I think the current situation of India is similar and can be compared to the DotCom bubble of '90s (in US). In Bengaluru it is said that, in almost every home you will find one CEO of a startup.
I might be wrong but just thinking out loud.
For example:
PhonePe app - It's just a payment transfer app by Flipkart (although it is much better than GPay, in terms of usage speed) - its current valuation is around 7-8B+ USD. I don't get the much reason. There are no intermediary charges as PhonePe uses UPI Payment Interface (https://www.npci.org.in/product-overview/upi-product-overvie...)
I have always suspected the beefed up valuations of payment apps in India related to lack of regulations in place for use data protection and privacy. Most of these apps seem to be making money on some sort of data driven business models.
If that is true, the valuations do make sense. If you can provide purchase power metrics for half a billion users, a $7B valuation might start to seem modest.
Irony that you're downvoted for staying a very relevant fact. Most of these startups that have raised huge funds are also burning cash like anything. And established startups like Oyo and Zomato are facing backlash from their business partners and couldn't expand to venture into new areas to find profitability.
Profitability is still a very long way for most of these b2c startups
The money comes in from businesses who are offered loans based on the transaction volume PhonePe sees. Online businesses that use "Pay with PhonePe" links have to pay commission. In the broad sense, if it scales, it's a pretty decent business.
I really really hope the Indian "startups" aren't closet selling $2 for $1. Given the slew of discounts, cashbacks, and offers, I am left to wonder if at the cost of growth, the fund management has gone to the wolves.
The Indian consumer is very fickle and always shops for cheapest alternatives and looks for the best deals. I'm yet to see any kind of loyal behaviour, though, I must say, they prefer to trust only the bigger brands (in terms of presence) when they do occasionally spend big.
Another symptom is a lot of businesses acting like software startups riding the wave, when in reality, as a reductionist argument, could be simply classified as companies that get mobile and internet.
It also isn't uncommon for the business to exploit the low income wage structure to improve margins. Worker rights, contractor rights, in this gig economy is absent.
That's not to say some of these startups aren't delivering real value. They are... but race to the bottom seldom ends well for countries plagued with corruption, income inequality, and unemployment; and burderned with looming humanitarian crisis.
In my personal opinion, businesses serving other starups / enterprises (Zscaler, Cloudflare, Brex, Stripe, GitHub, slack, aws et al) remain the most secure of the current lot.
I don't think this disproportionate infusion of captial is going to end well: There do exist super valuable businesses but I highly doubt if they can justify their hype when they do go public. The investors are usually smart, but I hope they don't get dragged into hopeless optimism or become desperate.
Some engs and mgrs arguing the Indian market is better than Canada are overestimating their monetary gains and grossly underestimating the environmental, political, and societal benefits, imho.
I love this argument, there’s a lot of nuance to unwrap here.
I see a lot of India startup cofounders who are really smart but fail to understand the challenges (often out of their control) that are in their way of making their businesses sustainable.
Aside from the political, regulatory and socioeconomic challenges, India has a huge void to fill in terms of energy needs, manufactured goods, labor productivity and infrastructure before the economy becomes efficient enough to support high level services. The startup ecosystem, barring a few companies in logistics, is not focused on making any tangible improvements in productivity in the larger economy, for example, to start moving people away from agriculture.
This is really impressive: "It’s fascinating turnaround for the nation, which just 10 years ago had a very small startup ecosystem. In a recent interview with TechCrunch, Paytm founder and CEO Vijay Shekhar Sharma recounted the early days of One97, the parent firm of Paytm, and how difficult it was for him to raise a few hundred thousand dollars."
The USA took literally all of India's top engineering talent for the past ~25 years, but thankfully that trend is reversing now. While improvements in standard of living, more urbanization, emergence of a real middle class, more local opportunities etc. are definitely all valid reasons for this, I believe the biggest one is that there is no path to US residency or citizenship for an Indian today. Even those educated at top universities there have to eventually come back (and that is great!).
Not sure that it's necessarily great. I love my home country and all but I hate that I don't have the same freedom of movement other Nationals seem to have just by birth no matter how hard I work for it.
Indian tech startups have already raised $11.3B -- the new financing rounds of Swiggy, Zomato, and Paytm if they happen this year and if it is indeed of $3B size would make Indian tech startup's raise this year to over $14.3B.
We're currently having issues hiring in Bangalore. We've been looking for a ML Infra person to help during non-US hours.
Unfortunately hiring for such a position is bimodal in that market, you've got people with substantial experience really know their stuff, most of whom are getting snapped up by startups who pay much better, and then you've got the people who just threw ML on their LinkedIn to get into your search and can't tell you what a linear regression is.
Even if you pay half the amount you pay avg (let's say 60K USD) in US, that will be very very good amount for an Indian living in India (30K USD/year is very good for living in India).
So, if you expect good work and don't want to pay even the amount which is equivalent to what an entry-level developer in US might get, then you will never get good developers.
I always found the term “Foodies” strange. Given that we are hardwired to enjoy food and literally need it to survive, something is terribly wrong with the person’s health if they’re not a “Foodie”. Have you met someone who says they hate food and they only have it because their bodies need it to survive?
Indians are no more foodies than the Americans or the Italians or the Japanese. Food is a central aspect of basically all cultures.
I work at Ather. Currently, the customers are loving the product and we are booked till first quarter of next year in Bangalore & Chennai. We have done 5 software updates to the vehicle since launch in Bangalore. Planning to launch in couple of other cities by second quarter 2020 probably.
Ather is not only going to face competition from incumbents in the ICE scooter vertical, it is going to face competition from cheap Chinese scooters that are being tested and assembled all across small workshops in India. I think the cheaper scooters will do really well with price sensitive and slightly less brand conscious customers in tier 3 cities.
Ather has been doing an amazing job with their first vehicle, I'd definitely purchase one of I were still in Bangalore. I have high hopes for more in the future from them.
Ather Energy will have stiff competition from Bajaj's new offering. Bajaj already has decades of manufacturing experience, tons of capital, and a trusted brand name.
I'm afraid given the lack of awareness on what exactly UPI is (without considering usage) and the ability of politicians to kill projects for bribes, it may be eventually replaced by the wallet model. Corruption is a huge issue in India which contributes to loyal users eventually leaving the platform. Zomato, Swiggy and UberEats have had huge growth over the last year but I see a lot of regular users (office goers, bachelors living alone or with other bachelors...) thinking hard before ordering food. The number of quality restaurants are in less ratio and there is only a subset of them being consistent. A huge portion of this quality restaurants offer cuisines not Indian (Thai, Chinese, Italian, American..) which is not preferred routinely. My guess would be, growing up most are accustomed to Indian cuisine and the cost factor. Majority of the restaurants cater to offers and provide cheap food and lack basic hygiene and food preparation standards. This "restaurants" (most of them have now converted to takeaway only) should have been closed after inspection(s) but bribe and stay alive. This startups have enabled this restaurants to thrive and profit just by providing cheap food and cutting costs (waiters, restaurant space...). Most of this "quality restaurants" have always had delivery options and so this startups are not providing much value to them or consumers. Unless better food preparation standards are followed along with it being transparent loyal customers will be a tiny minority and majority will try to exploit the offers and leave. This is amplified (anecdotal, not verified statistically) by health issues of frequent users due to poor quality food.
Providing cheap daal, rice and butter chicken is a recipe for a race to the bottom. I can see why, as a restaurant owner, you might not want to cater to that market. There's more profit in going after the customers who are looking for a new experience and will pay for quality and exoticness.
IMO the biggest Indian startups are dramatically reducing the cost of urban living. The fact that India's cities are heavily disorganised counter intuitively helps in this.
The other sectors which is mostly overlooked but just getting started are military startups. IMO this should also scale dramatically over the next decade.
This number might be a record but my prediction is that it would rapidly climb higher over the next decade or so.
More like $30-$40 billion not $200 billion. The current PPP multiplier is somewhere between 3 and 4.
PPP is most useful when looking at domestically manufactured items and services. When looking at anything that needs to be imported, normal exchange rates are a much better tool. In fact due to import duties in India, many international goods are more expensive in India that in most of the west.
Everything speculated here is VC money and financial bubble with unrelaible financial values. Zomato, uber, paytm, flipkart throw discounts at the rate of losses. May be few can survive at the end. This hurts a lot for SMB too.
I'm no expert, but I'd imagine that India being the world's largest democracy is not guaranteed to be a good thing given that only 33% of Indian citizens get through high school (and 8% graduate college). Many politicians are themselves uneducated, and it's easy to sway the opinions of the masses using religion and hatred as leverage.
I dont think is that much easy, because it will be a different kind of game, in a different world, and maybe in the meantime what we understand of the industry (serial production of goods) can change a lot in the future.
First theres human behavior into play, and consumerism. We have been changing a lot of our daily habits through time, because we now live much more in the digital realm, making a lot of phisical things less valuable. We are sharing more, using less goods made of plastic, wood, steel. Our relation to nature and the climate change will force us to rethink the way we behave, our consumerism, what we use and how we use it. The demand will probably drop also because we are making less babies..
For instance automation, AI, Solar, batteries, and 3d printing can make it cheaper to produce things in your home.
And if we still have the same industry in the future, China has a lot of people, and with the industrial park they have now, even with salaries getting higher, it would be not easy even for India to take that spot. This people are insanelly productive already.
Also, if they reach the next level, which is pure automation, it doesnt matter how cheap and productive other humans will be, it will never be enough.
The only way to take the spot from China now will be a industrial paradigm shift, and i gave some examples of how this may happen.
Predicting the future is really hard, and is hardly as linear as we are inclined to think. (For instance what would be of US without WWI & WWII or without the Russian revolution of 1917? Both are 'black swan' events no one can predict that changes everything we know)
(Please, pardon me for any broken english i have in this text)
You can probably keep hoping. India has some incredible human capital in the form of the upper castes, but China also has a ton of human capital, plus a monoculture (the Han Chinese are the largest single ethnic group on the planet) that makes coordinating societal and economic change way easier. India is a mishmash of dozens of different ethnic groups that have been further factionalized by 1700 years of the caste system.
Yes we should freeze everyone's growth and maintain the status quo. Clearly only the Western nations deserve a high standard of living. The others need to make sacrifices for the greater good.
[+] [-] harshvladha|6 years ago|reply
I might be wrong but just thinking out loud.
For example: PhonePe app - It's just a payment transfer app by Flipkart (although it is much better than GPay, in terms of usage speed) - its current valuation is around 7-8B+ USD. I don't get the much reason. There are no intermediary charges as PhonePe uses UPI Payment Interface (https://www.npci.org.in/product-overview/upi-product-overvie...)
[+] [-] omk|6 years ago|reply
If that is true, the valuations do make sense. If you can provide purchase power metrics for half a billion users, a $7B valuation might start to seem modest.
[+] [-] amrrs|6 years ago|reply
Profitability is still a very long way for most of these b2c startups
[+] [-] heroic|6 years ago|reply
[+] [-] bahularora|6 years ago|reply
[+] [-] amadeuspagel|6 years ago|reply
[+] [-] ignoramous|6 years ago|reply
The Indian consumer is very fickle and always shops for cheapest alternatives and looks for the best deals. I'm yet to see any kind of loyal behaviour, though, I must say, they prefer to trust only the bigger brands (in terms of presence) when they do occasionally spend big.
Another symptom is a lot of businesses acting like software startups riding the wave, when in reality, as a reductionist argument, could be simply classified as companies that get mobile and internet.
It also isn't uncommon for the business to exploit the low income wage structure to improve margins. Worker rights, contractor rights, in this gig economy is absent.
That's not to say some of these startups aren't delivering real value. They are... but race to the bottom seldom ends well for countries plagued with corruption, income inequality, and unemployment; and burderned with looming humanitarian crisis.
In my personal opinion, businesses serving other starups / enterprises (Zscaler, Cloudflare, Brex, Stripe, GitHub, slack, aws et al) remain the most secure of the current lot.
I don't think this disproportionate infusion of captial is going to end well: There do exist super valuable businesses but I highly doubt if they can justify their hype when they do go public. The investors are usually smart, but I hope they don't get dragged into hopeless optimism or become desperate.
Some engs and mgrs arguing the Indian market is better than Canada are overestimating their monetary gains and grossly underestimating the environmental, political, and societal benefits, imho.
PS Indian startup scene investments tracker: https://trak.in/india-startup-funding-investment-2015/
[+] [-] blueblisters|6 years ago|reply
[+] [-] jsondiv|6 years ago|reply
[+] [-] paxys|6 years ago|reply
[+] [-] ramraj07|6 years ago|reply
[+] [-] limeman|6 years ago|reply
[+] [-] aditya|6 years ago|reply
[+] [-] jmsflknr|6 years ago|reply
[+] [-] GaryNumanVevo|6 years ago|reply
[+] [-] harshvladha|6 years ago|reply
Even if you pay half the amount you pay avg (let's say 60K USD) in US, that will be very very good amount for an Indian living in India (30K USD/year is very good for living in India).
So, if you expect good work and don't want to pay even the amount which is equivalent to what an entry-level developer in US might get, then you will never get good developers.
[+] [-] snicker7|6 years ago|reply
[+] [-] pansinghkoder|6 years ago|reply
I am trying to keep tabs on electric two-wheeler startup industry in India. Ather energy is emerging as a big name. Anyone knows how they are doing?
[+] [-] spectramax|6 years ago|reply
Indians are no more foodies than the Americans or the Italians or the Japanese. Food is a central aspect of basically all cultures.
[+] [-] amd64|6 years ago|reply
[+] [-] blueblisters|6 years ago|reply
[+] [-] limeman|6 years ago|reply
If they are affordable such smartphones cost, electric vehicles are going to be popular and that will be breakthrough.
The foolish government keeps on increasing petrol price and squeeze blood out of peoples.
[+] [-] pcnix|6 years ago|reply
[+] [-] puranjay|6 years ago|reply
[+] [-] bigil|6 years ago|reply
[+] [-] llampx|6 years ago|reply
[+] [-] modi15|6 years ago|reply
The other sectors which is mostly overlooked but just getting started are military startups. IMO this should also scale dramatically over the next decade.
This number might be a record but my prediction is that it would rapidly climb higher over the next decade or so.
[+] [-] NTDF9|6 years ago|reply
Imagine how much new economic activity that is for a country whose GDP is only $2.5T
[+] [-] aatharuv|6 years ago|reply
PPP is most useful when looking at domestically manufactured items and services. When looking at anything that needs to be imported, normal exchange rates are a much better tool. In fact due to import duties in India, many international goods are more expensive in India that in most of the west.
[+] [-] karthikshan|6 years ago|reply
[+] [-] limeman|6 years ago|reply
[+] [-] puranjay|6 years ago|reply
[+] [-] Lucadg|6 years ago|reply
[+] [-] avocado4|6 years ago|reply
[+] [-] sombremesa|6 years ago|reply
[+] [-] oscargrouch|6 years ago|reply
First theres human behavior into play, and consumerism. We have been changing a lot of our daily habits through time, because we now live much more in the digital realm, making a lot of phisical things less valuable. We are sharing more, using less goods made of plastic, wood, steel. Our relation to nature and the climate change will force us to rethink the way we behave, our consumerism, what we use and how we use it. The demand will probably drop also because we are making less babies..
For instance automation, AI, Solar, batteries, and 3d printing can make it cheaper to produce things in your home.
And if we still have the same industry in the future, China has a lot of people, and with the industrial park they have now, even with salaries getting higher, it would be not easy even for India to take that spot. This people are insanelly productive already.
Also, if they reach the next level, which is pure automation, it doesnt matter how cheap and productive other humans will be, it will never be enough.
The only way to take the spot from China now will be a industrial paradigm shift, and i gave some examples of how this may happen.
Predicting the future is really hard, and is hardly as linear as we are inclined to think. (For instance what would be of US without WWI & WWII or without the Russian revolution of 1917? Both are 'black swan' events no one can predict that changes everything we know)
(Please, pardon me for any broken english i have in this text)
[+] [-] scarejunba|6 years ago|reply
[+] [-] yumraj|6 years ago|reply
[+] [-] toasterlovin|6 years ago|reply
[+] [-] sunasra|6 years ago|reply
[deleted]
[+] [-] pearjuice|6 years ago|reply
[deleted]
[+] [-] dang|6 years ago|reply
https://news.ycombinator.com/newsguidelines.html
[+] [-] unknown|6 years ago|reply
[deleted]
[+] [-] lowiqprogrammer|6 years ago|reply
[deleted]
[+] [-] hos234|6 years ago|reply
[+] [-] ycombonator|6 years ago|reply
[deleted]
[+] [-] dang|6 years ago|reply
https://news.ycombinator.com/newsguidelines.html
[+] [-] GrayTextIsTruth|6 years ago|reply
we chant as we march to our death.
India is starting to boom now that climate crisis is getting worse.
[+] [-] rrrazdan|6 years ago|reply