2013 was a great year for Indian startup ecosystem. The year witnessed some of the defining trends in the ecosystem. We at NextBigWhat certainly believe that these trends will help shape the future of technology startups in the next few years.
Rise of Acqhires.
Traditionally, Indian corporates have always believed in ‘we can build anything. we will not partner or acquire.’ Building anything is easy (after all, it’s a resource game) – we will put in few resources and voila!
But times have changed. It’s not just about developing alone – there is a lot of product management/marketing/messaging that needs to happen. And the good news is that corporates don’t get it (yet) and given the speed at which the world is moving, Indian corporates cannot afford stagnancy anymore. More than the product, they need the teams and a fresh injection of innovation DNA.
That’s precisely what happened in 2013. That is, Rise of AcqHires and Smaller Exits.
For instance, Times Internet acquired MensXP/gawbl. One97 acquired Plustxt. Snapdeal acquired Shopo. BuyThePrice was acquired by Tradus. FirstPost acquired FakingNews, Kuliza acquired Adepto. Games2Win acquired FactorRy. Luxury portal, BornRich was acquired by Canadian firm, Valnet.
Ofcourse, some of these are acqhires and some were forced by investors, but the good news is exits are happening and unlike the earlier days, when startups had no option but to shut down (and go thru’ the societal pressure), these exits (big or small) provide a re$pectable option for entrepreneurs (and angel investors). This massively improves the confidence of entrepreneurs to tinker/hack/start.
Acqhires trend is also fueled by the rise of MNC Competition in India. Companies like Google, Amazon, Microsoft etc are far more aggressive in Indian market than they were 2 years back.
Plus, let’s also appreciate the growth of local market (though not at the scale one would like to see) which is driving companies to acquire startups and grow their offering$.
The BIG Exits.
Note the rise of domestic M&A – this is mind blowing and we expect to see more of these in the year 2014.
Funding Trend : Enterprise. B2B is Sexy!
Enterprise is back again. In SAASy model, though. In 2013, Enterprise startups cornered almost 57% of the funding.
Indian Startup Braindrain
The Indian startup braindrain continued in 2013. Given that the local market is still not big enough, most of the enterprise startups are moving their headquarters/offices to Silicon Valley (helps in fund raising as well). India, of course remains the development center.
There is a sudden interest in Indian startup ecosystem – not just from media (like Techcrunch/Forbes etc), but also from global accelerators and incubators.
For instance, Coke and Target are launching their accelerators in India – so is UK’s Techhub.
Ecommerce : It’s not for kids
Post the bloodbath in Indian ecommerce segment, the category from a funding point of view has been all about the big boys only.
Most Active VC Fund
Nexus Venture Partners topped the list, followed by Accel and Sequoia Capital. As far as angel funds are concerned, IAN signed 18 termsheets.
Hardware is Sexy. Almost.
Apps are actually turning out to be a serious business!
Like we shared in our 2013 forecast (read : 10 Indian Startup Trends of 2013: Rise of B2B, Quit India), apps have gained consumer acceptance. Agree that apps are still a lot about entertainment and utility value, but rise of messaging apps and increase in mobile-transactions certainly holds a bright future.
What in your opinion were the 2013 trends in startup space?
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