India has produced seven e-commerce companies that are valued at more than or equal to a billion dollars
The e-commerce market in India is set to cross $16 billion in market size by the end of this year, according to a report by Assocham and Deloitte. The e-commerce companies in the country have gathered around $4 billion in venture capital fund in the first half of 2015, with Flipkart alone having raised $3.14 billion in total from 15
investors in 10 funding rounds.
According to a report on unicorn companies by CB Insights, India has produced seven e-commerce companies that are valued at more than or equal to a billion dollars. Even though these valuations are not to be taken on its face-value due to many variables attached to it, it shows investors confidence in the market.
Buoyed by the availability of funding pool and a near-mature ecosystem, Indian tech-entrepreneurs have come a long way from just selling books online. Tech-entrepreneurs have come up with different solutions for Indian needs such as booking bus tickets, on-demand cabs, paying bills, discovering restaurants, etc. Innovative business models sprouting from India that are ready to take on their global counterparts has created a rush among investors to put their money into the next big company.
Investors who would typically pick up stakes in companies at a later stage are now investing in as early as in Series A or angel round. Keeping aside the fact that none of the e-commerce companies are moving towards profitability, a few verticals are showing early signs of consolidation. In one of the biggest buyout in the e-commerce space Flipkart acquired its competitor Myntra reportedly for $300 million. To take on the global giant Uber in the taxi-hailing space, Ola bought TaxiForSure, its near competitor for $200 million.
After US and China, India—where the total mobile internet users are 314 million, seems to be the logical market for venture capitalists to put their dollars in. Seeing the huge potential of the market, all tech-companies in the world have got their eyes set in India. Amazon, Uber, Ebay, Alibaba, Rocket Internet, all have either set shop or invested in Indian e-commerce companies to get the most out of it.
The Chinese e-commerce giant Alibaba has invested $500 million in Snapdeal and $525 million in Paytm. Last year, Amazon’s Jeff Bezos had said India is the second largest market for him after the US. He then promised to pump in $2 billion and is reported to have prepared a $5 billion ‘war-chest’ to compete with the likes of Flipkart and Snapdeal.
And these e-commerce companies have not only brought foreign investors in India but also the Indian talent which had settled in the US since 90s when it was going through its own tech-boom. E-commerce companies like Flipkart, Snapdeal, Paytm, Zomato and several others have hired top-notch tech-talent from the US to make their product as
robust as any global company.
As they say Silicon Valley is more of an idea than just a place, and it will not be wrong to say India is having its ‘Silicon Valley’ moment right now.
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