TECH START-UPS IN INDIA

A BRIGHT FUTURE
Supported by Google For Entrepreneurs
 Foreword

The Indian Technology Start-up landscape has evolved to become the

fourth largest base across the world. Since 2010, there has been a
significant rise in the number of technology start-ups and today, our
country hosts more than 3,000 tech/digital start-ups. If the landscape
continues to evolve at this pace, then by the end of 2020 more than
11,500 start-ups are expected to get established in India, generating
employment opportunities for over 250,000 people.

Key indicators such as opportunities existing in the domestic market,

access to capital/mentors, and increased M&A and consolidation
R. Chandrashekhar
activities clearly point towards the new evolution of the ecosystem.
President, NASSCOM
Several founders are leveraging emerging technologies like big data
& analytics, augmented reality, internet of things and cloud computing
to come up with some of the best-in-class technology-based
start-ups.

This report, titled Tech Start-ups in India: A Bright Future is a rst-of-

its-kind report undertaking an in-depth analysis of the various aspects
of the start-up ecosystem. The report clearly identies the current
scale and size of the start-up landscape, factors that are impacting
Pari Natarajan the growth of the overall ecosystem and steps that need to be taken
CEO, Zinnov to make the environment more conducive for start-ups.

We hope this report would be useful to you and we welcome your

feedback and comments at research@nasscom.in

2
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Executive summary
The start-up ecosystem is often described as young, innovative, aspirant
and futuristic. India, home to a new breed of young start-ups, has evolved to Some of the key findings presented in this
become the fourth largest base of technology start-ups in the world. Since report are:
2010, the Indian Technology Start-ups landscape has seen a sharp rise in India currently boasts of over 3,100 start-ups with
the creation of new start-ups and this number is expected to cross 3,100
an addition of 800+ new start-ups in 2014 alone.
by the end of 2014. It is a hyper growth inection point for the Indian start-
If the landscape continues to evolve at this pace
up ecosystem, with growth, capital and acquisitions all coming together to
then by 2020 more than 11,500 start-ups would
create a perfect storm.
get established in India, generating employment
The whole ecosystem is evolving and becoming more and more vibrant and opportunities for over 250,000 people
multiple indicators are pointing towards this direction. The Indian middle
The major growth drivers like large domestic
class is becoming a voracious consumer of digital solutions. eCommerce,
market, access to capital/mentors, whitespace
marketplaces and mobile apps are increasingly driving people online. Many
opportunities and increased M&A activity are
start-ups are incorporating emerging technologies in their solutions and
building global digital solutions from India. accelerating the start-ups growth. Indian start-
ups, with their unique solutions, are witnessing
Start-up funding is maturing signicantly in deal value and in diversity of
increased traction in global whitespace opportunities
focus areas, and start-ups today have access to multiple sources of funding.
such as internet of things, augmented reality,
While start-ups are betting high on the ecosystem, demand for supportive
smart hardware, big data & analytics, cloud
government policies continue to exist.
computing, etc.
NASSCOM and Zinnov are delighted to present the rst-of-its kind report
Domain solutions emerging Ad-Tech, Edu-
titled Tech Start-ups in India: A Bright Future, which examines various
Tech and Health-Tech and other niche solutions
dimensions of the Indian start-ups ecosystem. This report is the result of
emerging for healthcare, agriculture, etc.
a comprehensive three-month study, during which detailed research was
carried out by the team at Zinnov to gather quantitative and qualitative data Bengaluru and NCR are the top 2 start-ups
and insights through primary and secondary sources. The whole process destinations and cumulatively these two geographies
involved personal interviews with various start-ups, VCs, Angel Investor and account for over 50 per cent of the start-up
Incubator/Accelerators, and extensive desk research.

3
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 base. Looking at recent rounds of funding, NCR
tops as the investment destination. Over 59 per
cent of start-ups are focused on B2C categories
which is dominated by eCommerce and online
marketplaces; B2B segments are dominated by
big data & analytics, ERP & marketing solutions
Young entrepreneurs dominate the start-up
landscape with over 73 per cent of founders in
the age bracket of less than 36 years. Most of
these founders with a strong consumer-centric
approach, have come up with some of the best-in-
class B2C start-ups. Women entrepreneurs have
also started to leverage the innovation economy
Scaling up and growth hacking-are key priorities for
start-ups. Start-ups are able to hire best-in-class
talent from the industry by offering above average
compensation, stock options, enhanced growth
opportunities and exible work culture
Start-ups today have access to multiple sources
of funding from VC/PE, angel investors,
banks and financial institutions as well as
incubators. Funding is maturing signicantly in
deal value and in diversity of focus areas. During
4
TECH START-UPS IN INDIA
A BRIGHT FUTURE
2010-14 timeframe close to USD 3 billion is
expected to be invested in Indian start-ups
The innovation imperative leading to a rise in
collaboration and partnerships product rms with
platform players, IT services, global MNCs, CIOs
Given the vibrancy in the ecosystem, the M&A
activity is on the rise in India. Acqui-hiring,
technology acquisition, market consolidation and
customer acquisitions are the primary drivers for
increase in M&A of Indian start-ups
While start-ups are betting high on the ecosystem,
there is constant need to nurture this ecosystem.
Demand for supportive government policies
(ease of doing business, tax incentives, participation
in government contracts, availability of risk capital,
etc.) continue to exist. While the new government
has made the right announcements, there is a need
for directional efforts to see them implemented
Future of products devices at the edge, logic at
the core, fusion of IOT, SaaS, mobile solutions, data
analytics are leapfrog opportunities for India
 Scope of the report
To understand the evolution of the technology product and digital
start-up landscape in India

Key unmet needs &

expectations of start-ups

Start-up support
ecosystem in India

Angel investor
ecosystem in India
`
VC/PE
investment trends

Technology focus
areas and whitespaces

Technology product/digital
start-up landscape in India

5
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Technology product/digital start-up
Denition considered for the report

Inception year
Organisation with
inception year of 2010
or later
Intellectual property
That has developed and/or owns
the technology IP (includes IP-owned
through acquisitions) and/or
That provides digital/technology
platform for transactions and/or
customer engagements
Headquartered
An organisation that is
headquartered in India
Has founding team
with Indian origin AND
product development
largely in India
Distribution
Undertakes the packaging,
selling and marketing of the
product/platform itself or
through channel partners

6
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Acknowledgement

This report has been co-developed by NASSCOM and Zinnov through a

comprehensive three-month study to understand the technology product
& digital start-ups landscape in India.

The preparation of this report has been facilitated by a number of

organisations and people who have extended great help to the NASSCOM
and Zinnov teams. We wish to sincerely thank all of them for their valuable
contributions without which this report would not have been possible.

First, we would like to thank all the industry members and other
colleagues, who went out of their way to provide detailed inputs and
perspective of their services/clients/markets, etc. They offered great
support to this project by providing the requisite data and insights as
required by the team. This study has been greatly enriched by the valuable
insights and detailed inputs provided by various investors, angels as well
as other key stakeholders in the ecosystem.

We would also like to acknowledge the special contribution made by

Google for supporting us on various policy-related aspects as well as
formulating and nalising the numbers.

Finally, we would like to specially acknowledge the support offered by

NASSCOM research team for their efforts and contribution towards the
execution and completion of this report.

7
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 SECTION I LANDSCAPE/SCORECARD

Start-up Landscape Founders Profile

India emerges as the Catching up
th
4 Largest Fast 73% 48%
start-up location globally Delhi-NCR have
Founders
less than MNC
work
28% 36 experience
years of age
of start-ups continue to
be the technology hotspots Bengaluru
Focus Areas
B2C/B2B:
4%
B2B:
36%
37% Founders 6%
solely Women
2014 3,100+ 65,000+ engineers founders
B2C:
By 2020 11,500+ 250,000+ 59%

Growth Drivers Global Reach of Organisations

43%
product/digital
Increased
Large
Evolving Whitespaces organisations
Domestic ecosystem of M&A have focus on
market investors and mentors resulting in more global market
exits for investors

8
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 3,100+ start-ups in India; fastest growing
community; 4th largest in the world
US UK Israel India Canada
Tech.
Product/Digital
Start-ups by 1 2 3 4 5
Key Countries*
41,500+ 3,500+ 3,300+ 3,100+ 2,700+

Strong Growth Indicators - India Still a Lot of Ground to Cover***

> 800 Start-ups created every year

1 4
USD
2.9+ Funding** since 2010
billion
US India
70+ Active VCs/PEs in 2014 Avg. valuation
of start-ups USD 4.2 USD 2.3
million million
550+ Angels in India Ease of doing
business ranking 7th 142nd
80+ Incubators/Accelerators No. of investors
residing in the country 25,000 770

*in India ~68 per cent of total start-ups listed on Angel List are tech. product/digital start-ups, same ratio has been applied to the total number of start-ups listed on Angel List for a
country to arrive at the No. Tech. Product/Digital Start-ups
**Includes projected investments by VCs, PEs, angels, incubators/accelerators during 2010-14 in start-ups incepted during 2010-14
***Data from Angel List and World Bank Group (Ease of Doing Business rankings are benchmarked to June 2014)
Source: Microsoft Ventures, Zinnov Product/Digital Start-up Database, Angle List

9
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Multiple drivers supporting the Indian start-up
ecosystem to reach its hyper-growth inection point
Growth Drivers

Evolving ecosystem of inves-

tors and mentors
Large domestic market Entrepreneur peer group is
for tech and proximity of supporting the development
start-ups of other start-ups
Leverage India as test
bed before going global

As M&A is witnessing
increased momentum
in India, investors are
getting more exit
A number of opportunities
whitespaces within
consumer internet,
big data, cloud and
IOT, etc.

10
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Further acceleration expected base is likely to
expand four-folds by 2020
Technology Start-ups by Inception Year

2014E
3,100+
2010
480+ Total number
of start-ups 2020P 11,500+
2011
525+
2012
590+
2013E 65,000-
680+ 2014E 75,000
2014E
805+ Total number
2020P
of jobs created
2020P
250,000-
2,000+ 300,000

Year 2020 is expected to see a remarkable rise in the base of start-ups, and the total number of start-ups are projected to grow at a CAGR of ~24% between 2014 and 2020
This will equally impact the growth of Indian start-ups jobs, which is expected to grow at a CAGR of ~25%
Note : P = Projected; E = Estimated
Source : Angel List, Zinnov Product/Digital Start-up Database; Venture Intelligence, YourStory.in

11
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Bengaluru and Delhi-NCR emerging as start-up
hotspots; reasonable traction in other locations
Start-ups by Location
(Total = 3,100+)

Delhi-NCR
24%

Kolkata, Ahmedabad,
Top 6 locations
Cochin, Jaipur and
account for 90% of the
Thiruvananthapuram
start-up activity in India Hyderabad
Mumbai are the next
15% Pune 8% emerging locations
6%
Bengaluru
Chennai
28% 6%

Bengaluru Delhi-NCR Mumbai Hyderabad Pune Chennai

Top focus
areas of eCommerce/Aggregators
start-ups Big data & analytics
by location*
ERP
Productivity & collaboration
Education
*For Directional purpose only Marketing & advertising
Source: Zinnov Product/Digital
Start-up Database

12
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Discernable shift observed towards the B2C
segment, dominated by eCommerce and online
marketplaces; B2B dominated by big data &
analytics, ERP and marketing
Focus Areas of Start-ups Others*
Cumulative 15% 19% 19% 16%
Social media
5% 4% 6% 7%
B2C
13% 7% 10% 7% Travel
B2B B2C focus of
6% 11%
37% 59% start-ups 18% 16% Education
5% 21% 21% Aggregator &
26% online marketplace
B2C/B2B: 4%
45% 42% 39% eCommerce
22%
Across years

5% 2010 2012 2014 Overall

8%
26%
40% 52%
69%
14% Others**
24% 17% 19%
5% 7% Productivity
8% 9% 8%
2014 2010 B2B
6% 13% 9% Communication
focus of 16%
6% 13% 10% /Collaboration
B2B B2C B2C/B2B start-ups
33% 26% 26% Marketing
23%
& advertising
Note: Analysis based on a sample of 521 start-ups across years
*Others include Communication/Collaboration, productivity, gaming.
30% 28% ERP
HW and other consumer internet 23% 27%
**Others include apps/web dev, infra mgmt solutions, content mgmt, Big data
data recovery, gaming, HW, mobility solutions, security and others
Source: Zinnov Product/Digital Start-up Database 2010 2012 2014 Overall & Analytics

13
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Start-up landscape in India Young, diverse and
inclusive
Age Wise Break-Up of Start-up Founders Start-ups: Diverse & Inclusive
26-35 36-45 5% 4%
years 15% Building on experience: Fresh innovation:
years 34%
22% 62% start-ups have a 13% start-ups have no
45+ 32%
53% 5% tech background previous work experience
years
20% 51%
49%
Up to Quick
10% Facts
25 years
2010 2014 ~73% Young founders (age <36 years)

Up to 25 years 26-35 years ~52% Postgraduate founders**

Cumulative 36-45 years 45+ years ~58% Young founders focused on B2C
~6% Women founders
Education Break-Up of Start-up Founders
16%
Founders Experience Profile#
MBA Others* 25%
16% 16%
33% 49%
36% 16%
14%

35%
14%
43%
20%

27%
BE/B. Tech
ME/M. Tech 2010 2014

13%

13%
12%
/MS/MCA
B.E./B.Tech M.E./MS/
MBA M.Tech/MCA

MNC Tech

MNC
Non-Tech

Indian
Tech

Indian
Non-Tech

No Previous
Experience
Cumulative
Others*
Note: Analysis based on a sample size of 430 start-ups for Age Wise Break-up and 458 start-ups for Education Break-Up;
#Analysis based on a sample of 100 start-ups across years
*Others includes Other Undergraduates, Others Masters and Doctoral degree
**Postgraduate Founders includes founders with ME/M.Tech/MS/MS/MCA, MBA, Other Masters and Doctoral degrees
Source: Zinnov Product/Digital Start-up Database

14
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 With a major focus on emerging opportunities
around B2C segment
Gaurav Munjal
Founder & CEO
B.Tech from NMIMS
Aggregator Single round of funding

eCommerce 58% 36%

founders focus founders focus ERP
Gaurav Kushwaha on B2C segment on B2B segment
CEO & Founder Manasij Ganguli
B.Tech from IIT Delhi Major Co-Founder & CEO
Multiple rounds
Major B.E. from BIT, Mesra
of funding Focus Areas Focus Areas Single round of funding

6%
founders focus on
B2B/B2C segment
Recruitment Portal Business Analytics
Major Arjun Pillai
Santosh Yellajosula
Co-Founder & VP Focus Areas Co-Founder & CEO
B.Tech from Cochin University
M.Sc from BITS
Single round of funding
Single round of
funding

Rahul Yadav
Co-Founder & CEO
B.Tech from IIT Bombay
Note: Analysis based on a sample size
of 613 start-ups across years
Aggregator Multiple rounds of funding
Source: Zinnov Product/Digital Start-up Database

15
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Women entrepreneurs are starting to leverage the
innovation economy
Top Focus Areas of Successful Women
Start-ups Entrepreneurs
Women entrepreneurs
in start-up landscape ~6%
Richa Kar
84% eCommerce
Age Wise Break-Up of Co-Founder & CEO
B2C
Start-up Founders Masters from
NMIMS
45+ Years USD 9 million in
Aggregator
36-45 Years 0% Up to 25 funding
16% 16% Years

68%
Sreepriya Koppula
Marketing
26-35 Years 13% platform Founder
B2B Certificate
Programme from
Education Break-Up of Stanford University
Education Single round of
Start-up Founders
funding
Others* BE/B. Tech
30% 26%
7% 3%
37% ME/M.Tech/ B2B/ Ruchi Garg
Aggregator
MS/MCA B2C Founder & CEO
MBA BE from CRSCE
Single round of
Note: Analysis based on a sample size of 31 start-ups
*Others include: Other Undergraduates, Others Masters and Doctoral degree
funding
Source: Zinnov Product/Digital Start-up Database

16
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Large enterprises are collaborating with start-ups
to enhance future growth

Enterprise Start-ups

Benefits achieved
Goodwill New business
Collaboration drivers enhancement opportunity Collaboration models
Serving unmet Deeper client Client connects Corporate accelerator
needs of clients engagement Programme
Product credibility
Thrive for innovation Transition to Support in solution Intrapreneurship
a solution provider
Business transformation integration programme
Bundle services Supporting Enterprise partnership
Global market access around an infrastructure
innovative product Corporate funds
High business value
to clients programme

Competencies offered Competencies offered

Extended support Innovation

Branding/sales & marketing Harvest new ideas

Access to lients Compact product

development cycle

17
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 The global competitiveness of Indian technology
start-ups is accelerating
Global Success Stories from India

Set Up 2010 Onwards

Young start-Ups
Big data & analytics
Marketing &
advertisement
Mobility
ERP
Set Up Pre 2010
Comm/Collaboration
Growth firms Cloud computing
Enterprise security Niche use cases
Set Up Pre 2000 Application software
Analytics
Early movers
Productivity
B2B enterprise products 43% product/
Emergence of B2C digital firms
BFSI vertical focus
have focus on
global markets

More and more start-ups are exploring global markets

Since 2010 there has been a significant growth in the spectrum of firms that have focus and presence at a global level
Source: Desi Products Videshi Markets: Indian Software Products Building Global Business NASSCOM & Zinnov

18
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 with the huge domestic market driving demand
Tech-ready SMBs
10+
million
Large Public listed
enterprises SMBs with PCs
organisations
2 5+
5,000+ 3,500+ million
Organisations in Small
Forbes 2000 & medium SMBs with
businesses mobile phones
65+
1
100%
Large
enterprises

Internet users

250+
million
3
Mobile phone
Customers connections
900+
million

Smartphone users

115+
India domestic millionn
market

19
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Key factors for Indian start-ups to focus on
global markets

Global Market (USD) Opportunity Global Whitespace

US & EU represent over two-third of Opportunities
the global technology market
Over USD 100 billion+ of SMAC*
led level playing opportunities** in
global markets for Indian firms

Easy Access to Capital

US domicile opens more doors for
VC & M&A activity
(50-100 times bigger early stage Business Environment
funding ecosystem than India) /Laws in India
Many start-ups leverage India as the test market and then start focusing at the global market
Anecdotal evidence of low adoption
Start-ups with a global focus are setting their units outside India as well, as they want to be close to their customers
*Social, Mobile, Analytics & Cloud;**by 2015
of products by Indian firms
Source: Desi Products Videshi Markets: Indian Software Products Building Global Business NASSCOM & Zinnov; & long sales cycles

20
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Start-ups adopting innovative approaches to
attract and retain best-in-class talent

A Hiring Channels Talent C Value Propositions

used by Start-ups* by Functions to
Attract Top Talent**

Technology function
57% interesting work

7% Sales function
25% 20% 16% 9% 7%
Internships opportunity to grow
College
HR
Hackathons agencies recruitment
Referrals
Social & meetups
Job network Operations
portals
open culture

B Monetary Benefits are Getting Competitive

82% 83% 63%

start-ups pay start-ups use stock start-ups have definitive
more than the options for long- link between performance
market median** term incentives** and compensation**

*Based on NASSCOMs analysis of 529 start-ups (http://10000startups.com/skills-infographic/)

**Based on analysis of 40 start-ups across four business sectors, by Hay Group in partnership with Canaan Partners from the report titled How Indian start-ups are building to last

21
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Hiring technology professionals is a top priority for
start-ups
Top Skills Start-Ups are Looking For Java 61%

HTML5 57%
Technology 80%
CSS3 41%
Product 66% AJAX 25%
management
Top PHP 22%
programming
Sales 66% skills Python 22%
business
Ruby on rails 14%
Marketing 20% C/C++ 14%

Others 20%
Operations 30%
Inbound
marketing 70%

Finance 14% Top Growth

38%
marketing hacking
skills
SEO/SEM 38%
HR 7%
Online advertisement
/PPC/PPM 35%

Others 14% Community

management 25%

Source: http://10000startups.com/skills-infographic/
Others 9%

22
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 SECTION II EMERGING TECHNOLOGY TRENDS

Start-Up Landscape Delivery Platforms

Big Data & Analytics

Cloud
800+ 350+ Start-ups
Start-ups Security
Cloud
35+
Augmented Start-ups
Reality
30+ >25% Analytics
start-ups
Start-ups
leverage & ERP
AdTech emerge as key
cloud as
100+ the delivery cloud workloads
Start-ups platform
Start-ups
Addressing
Whitespaces HealthTech
/Emerging 30+
IoT Technologies Start-ups
35+ Mobility
Start-ups

Hardware EduTech
190+ >7% >26%
30+ Start-ups
start-ups start-ups
Start-ups provide use mobile
Payment Solutions Gaming enterprise app as a
mobility primary
50+ 100+ platforms delivery mode
Start-ups Start-ups

23
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Ingenious start-ups are emerging in
futuristic technology areas and delivering
domain-specic solutions
Internet Big Data & Augmented Cloud Security
of Things Analytics Reality Computing

Founder worked with Co-founders worked Founder worked with Founder worked with Co-Founder worked
Veritas with MindTree for Intel & AMD Realcom Inc. with Philips
(part of Symantec) 10+ years Electronics India Ltd.

Payments Hardware AdTech HealthTech EduTech Gaming

Founder worked Founder worked Co-founders worked Co-founders Founder worked Founder worked
with with Intel with Bain & worked with with with DreamWorks
PayPal Company Sun Microsystems Cisco Systems Animation

>25% start-ups leverage cloud as >7% start-ups provide enterprise

the delivery platform mobility platforms

Analytics & ERP emerge as key >26% start-ups use mobile app
cloud workloads as a primary delivery mode

Cloud* Many start-ups indifferent to location of cloud datacentre Mobility*

*Analysis based on a sample of 521 start-ups across years

Source: Zinnov Product/Digital Start-up Database

24
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Augmented/Virtual reality is already being touted as
one of the most signicant marketing transformations
Major Use Cases: Marketing & Advertising,
Quick Facts
Healthcare and Visualisation Solutions

30+
Augmented reality start-ups in India

Globally, the market size of Healthcare

augmented reality based Virtual Jewellery Communication
solutions is expected to grow to Trial Solution Virtual Trial Room
USD 2 billion by 2015* Marketing &
Advertising

Mumbai Hyderabad
Growth in AR is largely driven by
improvements in computing 2011 2011
hardware and internet connectivity
Bengaluru Chennai
2012 2012
Consumer mCommerce
is emerging as one of the top growth
areas for augmented reality

Virtual Home Design Customer Engagement

Platform
Marketing & Advertising
Source: *Juniper Research, Zinnov Product/Digital Start-up Database

25
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Internet of Things is opening up signicant
whitespace opportunities for start-ups

Quick Facts Major Use Cases: Wearable Tech, Home

Automation and Fleet Management

35+
IoT start-ups in India
GPS vehicle tracking
& fleet management
solutions
India market GOQii
opportunity of
Wearable
USD 10-12 billion technology for a
Ahmedabad
by 2020 healthier lifestyle
2012
Mumbai
USD 1 billion+ 2014
investment committment by Pune A wearable device
Indian Government on building 2013 to control any
smart device
100 smart cities
Kochi
2012
IESA (India Electronics & A connected ccar
Semiconductor Association) and platform for
remote monitoring
TiE Bengaluru have signed a
MoU to promote IoT start-ups

Source: *Machina Research; Zinnov analysis, Cisco, Zinnov Product/Digital Start-up Database

26
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Hardware is the new software and start-ups
are targeting niche areas with HW offerings
Major Use Cases: 3D Printing, Payment
Quick Facts
Solutions and Automation

30+
HW start-ups
in India
2013
NCR
Hardware
firms such as Nest,
GoPro, Beats,
Jawbone, Oculus have
recently accorded a
multi-billion dollar Warehousing and
valuation 3D printer distribution automation
products, fleet of
Low-cost (<USD 200) 2013 mobile robots
and efficient hardware is Bengaluru
becoming a great medium
for selling software and is
hence, attracting lot of 2011 2013
VC investments

3D printing market is
expected to grow at a CAGR Mobile payment An HDMI dongle that
solutions connects all the media to
of 23% from 2013-20,
the TV wirelessly
and reach USD 8.41 billion in 2020

Source: Huffington Post, Tech Crunch, Zinnov Analysis, Zinnov Product/Digital Start-up Database

27
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Over 300 BD&A start-ups offering huge
opportunities in both global and Indian market
Major Use Cases: Big Data and
Quick Facts
Social Media Analytics

350+
BD&A* start-ups in India

Big data & analytics

market in India to reach
~USD 1 billion in 2015,
growing 83% annually**
Machine-to-machine
big data analytics
platform
four-fold growth in Social media
analytics start-ups in India analytics platform
in the last four years 2012
Chennai
2010 Bengalure
2011
IBM innovation centre in
Bengalore to partner with 2011
Real-time predictive
100 big data and Internet of analytics based on
Kochi
Things start-ups in India machine data
Data visualisation
and analytics tool
*Big data and analytics
**Source: NASSCOM and Crisil, Zinnov Product/Digital Start-up Database

28
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 With over 800 start-ups, cloud computing is
emerging as the fastest growing technology
Major Use Cases: BD&A, ERP, Comm./Collaboration
Quick Facts
and Productivity Solutions

800+
cloud computing
start-ups in India

2020,at least
By
80% of IT industry Self-service
growth would be platform for big
driven by cloud and data analytics
modern IT solutions
Cloud-based billing
platform for subscription
2011 business
In India, the cloud market is
estimated to grow to Bengaluru Chennai
USD 4.5 billion by 2015*
2012 2011

>25% of start-ups in Cloud-based 2012

India are already using
healthcare Cloud-based video
cloud as the primary
CRM solution conferencing software
delivery medium

Source: *EMC and Zinnov; NASSCOM, Zinnov Product/Digital Start-up Database

29
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 35+ start-ups in security domain; new delivery
models are emerging
Major Use Cases: Cloud-based Security and Mobile
Quick Facts
Security

35+
security firms in India

Enterprise security market in

India is expected to reach Enterprise mobile
USD 234 million by the end of security firm
2014, growing at about 16% working in the
compared to 2013 space of "Bring
Your Own Device"
Provider of innovative
pattern-based two
factor Authentication
India IT security 2012 Solution
market is expected to Chennai
double by 2016 2013 Bangalore
2010
Cloud-based mobile 2011
BYOD trend is fuelling security to secure
growth of solutions in mobile applications
the areas of data from getting hacked Enterprise cloud security
security and solutions, focusing on
authentication cloud security and
accessibility

Source: CRN, Economic Times , Zinnov Analysis, Zinnov Product/Digital Start-up Database

30
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Advances in technology and increased penetrations
of smartphones and internet are driving the
payments market growth trajectory upwards

Quick Facts Major Use Cases: Online Payment Solutions

50+
payment solutions
firms in India
Payments platform
to solve payment 2010 2011
Digital payments in India issues faced by
NCR
is expected to touch eCom. firms
USD 19.8 billion by
December 2014, a
40% increase Online payment
from previous year solutions firm
Mumbai

800 2011
million online transactions
Bengaluru
made in India in 2013 Comprehensive web
and mobile payment 2011
solutions for merchants
Delhi, Mumbai, Kolkata and as well as consumers
Chennai contributed about Paymentt d
device
i with a
60% of the total card reader which can
digital payment gateway be plugged into any
market size in 2013 smart device or phone

Source: IAMAI, Zinnov Analysis, Zinnov Product/Digital Start-up Database

31
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 With ~200 innovative start-ups, opportunities
under Edu-Tech are booming
Major Use Cases: Technology Platform,
Quick Facts
Educational Content and Skills Development

190+
Edu-Tech start-ups in India All-in-one software for
managing schools

Indiasonline education 2013

Haryana
market size is predicted to
grow to USD 40 billionby 2017 2013

Social learning network

K-12 sector is expected to 2013 for science for partici-
reach USD 50 billion in 2015 Mumbai
pants from academia to
growing at an estimated corporate research
Compound Annual Growth
Rate (CAGR) of 14 % 2012
Bengaluru
Cloud based
knowledge
Over 150 million management
students in India have platform Tablets for
access to internet via education
their mobile phones

Source: Yourstory.in, Zinnov Analysis, Zinnov Product/Digital Start-up Database

32
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Ad-Tech is disrupting the niche analytics market

Quick Facts Major Use Cases: Mobile Advertising, Marketing

Analytics and Ad Campaign Management

100+
Ad-Tech start-ups
in India

Digital advertising Ad platform for

retargeting users 2012 2014
market in India which
over mobile and NCR
was USD 503.56 million social ad ecosystem
in 2013, will witness
35% growth by
the end of 2014
social
i l referral
f l
Ad spending on mobile ad campaigns
devices growing at an 2013 Pune
annual average rate
of 46% while that on
social media growing Bengaluru
at an annual rate of AdTech product for 2012
of 41% advertising &
marketing analytics
eCommerce, telecom and
FMCG and consumer durables
are the top three verticals Software ad campaigns
& marketing analytics

Source: IBEF, Livemint, Zinnov Analysis, Zinnov Product/Digital Start-up Database

33
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Tremendous opportunities exist in the Health-Tech
domain for start-ups

Quick Facts Major Use Cases: Search, ERP and

Records Management

30+
Health-Tech start-ups in India
Doctor and hospital
search and
information portal
India'shealthcare ITmarket
is expected to grow to Cloud-based
USD 1.45 in 2018, more than management
software for doctors
three times the USD 381.3
and patients
million reached in 2012 Durgapur
2012
Pune
Accelerators dedicated solely to 2012
healthcare start-ups
are getting incepted in India 2013
2012 Bengaluru

Patient records
Indian health-tech Online healthcare management
start-ups are proving search
their capabilities in the software
global market as well

Source: Economic Times, Zinnov Analysis, Zinnov Product/Digital Start-up Database

34
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Gaming market in India provides huge opportunity
for digital gaming start-ups

Quick Facts Major Use Cases: Casual and Mobile Games

100+
Gaming start-ups
in India

Online and mobile

games for various
Casual gaming in India platforms 2011
iOS and Android game
developer/publisher
is expected to grow at a
CAGR of 32% over
2010-15 period
2011
Mumbai
2011
Pune
Mobile casual gaming 2010
revenue expected to
grow at a
CAGR of 27.5% over A game d l
development Bengaluru
2010-15 period studio creating realistic, 2012
casual and social video
games for tablets and
smartphones
7 to 8 million people in
India claim to play on a
console regularly Develop casual and
mobile games

Source: IBN Live; Zinnov analysis, Zinnov Product/Digital Start-up Database, FICCI-KPMG report

35
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 SECTION III FUNDING LANDSCAPE

VCs/PEs Incubators/Accelerators
2010 2014

80+
3 100+

USD USD
13 million 1,818 million

5 70+ 5+ 25+ 50+

Investmentson 3/4 of Total

the Rise VC/PE Funding

Angel Investors Delhi-NCR

2010 2014
USD
1,574 million
3 73+

USD USD
4.2 million 32.2 million
Bengaluru

8+ 90+
USD
524 million

36
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 An evolving ecosystem of VCs/PEs/angels/
incubators/support networks is accelerating the
growth of Indian start-ups
VC/PE funds Event Platforms/
A Incubators/Accelerators B
Support Networks

C Academic/Training Programmes Banks/Financial Institutions D

Angel Investors/Networks
Management 133 Member
Programme for Lending Institutions
Women Entrepreneurs

Wadhwani Centre
for Entrepreneurship
Development

Indian Institute of
Entrepreneurship

Support Ecosystem

37
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 70+ VCs/PEs have invested over USD 2 billion in
Indian start-ups in the past ve years
Year-on-Year Investment Commitment in Start-Ups** Quick Facts*
(in USD millions)
No. of Active Investors
1,818

5 28 41 83 70+

549 Total No. of Deals

265 217 3 37 55 101 100+

13
Average Deal Size (Overall)

USD 4.2 USD 7.2 USD 3.9 USD 5.4 USD 7.7
2010 2011E 2012E 2013E 2014P million million million million million

Average Deal Size (B2B)

9
101 - USD 8.9 USD 2.5 USD 3.3 USD 5.7
138 207 million million million million

743 Average Deal Size (B2C)

USD 4.2 USD 6.9 USD 4.9 USD 7.8 USD 9.4
million million million million million
Investment Commitment in
Start-ups Excluding eCommerce** 2010 2011E 2012E 2013E 2014P

*Average Deal Size (Overall)/(B2B)/(B2C) is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals >= USD 100 million; (E):
Estimated, (P): Projected
**Total Investment Commitment is estimated based on Avg Deal Size (excluding deals >= USD 100 million) and Total No. of Deals; For the year 2014, Investment Commitment is
projected for the whole year based on the run rate so far
Source: Zinnov Product/Digital Start-up Database

38
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 VCs/PEs are making heavy investments in the
expansion stage
Year-on-Year VC/PE Investments by Illustrations of Start-up by Stage of Funding
Stage of Funding* Received Across Years
(in USD million)
Seed Stage Early Stage

1,818 (P) USD 0.5 USD 0.8 USD 4 USD 4

million million million million

1,470

USD 0.5 USD 0.8 USD 3.5 USD 5

million million million million
259
13
USD 15 USD 19 USD 210 USD 45
9 77 million million million million
4 13

2010 2014
Start-up Inception Time

Seed Stage Early Stage USD 17 USD 17 USD 65 USD 627

(<=USD 1 million) (>USD 1-5 million) million million million million
Growth Stage Expansion Stage Growth Stage Expansion Stage
(>USD 5-20 million) (>USD 20 million)
*Investment by stage of Funding is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment
projected in the previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

39
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Average VC/PE investment sizes have more than
doubled for younger start-ups
VC/PE Investments (USD million) Average Deal Size by Start-up Inception Time*
by Start-up Inception Time** (in USD million)
(in USD million)

1,1818 (P)
8.3 7.6
4.3
186 4.2

~2.0X ~1.8X
2010 2014 2012 2014

Inception Time: <2 Years Inception Time: 2-5 Years

1,632

13 6.2
3.4 3.7
2.5
~2.5X ~1.1X

2010 2014 2010 2014 2012 2014

Start-up Inception Time
Average Investment/Investor by Start-up
<2 Years 2-5 Years Inception Time*
*Average Deal Size and Average Investment/Investor is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals >=USD 100
million; (E): Estimated, (P): Projected
**Investment by Start-up Inception Time is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment projected in
the previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

40
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 VC/PE funding has evolved over the years and is
now a lot more holistic in B2C & B2B segments
Share of No. of VC Deals by Start-up Type
4% 11% Others*
Cumulative 9%
Share 11% 2% 2% Social media
33% 11% 9%
of B2C 14% Education
B2B B2C 12%
focused 11% 20%
32% 63% VC deals 15% Travel
16% Aggregator &
B2C/B2B 67% 61% online marketplace
53%
40%
5% eCommerce

2010 2012 2014 Overall

Across Years

1% Others**

34% Communication/
100% Share Collaboration
64% 21% 28% 28%
of B2B
14% Productivity
focused 8% 7%
VC deals 7% 16% 9% Big data
14% 18% & analytics
2014 2010 16%
21% 16% 18%
ERP
21% 20%
B2B B2C B2C/B2B 16% Marketing &
2010 2012 2014 Overall advertising

Note: Analysis based on a sample of 237 deals across years

*Others include comm/collaboration, productivity, gaming, and other consumer internet; **Others include apps dev/web dev, security solutions, HW, content
mgmt, infra mgmt solutions, mobility solutions & others.
Source: Zinnov Product/Digital Start-up Database

41
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 VC/PE funding is maturing signicantly in deal
value and in diversity of focus areas
Illustrative

Security Location Based eCommerce Communication tool

Solutions Services
CRM Aggregator

Communication
tool Travel
Major
Investments Major
by Top 5 Investments by
Investors in Top 5 Investors in
B2B firms* B2C firms*
(Illustrative List) (Illustrative List)
Business Content
Analytics Management

Travel eCommerce

Business Resiliency CRM Robotics

CRM eCommerce eCommerce
& Service Availability Travel
eCommerce

*Top 5 Investors based on total amount invested during 2010-14 in start-ups incepted during 2010-14 in B2B and B2C
Source: Zinnov Product/Digital Start-up Database

42
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 NCR & Bengaluru continue to attract a large part
of VC/PE investments
Year-on-Year VC/PE Investments by Location* Total VC/PE Investments by Location*
(in USD million) (in USD million)

1,574
1,200 Includes ~USD 950 million
investment in Snapdeal, 1,128 524
400 Hike and Jabong 513
93 109
350 333 48
300
Amount Invested

Includes ~USD 250

million investment
250 in Olacabs Others Pune Chennai Mumbai Bengaluru NCR
221
200

150

100 80 Quick Facts

52 62
50 38 43
37 30
9
0 4 9 0.1 1.5
2010 2012 2014 NCR and Bengaluru 97% of funding in
account for ~3/4 of NCR is towards
NCR Bengaluru Mumbai Chennai the total investment B2C start-ups
Pune Hyderabad Others

Over the past two years, NCR has seen the highest investments by VCs/PEs, followed by Mumbai
Chennai and Pune are also catching up fast
*Investment by Location is based on Avg Deal Size (excluding deals >=USD 100 million) and Total No. of Deals, and using the Total Investment Commitment projected in the previous
slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

43
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 A number of VCs/PEs are maturing signicantly in
the Indian context
Analysis of Top 20 VCs/PEs (Based on Total Amount Invested)

No. of Deals: Low, Amt Invested: High No. of Deals: High, Amt Invested: High

Softbank
9
Avg: 2.1
Rank based on Amt Invested**

6
Tiger Global
5

4
Avg: 3.6
3
Nexus Venture Partners
Steadview Capital Bessemer Intel Capital Matrix Partners
Venture Cannan Accel Partners
2 Bharti Softbank Kalaari Capital
Partners Partners Sequoia Capital
eBay & SAIF Partners
1 Saama Capital Helion Venture Partners
Ru-Net IDG Ventures India
CDC Group IndoUS
Holdings
Venture Partners
0
No. of Deals: Low, Amt Invested: Low No. of Deals: High, Amt Invested: Low

0 1 2 3 4 5 6 7 8 9 10
Rank Based on No. of Deals*

*Rank Based on No. of Deals: Percentile rank (on a Scale of 0-10) of 20 Investors based on the number of investment made during 2010-14
**Rank Based on Amt Invested: Percentile rank (on a scale of 0-10) of top 20 Investors based on total amount invested during 2010-14, The top investor is ranked 10, second one is
ranked 5 and rest of the investors are given percentile ranks
Source: Zinnov Product/Digital Start-up Database

44
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 550+ angel investors focusing on India market,
~8X growth in total investment since 2010
Angel Investors Ecosystem in India*

2010 (E) 2011 (E) 2012 (E) 2013 (E) 2014 (P)

Number of
Active Angel 90+
8+ 29+ 48+ 112+ Total 550+ Angel
Investors Investors Focused
on India Market
(Individuals)

1:1 Total No.

3 19 45 95 73+
of Deals

Amount USD 4.2 USD 9.1 USD 23 USD 33.9 USD 32.2
Invested million million million million million

Average Deal USD USD USD USD USD

Size 80,000 416,000 476,000 312,000 368,000
(Excluding Outliers)

*Average Deal Size (Excluding Outliers) is based on publicly available deal values minus deals where an individual/Angel network has invested >=USD 1 million; (E): Estimated, (P): Projected
Amount Invested is projected for each year based on Average Deal Size (Excluding Outliers) and Total No. of Deals
For the year 2014, Total No. of Deals and Amount Invested is projected for the whole calendar year based on the run rate so far
Source: Zinnov Product/Digital Start-up Database

45
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Angel investments are accelerating for mature
start-ups
Angel Investments ($ Mn) by Start-up Average Deal Size by Start-up
Inception Time** Inception Time*
(in USD million) (in USD million)

32.2 (P)
0.42

10.6 0.37 0.37

0.28

21.7

2011 2014 2012 2014

4.2

Start-up Inception Time

<2 Years
2010 2014 Inception Time: <2 Years Inception Time: 2-5 Years
2-5 Years

Angel investment is not restricted to select areas, investors are ready to bet on innovative ideas
Past four years have seen a gradual shift in investment from the earlier dominant sectors to new upcoming sectors in both B2B and B2C
*Average Deal Size is based on publicly available deal values (In the public domain deal value is not available for every deal), excluding deals where an individual/Angel network has
invested >=USD 1 million; (E): Estimated, (P): Projected
**Investment by Start-Up Inception Time is estimated based on Avg Deal Size (excluding deals >=USD 1 million) and Total No. of Deals, and using the Amount Invested projected in the
previous slide as base; (E): Estimated, (P): Projected
Source: Zinnov Product/Digital Start-up Database

46
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Similar to VC/PE funding, angel investments are
also getting a lot more holistic
Share of No. of Angel Deals by Start-up Type 5% 13%
Others*
10% 26% 3% Social media
Cumulative 19% 13%
5% Education
14%
Share of B2C 19% 21% Travel
B2B B2C
focused 20%
34% 60% 100% 16% Aggregator &
angel deals online marketplace
48% 16%
37% eCommerce
B2C/B2B 16%
6% 2010 2012 2014 Overall

Across Years

5% Others**

33% 20% Communication/

Share of B2B 29%
38% 67% Collaboration
56% focused 47%
20%
angel deals 11% ERP
13% 13%
100% 12% Marketing &
13% 12% 14% advertising
2014 2010
13% 6% 14% Productivity
18%
B2B B2C B2C/B2B 20% 19% Big data
6%
2010 2012 2014 Overall & analytics

Note: Analysis based on a sample of 200 deals across years

*Others include comm/collaboration and other consumer internet; **Others include apps dev/web dev, security solutions, HW, content mgmt, & others.
Source: Zinnov Product/Digital Start-up Database

47
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Over 80+ business incubators and accelerators are
providing seed stage support to start-ups
Incubator/Accelerator Ecosystem in India

5+ 25+ 50+
MNC Private Public
Accelerators Incubators Incubators

Incubated 60+ Start-ups Incubated 160+ Start-ups Incubated 230+ Start-ups

Top Focus Areas in 2014

Consumer Internet Big Data & Analytics Productivity Unified Communication GIS Location

Apart from on premise guidance and support, some incubators are also providing virtual incubation to start-ups
Incubators/Accelerators with exclusive focus on specific/niche areas are emerging in India
Source: Zinnov Product/Digital Start-up Database

48
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Successful entrepreneurs are coming forward to
support other emerging start-ups
Indian entrepreneurs are mentoring start-ups through various channels

Mentoring Mentoring
through
1 Incubators/
Accelerators
3 through
support
platforms
GSF has roped in redBus
G Dorai Thodla, founder of
founder Phanindra Sama to iMorph, Inc., provides
deepen mentoring and support mentorship through
infrastructure TiE Chennai

Entrepreneurs Mentors

2 turned Angel
Investor &
The Bansals of Flipkart made
T
4 from
Networks
mentoring the In Mobi's co-founder and
investee seed investment in News in
start-up Shorts & are mentoring the CTO Mohit Saxena is
start-up mentoring App Virality

How P2P mentoring

Guidance from entrepreneurs who have already done it before
helps start-ups
Help in building connections with other mentors, investors and customers
Act as a potential customers and test the product in beta stage
Provides much needed encouragement and motivation
*Source: The Economic Times

49
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Business incubators and accelerators provide the
much needed hand holding to the start-ups

Mentorship & Connect entrepreneurs to peers, mentors and potential long-term advisors to the firm
Networking Connect with local venture funds and angel investors to raise funds

Partnerships Help start-ups build partnerships and business relationships to launch products in their
target markets

Workspace/Funds Start-ups which are a part of the incubation programme are offered office/workspace,
shared administrative services and some even offer seed fund

64 150 $215 K
36 6 18
Start-ups Mentors Average 650+ 50+ 45+
Start-ups Conferences Angels are have associated funding Start-ups Regular Partners
have /Events associated graduated with the received by are incubatees including
graduated have been with GSF from the Accelerator start-ups supported VCs,
from the organised Accelerator Accelerator part of the by angels,
Accelerator to programme Programme Accelerator including banks
Programme showcase programme virtual
start-up incubatees
talent

Source: GSF India, Microsoft Ventures India, Startup Village

50
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Event platform and support networks are fuelling
start-up growth
Number of National 2014 >12 Smaller group meetings happen almost every
Start-up Events 2009-10 2-3 weekend

Start-ups get access to mentors and experts; access to incubators is also fast tracked
Mentorship &
Idea Viability Hands-on-experience where entrepreneurs and aspiring entrepreneurs find out the viability
of their start-up ideas

Technology/Start-up conferences organised where start-ups showcase their talent and

Networking ideas to potential investors
& Funding Connect start-ups with other entrepreneurs and thus help them build a network of
their own

eWeek:
Entrepreneurship
Week, Annual Event
14,000 3,000,000 50,000
5,000 450 700,000 7,000 $120 Mn 75
Entrepreneur Niche Entrepreneurs
Events Member Participants stories have readers provided Entrepreneurs Fund has Start-ups
were Academic took part in been profiled from India networking have attended been have been
organised Institutions the events in by YourStory and opportunities the event raised launched
in 2014 & partners 2014 across via
support the world conferences
aspiring & and meetups
growing
entrepreneurs

Source: The Economic Times, National Entrepreneurship Network, Yourstory.in, Start-ups Unplugged

51
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Multiple start-up specic academic/training
programmes are providing mentorship
to entrepreneurs

Consultancy Provide consultancy and monitoring service to MSMEs/potential entrepreneurs and

enhance employability of participants

Training Design and organise training activities for different target group and undertake research
in the areas relevant to entrepreneurship

Incubation The training and academic institutions may also provide incubation support to start-ups

150+ Faculty 35+ 77 16

Start-ups Faculty are a combination Incubatees Partners which Events have

have been of mentors who are till date include academic been
trained in entrepreneurs, investors institutions, organised till
India and world experts, government date to
and professors from agencies & promote
business school industry experts entrepreneurs

Source: Start-up Leadership, NSRCEL

52
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 SECTION IV EMERGING TRENDS AND
RECOMMENDATIONS
A Increased M&A Activity
Enterprises acquiring start-ups Start-up consolidating with Start-ups

Start-up Start-up Start-up

Enterprises

Talent acquisition Accelerate consolidation

Technology gains to existing portfolio Enhanced customer base

Favouring Factors to C Key Asks from the Government

B
Branch Out from India Clear transparent framework for disbursement of the
start-up fund
Eligibility relaxation to participate in large scale
Global Market technology projects
((USD) Opportunity
Revised TDS laws
Relaxation from banks to secure financing/funding
Easy Access to
Capital in the US Tax saving schemes on funding
Special Regulatory Zones (similar to SEZ) to test
industry products

53
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Given the vibrancy in the ecosystem and its
potential, the M&A activity is on the rise in India
Large firms are acquiring Indian start-ups for talent and embedding innovative technology in the existing portfolio

Acqui-hiring There's growing interest from Facebook, Google and Yahoo! in acqui-hiring from India

Technology Oracle acquired Bitzer Mobile in 2013. Bitzer augments Oracles portfolio and is expected to be a core
Acquisition component to its mobile security strategy

Start-ups are acquiring start-ups to accelerate consolidation and extend reach to existing customer base

Consolidation wave sweeping the consumer internet space

GoGrab.in merged with AnyCommerce in 2014
Consolidation Flipkart acquired Myntra in 2014
Zovi acquired Inkfruit in 2013
Flipkart acquired Letsbuy in 2012

Customer Goozop a global digital agency, acquired Red Digital, an Indian social media agency to increase revenue
Acquisition from Indian operations

54
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 As M&A is witnessing increased momentum in India,
investors are getting more exit opportunities
Tech M&A in India
(Illustrative List)

USD >USD
135 million 10 million

USD
25 million
USD 31 Not disclosed
million USD 300-
US
330
3 million

2011 2012 Not disclosed 2013 USD

2014
62 million USD
15
5 million

USD USD
136 million 43.4 million USD
15 million
Not disclosed

Not disclosed USD

9 million
Source: Venture Intelligence, YourStory.in, NextBigWhat.com, Others

55
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Start-ups are betting high on evolving ecosystem,
however, a number of challenges are constraining
the growth
Growth Barriers

With long sales cycles,
customer acquisition is a
major pain point
High likelihood of receivables
turning into bad debt
(5-10% probability)
Despite maturing ecosystem
securing funding is tough
Start-up funding is perceived
as one of the most important
success criterion
Complex and stringent
government policies are a
major cause of concern
Lack of execution clarity on
existing policies creates state
of uncertainty

Source: Zinnov, NASSCOM

56
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Demand for supportive government policies
continues to exist
Key Policy Related Asks from the Government

1 Clear and transparent framework for

disbursement of the ` 10,000 crore
2 Preferential treatments/relaxation of
eligibility criterion by government for
start-ups to participate in large scale
start-up fund
technology projects
Risk capital for first gen entrepreneurs,
growth capital for serial entrepreneur
and sector-specific allocations

3 Re-imagine TDS and allow start-ups to

4 Guidelines to public sector banks for
relaxation on debt financing terms/
collateral/invoice requirements for
pay taxes at the end of the year working capital asks
(instead of tax being deducted at source)

5 Provide tax saving schemes on return

on VC/angel investments in start-ups
6 Create Special Regulatory Zones (on the
lines of SEZ) with regulatory flexibility to
and build ecosystem excitement test best products in industries such as
VOIP, Healthcare, BFSI, etc.

Though the Government is making right efforts to make the start-up ecosystem more conducive to growth, there is still a need for clear and transparent guidelines
Source: Zinnov, NASSCOM

57
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 About NASSCOM 10,000 Start-ups
10,000 Start-ups is an ambitious attempt by Indias premier IT industry
body NASSCOM to scale up the start-up ecosystem in India by 10x. The
programme is supported by Microsoft, Google, Intel, Verisign & Kotak.
10,000 Start-ups aims to enable incubation, funding and support for 10,000
technology start-ups in India over the next 10 years.
The programmes vision is to:
Foster entrepreneurship
Build entrepreneurial capabilities at scale
Strengthen early stage support for tech start-ups
To meet these objective, the programme has brought together key
stakeholders of the ecosystem including start-up incubators/accelerators,
angel investors, venture capitalists, start-up support groups, mentors and
technology corporations. With 10,000 Start-ups NASSCOM aims to build
a vibrant ecosystem for technology entrepreneurship in India.
Indias largest platform to connect with the tech entrepreneurship
community
Under the aegis of 10,000 Start-ups, NASSCOM organises and supports
workshops, meet-ups, hackathon, pitches for technology entrepreneurs
building solutions for web and mobile in order to build a vibrant tech
start-up ecosystem in the country. Since its launch in April 2013, the 10,000
Start-ups has done about 350 events in 22 cities of the country which were
attended by a whopping 25,000 attendees.
In the last one and half years, 10,000 Start-ups has built a vibrant social
community for more than 100,000 followers and an opt-in mailing list of about
30,000 existing and aspiring entrepreneurs. The programme has also hosted
some of the global icons of the technology world like Eric Schmidt, Michael
Dell, Vinod Khosla, Sundar Pichai and more recently, Satya Nadella.
58
TECH START-UPS IN INDIA
A BRIGHT FUTURE
Indias biggest tech start-up programme in terms of
impact.
After it was launched in April 2013, the 10,000
Start-ups programme has received over 9,000
applications from various parts of the country and about
500 tech start-ups have been shortlisted in 2 phases.
These start-ups have got the opportunity to pitch to more
than 30+ partners of the programme including leading
accelerators, angel investor networks and venture
capital rms.
These rms received access to a pool of mentors including
technology leaders, successful founders, domain experts,
angel investors, etc. Beyond this, they also received
platforms to meet large enterprises, system integrators
and strategic who could potentially be customers and
strategic partners. With the support of the Government
of Karnataka, NASSCOM also established a co-working
facility called Start-up Warehouse exclusively for tech
start-ups right in the heart of the city.
Through various initiatives, the programme has been
able to successfully impact 150+ technology start-ups
out of the 500+ who have been shortlisted under the
programme. These rms have raised funds, got into
acceleration programmes, found customers and on-
boarded mentors through the programme.
We look forward to scaling this number drastically in
the days to come!
 Illustrative list of VCs/PEs and angel investors/
networks
VCs/PEs Angel Investors/Networks
Accel Partners Freemont Partners Norwest Venture Partners Abhishek Goyal GSF SuperAngels Ratan Tata

Ojas Venture Indian Angel

Ascent Capital Google Capital Amit Ranjan Ravi Gururaj
Partner Network

Avalon Ventures Greylock Partners Omidyar Network Anand Ladsaria Kanwaljit S Bombra Ravi Kiran
Bertelsman Helion Venture Partners Qualcomm Ventures Anand Lunia Kishore Ganji Ravi Trivedi

Bessemer Venture
IDG Ventures Ru-Net Holdings Angel Prime Krishna Motukuri Rehan Yar Khan
Partners

Bharti Softbank IndoUS Venture Partners Saama Capital Anupam Mittal Krishnan Ganesh Sachin Bansal

Blackrock Intel Capital SAIF Partners Bhupen Shah Manav Garg Samir Sood
Blume Ventures InterWest Partners Sequoia Capita Bimal Shah Manoj Menon Sasha Mirchandani
CDC Group Inventus Capital Partners Softbank Binny Bansal Mumbai Angels Sharad Sharma

Cisco Ventures Kalaari Capital Steadview Capital Calcutta Angels Murali Venkat Rao Sunil Kalra
Clear Stone
KITVEN Funds Telstra Ventures Ccube Angels Naveen Tewari Umang Kumar
Venture Partners
Draper Fisher Lightspeed Venture
Tiger Global Chennai Angels Nitin Aggarwal Urrshila Kerkar
Jurvetson Partners

Venkat
eBay Matrix Partners Unilazer Ventures Deep Kalra Nitin Singhal
Vallabhaneni

Vertex Venture
Epiphany Ventures Mayeld Fund Dinesh Aggarwal Rajan Anandan Vikash Taneja
Holdings

Fidelity Growth Nexus Venture Walden Girish

Rajesh Sawhney Vishal Gondal
Partners India Partners International Mathrubootham

59
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Illustrative list of incubators/accelerators and
support networks/event platforms
Support Networks/
Incubators/Accelerators
Event Platforms
5ideas Kyron Target Accelerator Program In50hrs
91Spring Board MICA Incubator: MICA-EDC TBI BITS Pilani LetsVenture

TBI IIT Delhi Microsoft BizSpark India

BitChemy Ventures Microsoft Ventures
Startup Challenge
T-TBI (Technopark Technology
10,000 Startups: Business Incubator) NASSCOM Product Conclave/
Boot Up Factory
NASSCOM Emerge Awards
Manipal Institute of Technology
National Design Business
Catalyzer Innovation Centre NEN
Incubator (NDBI) - NID Ahmedabad
CIE - IIIT Hyderabad NSRCEL (IIM Bangalore) TBI - NDRI Karnal NextBigWhat
CIIE - IIM A PayPal Incubator TBI VIT SME Joinup
Citrix Start-up Accelerator PitneyBowes Accelerator Program The Fabric StartDunia
Freemont Partners RTBI - IIT M Tlabs - Times Internet Group STARTOHOLICS
Growth Story SAP Startup Focus TSC (The Startup Centre) Startup Festival
GSF SEED MDI Veddis Advisors Startup Weekend
SIDBI Innovation & Incubation Venture Centre
Health Start Startups Unplugged
Centre - IIT Kanpur
Venture Nursery
IIITB Innovation
SINE - IIT Bombay Villgro Startups.in
Centre - IIIT Bangalore
Wadhwani Center for
Indian Angel Network Entrepreneurship Development
Startup Oasis TIE
Incubator - ISB Hyderabad

Khosla Labs Start-up Village Zone Startups Yourstory

60
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 Disclaimer
Methodology and assumptions for the Analysis of Top 20 VCs/ The slides including names and logos of Start-ups/VCs/PEs/
PEs in Page No.43 Angel Investors/Angel Networks/Incubators/Accelerators/Event
Platforms/Support Networks/Academic/Training Programs/
1) This analysis is based on publicly available deals done by VCs/
Banks/Financial Institutions and pictures of start-ups Founders/
PEs. It is not exhaustive in nature as this list may not include
Co-Founders/CEOs are illustrative in nature, and the logos,
some top investors as all their deals may not be available in
trademarks and pictures are owned by respective companies
public domain
The M&A deal values included in slide No.53 are sourced
2) For ease of analysis, in deals involving multiple investors, the total
from publicly available sources. In some cases this may be an
deal amount is split equally among investors. In deals where the
approximate value (not the actual deal value) as at times the deal
amount invested by each investor is available from public sources,
value available in public domain is based on analysts or industry
then in such cases the amount is allocated accordingly
leaders estimates

61
TECH START-UPS IN INDIA
A BRIGHT FUTURE
 List of Sources

Zinnov Public Sources:

Repository:

Zinnov
product/
digital NASSCOM 10,000
start-up Start-up Database
database
Angel List
Yourstory.in
Techcrunch/Crunchbase
Primary Venture Intelligence
Interactions: Start-up Websites
VC Websites
35+
Technology Angel Networks
product Websites
companies/
start-ups Media Articles
Interactions
with VC &
Angel
Investors

62
TECH START-UPS IN INDIA
A BRIGHT FUTURE
International Youth Centre
Teen Murti Marg, Chanakyapuri
New Delhi 110 021, India
T 91 11 2301 0199 F 91 11 2301 5452
research@nasscom.in
www.nasscom.in