fund

Vertex Venture
Holdings

Dinesh Aggarwal

Rajan Anandan

Vikash Taneja

Fidelity Growth
Partners India

Nexus Venture
Partners

Walden
International

Girish
Mathrubootham

Rajesh Sawhney

Vishal Gondal

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Illustrative list of incubators/accelerators and


support networks/event platforms
Support Networks/
Event Platforms

Incubators/Accelerators
5ideas

Kyron

Target Accelerator Program

In50hrs

91Spring Board

MICA Incubator: MICA-EDC

TBI BITS Pilani

LetsVenture

BitChemy Ventures

Microsoft Ventures

TBI IIT Delhi

Microsoft BizSpark India


Startup Challenge

Boot Up Factory

10,000 Startups:
NASSCOM

Catalyzer
CIE - IIIT Hyderabad

Manipal Institute of Technology


National Design Business
Innovation Centre
Incubator (NDBI) - NID Ahmedabad
TBI - NDRI Karnal
NSRCEL (IIM Bangalore)

NASSCOM Product Conclave/


Emerge Awards
NEN
NextBigWhat

TBI VIT

SME Joinup

Citrix Start-up Accelerator PitneyBowes Accelerator Program

The Fabric

StartDunia

Freemont Partners

RTBI - IIT M

Tlabs - Times Internet Group

STARTOHOLICS

Growth Story

SAP Startup Focus

TSC (The Startup Centre)

Startup Festival

GSF

SEED MDI

Veddis Advisors

Startup Weekend

Health Start

SIDBI Innovation & Incubation


Centre - IIT Kanpur

Venture Centre

CIIE - IIM A

IIITB Innovation
Centre - IIIT Bangalore

60

T-TBI (Technopark Technology


Business Incubator)

PayPal Incubator

Startups Unplugged

Venture Nursery

SINE - IIT Bombay

Villgro

Startups.in

Indian Angel Network


Incubator

Startup Oasis

Wadhwani Center for


Entrepreneurship Development
- ISB Hyderabad

TIE

Khosla Labs

Start-up Village

Zone Startups

Yourstory

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Disclaimer
Methodology and assumptions for the Analysis of Top 20 VCs/
PEs in Page No.43
1) This analysis is based on publicly available deals done by VCs/
PEs. It is not exhaustive in nature as this list may not include
some top investors as all their deals may not be available in
public domain
2) For ease of analysis, in deals involving multiple investors, the total
deal amount is split equally among investors. In deals where the
amount invested by each investor is available from public sources,
then in such cases the amount is allocated accordingly

61

TECH START-UPS IN INDIA

A BRIGHT FUTURE

The slides including names and logos of Start-ups/VCs/PEs/


Angel Investors/Angel Networks/Incubators/Accelerators/Event
Platforms/Support Networks/Academic/Training Programs/
Banks/Financial Institutions and pictures of start-ups Founders/
Co-Founders/CEOs are illustrative in nature, and the logos,
trademarks and pictures are owned by respective companies
The M&A deal values included in slide No.53 are sourced
from publicly available sources. In some cases this may be an
approximate value (not the actual deal value) as at times the deal
value available in public domain is based on analysts or industry
leaders estimates

List of Sources
Zinnov
Repository:
Zinnov
product/
digital
start-up
database

Public Sources:

NASSCOM 10,000
Start-up Database
Angel List
Yourstory.in
Techcrunch/Crunchbase

Primary
Interactions:
35+
Technology
product
companies/
start-ups
Interactions
with VC &
Angel
Investors

62

TECH START-UPS IN INDIA

A BRIGHT FUTURE

Venture Intelligence
Start-up Websites
VC Websites
Angel Networks
Websites
Media Articles

International Youth Centre


Teen Murti Marg, Chanakyapuri
New Delhi 110 021, India
T 91 11 2301 0199 F 91 11 2301 5452
research@nasscom.in
www.nasscom.in

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