India is moving from a services economy to a product-nation.<\/span><\/figure>\n<\/div>\nIn business, regardless of whether one is an entrepreneur or an investor, every decision in favour of something is a decision against something else. B2C startups valuations had become inflated and these consumer-oriented startups required \u2013 and continue to demand \u2013 vast marketing and advertising resources to attract fickle consumers; B2B companies, on the other hand, were attractive, their business models targeted loyal, identifiable clients who could be prospected and converted with far lower spends; and the opportunity to work alongside these founders and help them scale up for international markets has turned out to be a rewarding challenge.<\/span><\/p>\nIndia is moving from a services economy to a product-nation. Along with an increasing focus on creating IPs, entrepreneurs are creating capital-efficient platforms, and this augurs well for the VC industry. India has made remarkable progress in the last three years and moved ahead of the UK to become the third-largest startup ecosystem. Data from Tracxn (an independent analyst firm) indicates a total of 31 unicorns as of September 2019, of which seven acquired this status this year alone. With one of the world\u2019s largest pool of trained engineers and scientists, and a highly aspirational, career-oriented youth base, there is no dearth of talent in the country\u2019s tech and startup hubs that are being further encouraged by international and home-grown accelerators and incubators.<\/span><\/p>\nAlso read:\u00a0Angel Tax: Whopping 1100% jump in number of startups exempted in FY20 so far under Startup\u00a0India<\/a><\/strong><\/p>\nAccording to a NASSCOM report, the B2B sector accounts for 71 per cent of the unicorns in India; 57 per cent are from emerging and nascent sectors such as gaming, supply chain, logistics and automotive. India has seen a 33 per cent growth in deeptech startups: 18 per cent of these are leveraging deeptech, up from a mere 8 per cent five years ago.<\/span> Technologies like Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), Robotics and SaaS (Software as a Service) are moving decision-making up the value chain from post-facto to preventive to predictive or enabling faster decision making or even adding efficiency in the process.<\/span><\/p>\nThe growth in the economy is leading to multiple gaps that are best plugged by technology-driven services and products. Consequently, a new breed of entrepreneurs is focusing on enterprise-led opportunities with the backbone of deeptech platforms. AI, data analytics, and IoT are witnessing fastest adoption across Industry verticals. The same NASSCOM report states that there has been a 120 per cent YoY funding growth for AI startups (over $150 million invested in 2018) and a 500 per cent YoY ($2 million to $11 million) growth for blockchain funding (though on a smaller base). The advanced or deeptech startup pool has witnessed a 40 per cent CAGR since 2013. This is also confirmed by a recent TiE (The Indus Entrepreneurs) report that shows the largest share of investment is in these sectors. From an analysis of India\u2019s unicorns, a definitive trend is also emerging. B2B startups are more capital efficient compared to B2C unicorns.<\/span><\/p>\n(Sunil Goyal is the Managing Director at YourNest Venture Capital and VC Council member at IVCA. Views expressed are the author\u2019s own.)<\/i><\/b><\/p>\n
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