2019 In Review: Global Tech Startups, Investors Who Embarked on India Journey

This article is part of Inc42’s special year-end series — 2019 In Review — in which we will refresh your memory on the major developments in the Indian startup ecosystem and their impact on various stakeholders — from entrepreneurs to investors. Find more stories from this series here.

This year was India’s moment to shine on the global stage as giants of many industries made their way to India. We saw some big names queuing up for India launches and investors pumping in a great deal of money.

As India continued to stay a hot breeding ground for startups, international private equity investors ramped up their investments in Indian startups. The sectors that have been promising for global marquee investors are electric vehicles, fintech, digital entertainment, agritech and edtech.

As we approach another promising year for Indian startups, here is a look at international entrants into India in 2019.

Spotify: World’s Largest Music Streaming Service Arrives In India

Spotify launched its operations in India in February. The Swedish company bet high hopes on the increased digitisation in India.

“India has an incredibly rich music culture and to best serve this market, we’re launching a custom-built experience. Not only will Spotify bring Indian artists to the world, we’ll also bring the world’s music to fans across India. Spotify’s music family just got a whole lot bigger,” said Daniel Ek, Spotify founder and CEO.

Within a week of its launch, Spotify saw more than 1 Mn users sign up and growth continued to outpace expectations. The Swedish company now has more than 2 Mn users in India and has been expanding its focus on the Indian market. Along with various offerings including a Lite app, cheaper subscription plans and playlists catering to regional language music and listeners, the music streaming giant also launched its original audio-based content for the Indian market called Spotify Podcast Originals in November.

YouTube Music: Singing Aloud In Its First Year

YouTube launched its music streaming service in India in March and within a week YouTube Music hit 3 Mn downloads. The Google-owned video sharing platform introduced a free ad-supported version of YouTube Music while the premium paid version for ad-free music was for INR 99 per month.

Later, it also forayed into the original video streaming market in India with YouTube Originals. Both YouTube Premium and YouTube Music Premium also decided to offer prepaid plans for its services in the country.

According to the latest YouGov report, YouTube Music is the most frequently used music app in India. This is despite intense competition in the Indian music streaming space, which is flooded with many active players including Gaana, JioSaavn, Apple Music, Amazon Prime, Google Play.

The report said that 23% of Indians use YouTube Music app most frequently as compared to others. Access to the latest soundtracks and ability to share music are the top reasons for opting the music streaming platform.

Binance: Global Crypto Exchange Acquires Startup WazirX

Binance announced its acquisition of Indian cryptocurrency startup WazirX in November. From November 25, the global cryptocurrency exchange and blockchain ecosystem has allowed the option for users to buy and sell crypto with Indian rupees (INR) on the Binance Fiat Gateway. Interestingly, this comes at a time, the Indian government is thinking of legislation that would ban cryptos in the country.

“It’s a landmark moment in the Indian cryptocurrency industry, as it’s the first time that such a leading global exchange has acquired Indian cryptocurrency startup. This will fuel more resources to the Indian cryptocurrency industry,” Nishchal Shetty, founder and CEO of WazirX, said in an interview with Inc42.

With this the users can directly place orders on the web platform or the Binance apps to purchase Tether (USDT) against INR. This partnership allows users to trade any digital asset available on Binance with the purchase of USDT from the WazirX digital asset marketplace.

“The young demographic in India give an edge to adopt and build new financial technologies, and I believe this will play a vital role in making India a global blockchain innovation centre to also spur cryptocurrency adoption throughout the larger public in the country,” CZ (Changpeng Zhao), Binance CEO said.

Qoo10: Rides Into India With ShopClues Acquisition

Singapore-based Qoo10 acquired ecommerce company ShopClues in a stock deal in October. According to media reports, the transaction has valued ShopClues at $70-100 Mn and was reportedly the largest valuation meltdown for an Indian startup. ShopClues was valued at $1.1 Bn in late 2015.

Qoo10 caters to small and medium enterprises (SMEs) in Southeast Asia via a localised online marketplaces in Singapore, Indonesia, Malaysia, China, Hong Kong and other regions. ShopClues said that the Singapore-based company would be expanding into other Asian countries as well.

The acquisition was looked at as an opportunity to increase cross-border commerce opportunities for consumers and sellers in India as well as the regions where Qoo10 operates.

ShopClues claimed during the acquisition that it has more than 700K small and micro-merchants who will be able to reach customers in Qoo10’s Southeast Asian markets. The company’s statement added that Qoo10’s merchants and cross border logistics business will get access to the Indian market.

Qoo10 was founded in June 2010 and is the 10th most visited site in Singapore, with more than 3 Mn registered users. The ecommerce platform lets sellers and businesses of all sizes list their goods and customers from any country can purchase them.

Alibaba: The Tech Giant Sharpens India Focus

Alibaba Group announced its entry into the Indian ecommerce market in September this year, but through the popular UCWeb browser app.

The China-based company had announced to start fully-owned ecommerce business in India through UCWeb. Alibaba said that it would also include online movie ticket bookings, which would put it in competition with BookMyShow and Paytm. Alibaba owns 30.15% stake in Paytm, which runs ecommerce marketplace Paytm Mall.

UCWeb global business VP Huaiyuan Yang said, “Alibaba’s entry would not have an adverse effect on Paytm’s ecommerce business. We are going to launch a new e-commerce product in India this year.”

Alibaba has been a keen investor in the Indian startup ecosystem. It owns stakes in Snapdeal, Zomato, Xpressbees and BigBasket. In May, the company reportedly invested $100 Mn in VMate, a short video sharing app launched by UCWeb. The investment was seen as an attempt to enter the Indian social video app space.

Education Index: Edtech Startup Launches Blockchain Platform

London-based edtech startup Education Index launched a blockchain-enabled peer-to-peer international student recruitment platform called Libereka in October this year.

Students can receive a blockchain education account where they store their academic credentials, transcripts, letters of recommendation and English proficiency test scores. Libereka also gives students preparatory materials including a personalised dashboard to recommend degrees and programs based on their profile and goals. They can also access free online courses to prepare for university.

This will help students chuck the old practice of getting multiple transcripts and other documents and then sending each set separately to Universities. With this the students can keep adding verified or validated certificates for a long term. This will help them during the process of job application. as they go through life, allowing them to use the account to apply for Jobs showcasing everything that they have learnt at a single place

Soumik Ganguly, CEO of Education Index said earlier that this will make recruiting students simpler, cheaper and more efficient, freeing up time for universities to focus on what matters: securing the best and brightest students.

Ping An Global Voyager: Makes India Entry With CarDekho Investment

Marking its first venture in India, Ping An Global Voyager Fund led a Series D funding round of $70 Mn in Indian automobile classifieds platform CarDekho.

Ping An Global Voyager Fund is a Hong Kong-based investor, which invests between $15 million and $50 million in its portfolio companies. Founded in 2017, the fund has so far invested approximately $250 Mn across Europe, Asia and North America. By leading the funding round in CarDekho, the fund shifted its focus to Indian startups this year.

CarDekho has huge market in India with more than 4K new auto dealerships and 3K used car dealers across India. The company also works with more than 10 financial institutions and 18 insurance companies across the country.

“Auto services are a core component of Ping An’s ‘finance + ecosystem’ strategy, reflected in our majority shareholding in Autohome in China. We have been extremely impressed with the business CarDekho has built in India, particularly its success in developing different types of financial services offerings to address car buyers’ needs,” said Donald Lacey, MD and COO of the Ping An Global Voyager Fund.

Meanwhile, CarDekho had said the funds would be used to further strengthen its transaction businesses and expand its international footprint. The company entered the Philippines market this year with the acquisition of Carmudi.

According to the Ministry of Corporate Affairs filings accessed by Inc42, after a shareholder resolution passed on November 25, the company on November 26 and 27 raised funds from Ping An Global Voyager Fund and Lenarco Limited.

Hatcher+: Global VC Lands In India

Hatcher+ is a data-driven venture capital firm that uses AI and machine learning-based technologies to identify early-stage opportunities in partnership with leading accelerators and investors, worldwide. Headquartered in Singapore, the Hatcher+ H2 Fund is one of the most active early-stage investors in the world.

The firm invested an undisclosed amount of funding in Thane-based portable vibrating mat for kids company NapNap, making its foray into Indian market in January this year.

The startup announced that it would be using the funds for research and development of new product concepts in the babycare and mothercare space and geographic expansion into Southeast Asia and MEA markets.

“Three years ago, upon finishing our first fund, we embarked on a journey to create a new kind of venture fund, based on our research into 20 years of venture investing, technologies that we could adapt to modernize and scale the investment process, and structures that might enable a new, more democratized approach to sourcing investment.”

With the Hatcher+ H2 Fund receiving around 11,710 requests for funding from 161 countries in just the first 12 months of operations, its entry into India displays the potential for growth in this market.

Apis Partners LLP: Betting On Indian Infrastructure

Private equity firm Apis Partners LLP second fund entered the Indian market by committing to invest in India’s non-banking financial company (NBFC) L&T Infra Debt Fund Ltd.

The firm has raised $550 Mn for its second fund in limited partner commitments. The global investment manager supports growth-stage financial services and financial infrastructure businesses by providing them with catalytic growth equity capital.

The second fund will make equity investments of between $30Mn and $50 Mn into financial services with a focus on capital-light financial services and financial technology companies across the growth markets of Africa, South Asia and Southeast Asia.

“The fund closed at its increased hard-cap of $550 Mn with total commitments of $563 Mn, including the GP commitment, exceeding the initial target fund size of $400 Mn,” the company said in a statement.

Danone Manifesto Ventures: Tapping India’s Health Food Wave

Danone Manifesto Ventures is a corporate venture group located in New York City and Paris, and it made its first investment in the Indian market this year.

Mumbai-based fresh FMCG products company Drums Food International, the parent company of Epigamia, raised $25.58 Mn (INR 182 Cr) in a Series C round of funding led by Belgium-based consumer-focused investment firm Verlinvest and New York City-based investor Danone Manifesto Ventures, the venture investment arm of Danone Manifesto.

Laurent Marcel, managing director of Danone Manifesto Ventures, said: “We are convinced of Epigamia’s great growth potential thanks to its unique positioning on the Indian dairy market. As a modern and innovative brand, it appeals to the ever-growing number of Indian consumers looking for healthier options.”

“This investment, our first with Danone Manifesto Ventures in Asia, is a perfect fit, as Epigamia places taste, quality and health at the centre of its model,” he added.

Danone Manifesto Ventures offers mentorship and support to help companies grow and scale, with the support of subject matter specialists, financial experts, and expertise and resources. Since its inception mid-2016, Danone Manifesto Ventures has made several investments including Michel et Augustin in France, as well as Farmer’s Fridge and Harmless Harvest in the United States, among others.

TravellerPass: UAE Giant Cashes In On India’s Digitisation

App-based lifestyle platform TravellerPass has been around for more than five years in UAE with over 1 Mn customers, and launched in India this year.

In India, TravellerPass aims to be the one-stop app for dining, entertainment, wellness and shopping with discounts. The platform will also offer packages which are available on the global platform.

TravellerPass is present in UAE, Oman, Qatar, Bahrain, Saudi Arabia, and now India. The company had said that entering India is an important part of their global expansion plan. “Our entry in India represents a significant step in our company’s aggressive global expansion strategy and we are excited to be part of India’s growing segment of the deals market,” said Matt Philips, Founder and CEO TravellerPass.

The company believes that India will be its next big market with its focus on the technological advancement and growing segment of mobile users and apps. The company plans to enter 20 cities in India by 2021 after Bengaluru, followed by Mumbai and Delhi. TravellerPass works on a subscription model and Indian customers can have access to all their offers for a promotional pricing of INR 999 for a period of one year.

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