2021 is the year of unicorns for India’s emerging technology sector

First change: 31/12/2021 – 09:08Last modified: 31/12/2021 – 09:06

After a busy month of trying to expand and secure funding for its CoinDCX cryptocurrency site, the Gupta team finally took a few days off to celebrate a successful year on the Goa coast.

“It was great for everyone,” Gupta told AFP. “This is a very exciting journey. I have learned a lot … The future of India is very bright,” he added.

This year, 44 new unicorns appeared in India, worth over $ 1 billion by emerging private companies, demonstrating growing investment interest in a country despite significant potential.

According to data compiled by the Tracxn cabinet, foreign funds invested more than $ 35 billion in Indian start-ups by 2021, and by 2020 the amount will have tripled. These investments are spread across all types of sectors: from technology finance to healthcare to gaming.

Traditionally, foreign investors in Asia have been pro-China, with a population of over 1 billion and a six-fold economy.

But the move to closely monitor Beijing’s powerful digital sector and control big business has alienated investors. According to GlobalData analysis, investments in emerging Chinese companies will fall from $ 73 billion in 2020 to $ 54.5 billion in 2020.

On the contrary, India has become more attractive with a long staff of well-trained entrepreneurs using fast-growing digital infrastructure.

“India is the final frontier where business can attract one-sixth of the world’s population,” said Siddharth Mehta, founder of Bay Capital Partners, an investment firm.

“I think India is 13-14 years behind China in terms of market size and size. Currently, India’s digital market is under $ 100 billion, but that figure could easily go up to a trillion or two. Between 10 and 15 years, trillions of dollars.” he said.

“India will be better”

Those who fell in front of the charm of the Indian entrepreneurial universe include Japanese Softbank, Chinese Alibaba or Tencent or American Sequoia Capital and Tiger Global.

“I believe in the future of India. I believe in the interest of young entrepreneurs in India. India will be better,” Softbank founder Masayoshi Sun said this month.

The Indian technology sector has also set a record for public offerings for sale this year.

Companies like delivery application Zomato or beauty products site Nykaa went public with significant prices, which made their founders billionaires.

At the peak in October, stocks in India rose more than 125% from their lowest point in April 2020, making it one of the best performing exchanges in the world.

Exaggerated companies

But some experts warn that some of these companies may be exaggerated.

For example, technology finance company Paytm, which made the biggest IPO of the year, is still unprofitable and its shares are 40% lower than their initial valuation price.

The frenzy of the new unicorns does not hide the serious problems of the economy that struggle to absorb the 10 million young people who enter its job market each year.

In the pursuit of work, many engage in low-paying jobs on the “kick” or share the economy to earn just $ 4 a day without any job security.

But for professionals in the startup industry, the demand for skilled workers is higher than this year’s distribution.

Overwhelmed by money, companies compete for higher salaries, stocks and incentives to buy tickets for motorcycles or cricket matches, and to add and retain talent.

“Recruitment agencies always contact us,” an employee of the department explained to AFP anonymously. “Wages have been raised this year and it looks like everyone is being hired. People are constantly changing jobs,” he said.

New to his beach vacation, Gupta is optimistic. “Creating a unicorn is very possible if you persevere, especially if you live in an opportunity-rich country like India.”

© 2021 AFP