April 2, 2023

Great Indian Mutiny

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2021, the year of unicorns for India’s emerging technology sector | The world

2021 was a great year for Sumit Gupta – he turned 30, got married and saw his startup become one of the new unicorns in the technology industry. .

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 so good for everyone,” Gupta said. “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 have emerged in India, with more than $ 1 billion worth of emerging private companies, proving the growing interest of investors in one country despite significant potential.

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

Traditionally, foreign investors in Asia have been in favor of China, with a population of over 1 billion and a population six times larger.

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.

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

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“I think India is 13-14 years behind China in terms of market size and size. At present, India’s digital market is less than US $ 100 billion, but that number could easily reach US $ 1 trillion or US $ 2 trillion in 10 to 15 years, ”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, ”said Masayoshi Sun, founder of Softbank this month.

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

Companies like the delivery application Zomato or beauty product site Nykaa went public with significant prices, making its 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 an economy struggling 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 job security.

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

In excess of money, companies are competing 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, who did not want to be named, explained. “Salary has been raised this year and it looks like everyone is being hired. People are constantly changing jobs,” he added.

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.”