2012 was a milestone year for Indian startup ecosystem – right from increased activity in angel investment space to rise of the fast and furious ones.
Actually, 2012 was a warm-up year for Indian startup ecosystem and real action will happen in 2013. The signals are everywhere (eg.: Rise of Mobile Internet in India to India Online opportunity).
In no particular order, here are the top trends we are seeing in the startup ecosystem for the year 2013:
#1. Globally Local and Locally Global.
More startups will go global and as part of that, many will ‘quit India’. We have already seen quite a few of them (e.g. last couple of UnPluggd edition startups) moving out to US to setup business in Silicon Valley.
In some cases, it will be governed by product-market fit (that is, when products are mostly developed for Silicon Valley / similar markets) and in some cases, funding-product fit (think : Startup Chile).
#2. More B2B. Investors too love it.
Yeah baby. The truth is that building a consumer business in India is an uphill task and while the investment community has tasted B2C investments in categories like classifieds/ecommerce, B2B is still largely unexplored.
Given that 2013 will see a global slowdown in IT $$s coming to India, expect seasoned IT professionals to jump into the water. And the preferred ship would be B2B.
#3. More angel investment this year.
Entrepreneurs are turning angels (it is altogether a different matter that angels in India have traditionally been acting like Series A investors).
A lot of entrepreneurs are teaming up with CXOs and other networks to invest in early stage startups. This is the biggest positive trend we are witnessing.
In fact, raising angel round has gotten a lot easier than what it was in 2010.
#4. Series A Crunch.
Yes. It’s in the making. And it’s for real.
Already, startups who raised less than $2 million are finding it difficult to raise the Series A round. Also, investors are looking at revenue as the core traction metrics which we all know takes time to build in India.
#5. Dhandha (Business) Focused.
The bad news is that Instagram isn’t going to happen from India and serious startups do know about this.
The good news, however is that even early stage startups have now started believing that making money is a good thing. Quite unlike some of their Silicon valley counterparts.
#6. Rise of hyperlocal and LBS (finally!).
There is going to be a rise in hyperlocal businesses. We have seen several startups trying out hyperlocal over web, but guess what! Apps will drive adoption of such technologies and maybe, the web startups of 2008/2009 were way too early in this cycle.
#7. Apps will turn into a serious business.
Or rather, more business focused Apps will be developed.
The sad truth is that India based app developers are not that ambitious. That is, once the app gets published in the app store, it is considered as success.
And that will change. A few app developers have tasted huge $ucce$$ and they will serve as a role model for budding app developers. Most importantly, with companies like Google and Apple treating India at-par with rest of the world (when it comes to product launches), this will help create a better ecosystem for app developers.
Rise of Enterprise apps – right from apps built for restaurants/salons etc to apps for FMCG players is the nextbigwhat for apps.
#8. Collaboration. Partnerships.
It will happen.
Indians are known to not collaborate among themselves – but external market conditions will force them to revisit this.
Importantly, a lot of startups have reached a stage where they have built a solid core/niche around the business and need to look at complementary skills/markets to grow.
While the biggies live in ‘we will do everything on our own‘ world, startups will be forced to show more agility by their global competitors.
#9. M&A Activity.
Global businesses are eyeing the India opportunity and while they will continue to look at M&A as an entry strategy, even Indian companies will be forced to startup their M&A activity to stay competitive.
This, we certainly hope will trigger the much awaited M&A activity in the country.
#10. You tell us!
What are the exciting trends you are seeing in the market? What are the ‘hot’ sectors (no cloud is not a sector, please!)?
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Overall, an exciting year for the startup ecosystem. It can’t be better than this! If you are planning to do a startup and find yourself revisiting the same idea again and again, just JUMP. We are with you!
[This article is part of our 2012 Recap series, and is supported by CCAvenue.]
CCAvenue is India’s largest payment gateway solution powering thousands of eMerchants with real time, multi-currency, multiple payment options online payment processing services. The solution is powered by proprietary technology that integrates transaction-processing, advance shopping cart, auction payment collection facility, mobile page, risk assessment and fraud control, smart analytical dashboards, financial reporting and order tracking and many more features.
