Sumit Gupta has had a big year; turn 30, get married and watch your start-up become one of India’s newest tech unicorns.
Embarrassed by the coronavirus pandemic and too busy growing and securing funding for its CoinDCX cryptocurrency platform, his team finally took a few days to the beach in Goa to celebrate recently.
“It was very enjoyable for everyone,” said Mr. Gupta. âIt was a very, very exciting trip. I have learned a lot … the future of India is very bright.
This year 44 Indian unicorns – private start-ups valued at over $ 1 billion – were hit as investors piled money in a country long neglected despite its vast potential.
Foreign funds invested more than $ 35 billion in Indian start-ups in 2021 – a tripling of 2020, according to data compiled by Tracxn – buying into everything from FinTechs to healthcare to games.
Foreign investors have long preferred China, another Asian country with over a billion people, but times are changing.
In the field of start-ups, investors this year invested 54.5 billion dollars in Chinese companies, against 73 billion dollars in 2020, according to an analysis of GlobalData.
India, on the other hand, has become more attractive, with its large pool of well-educated entrepreneurs, increasing the number of companies using rapidly developing digital infrastructure.
âIndia is really that last frontier where businesses can attract a sixth of the world’s population,â said Siddharth Mehta, founder of investment firm Bay Capital Partners.
âI think India is around 13-14 years behind China in terms of the size and scale of the market. India’s global digital market is around less than $ 100 billion today, but that number can easily grow to $ 1,000 billion or $ 2,000 billion over the next 10 to 15 years.
Among those who have been attracted are the Japanese SoftBank, which invested $ 3 billion in India this year, as well as the Chinese Jack Ma and Tencent and the Americans Sequoia Capital and Tiger Global.
âI believe in the future of India. I believe in the passion of young entrepreneurs in India. India will be great, âSoftBank founder Masayoshi Son said earlier this month.
Indian tech has also seen a record number of initial public offerings this year.
The companies that went public included the Zomato food delivery app and the Nykaa beauty platform, posting huge premiums over their IPO prices and turning their founders into billionaires.
At their October high, Indian stocks had risen more than 125% from their April 2020 low, becoming one of the best performing equity markets in the world.
But some experts warn that many of these companies can be grossly overvalued.
For example, local FinTech giant Paytm, the biggest IPO of the year, has yet to make a profit and its share price is 40% lower than its IPO valuation .
India’s record year for start-ups also masks serious problems for an economy struggling to provide jobs for the 10 million young people who enter the workforce each year.
Desperate for employment, many take low-wage jobs in the âgig economy,â earning as little as 300 rupees ($ 4) a day with little or no job security.
But for white-collar start-ups, demand for skilled workers has exceeded supply this year.
Full of cash, companies compete with each other to recruit and retain top talent, offering cash, stocks and even motorcycles and tickets to cricket matches as incentives.
âRecruiters contact us all the time,â said a technical employee.
âSalaries have swelled over the past year and it feels like everyone is hiring. People are constantly changing jobs.
Mr. Gupta of CoinDCX, fresh off his beach vacation, was upbeat.
âIf you stay persistent it is very possible to create a unicorn – especially if you live in a country like India, which is full of opportunities,â he said.
Update: January 1, 2022, 4:00 a.m.