In the weekly column we alternately write about innovation and economic trends in Asia.
(Photo: Klawe Rzeczy)
Bangkok India’s start-up scene is going in quick succession: As of Wednesday, the decisive number is 29. So many so-called unicorns – start-ups with a market value of more than one billion dollars – have been brought about by the booming digital economy in the country since the beginning of January emerged. At the beginning of August this value was a third lower.
The youngest member secured a place in the billion-dollar club on Tuesday: Licious, an e-commerce provider from Bangalore that specializes in meat and seafood and expects sales of the equivalent of more than 170 million euros this fiscal year.
Shortly before that, a tutoring platform on the subcontinent, with which children learn programming, among other things, an online marketplace for medium-sized industrial companies and a career app for workers and craftsmen had exceeded the billion dollar valuation mark. The latter even managed it at record speed: it only took 15 months from the debut in the app stores to the unicorn title.
The development is not only rapid in individual companies, but in India’s entire start-up ecosystem: Just a few years ago, the name unicorn actually seemed appropriate for the high-flyer start-ups: They made themselves as rare as the mythical creature from the fairy tale world .
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Between 2011 and 2018, India saw only one new unicorn on average each year. This year the reproduction time has now been massively reduced. Since the summer there has been a new copy every week. The once rare mystical animal now appears in packs in India.
India boxes well above its weight class
With a total of around 70 unicorns, India is only behind the USA and China, which each have several hundred billion start-ups. It is not surprising that the two economically most important countries in the world are ahead. But that India can outperform much larger economies like Japan, Germany and Great Britain is astonishing. For comparison: the market researcher CB Insights comes up with only 19 German unicorns.
There are two main reasons why the subcontinent’s start-up scene is so successful: Firstly, the number of talented founders in the country with 1.3 billion inhabitants is enormous. In view of the gold rush mood in the Indian Internet economy, which had spread in recent years with the persistent battles between Flipkart and Ola and their US competitors Amazon and Uber, more and more young Indians are choosing their own start-up instead of a corporate career. The greatest role model of this generation is Ritesh Agarwal, who founded his hotel start-up Oyo at the age of 19, which has made him the second youngest self-made billionaire in the world.
Second, the high demand from global technology investors for new hopes is fueling these success stories: This year venture capitalists have already invested more than 20 billion US dollars in Indian start-ups, more than twice as much as in the entire previous year.
The increased interest is not only due to the fact that Western investors are increasingly avoiding China because of its unpredictable regulation and are now seeing India as the first possible alternative for their emerging markets. With more than 600 million Internet users, the number of which should increase to almost a billion by 2025, India is naturally predestined to decisively shape the digital age – this has also been recognized by investors from Silicon Valley.
For the German start-up scene this means that if they want to catch up on the unicorn hunt, they will not succeed even with the best ideas, as long as they are primarily aimed at customers in their home country. Whoever wants to be at the top of the world must also have something to offer a billion-dollar population.
More: China’s tech competitors are hunting for billions