In around a decade, the Indian startup ecosystem has scaled to become 3rd largest start hub in the World followed by the US and China. No doubt the success of consumer internet companies have played and continue to play a big role in that. The ecosystem has seen a cycle of boom, bust and exits with a promise that India has the ability to return capital to investors, proved to an extent by Flipkart’s sell out.
As e-commerce continues to be the biggest bet for entrepreneurs and investors in 2019 and beyond, the new crop of opportunities is beginning to break out even as existing ones like foodtech continues to explode. FE Online highlights some of those, though investor lens, that would trend in 2019.
Foodtech to fight it out – Early stage funding including angel deals will continue to remain relatively muted for startups in comparison to the 2014-15 party even as Softbank, Alibaba, Tencent, and Naspers will continue to dominate the investment scene by taking bigger punts in their bets, says angel investor Sidharth Rao. As a result, food delivery certainly will see a battle as bloody as e-commerce as Swiggy and Zomato have a slugfest while Ola with FoodPanda and UberEats try to find new revenue streams further chipping away the pie, says Rao.
Connecting last mile – It continues to be broken but the good news is increasingly we are seeing both corporates and startups working towards solving this problem, says Anil Joshi, Managing Partner, Unicorn India Ventures. India is a large country thus impact and spread of development works at its own pace. However, as more startups build their business ideas on a digital backbone and use of IoT, Joshi expects to see a sustainable solution to solve the last mile connectivity problem that will excite the investors to back the company. There have been such examples, for instance, Rivigo which has revolutionised the logistics industry by leveraging next-gen tech and it has seen some of the biggest names in the VC industry backing it, adds Joshi.
Electrified Transportation – Electric mobility sector has been developing away from the limelight. Particularly the batter-driven two-wheeler market is an interesting space growing at a fast pace, says Manish Singhal, founding partner at deeptech fund Pi Ventures. For instance, startups like Ather Energy that launched their smart e-scooter in Bengaluru last year. The market growth will be led by e-commerce to bring efficiency deliveries using e-vehicles. Also, the opportunity aligns with the government vision of switching to electric mobility, says Singhal.
Insurtech to breakout – Even today, a bulk of insurance business happens through agents but that is beginning to change with the use of data and artificial intelligence by many companies like Policy Bazaar, says Joshi. The information about policies and choice of insurance products are now easily available to consumers across. While the industry has been growing at a healthy pace, Joshi expects it to be exponential as more insure tech companies enter the fray and investors loosen their purse strings to back them.
Deepening deeptech – 2019 will see the further entrenchment of technologies like artificial intelligence across sectors in the digital world, particularly in healthcare to automate routine problems without error. Blockchain should also be seen compelling use cases, especially in fintech, says Singhal.
‘Voice’ gets louder – As voice interfaces and assistants like Alexa and Google have given consumers a peep into the possibilities in every sector including banking, healthcare, education etc, Rao says that it will hit a meaningful scale only once the regional languages are cracked. While there has always been a lot of chatter around regional language content online, it hasn’t really had a big moment yet. Voice will be that platform through which this will happen. There will be a lot of startups attempting to take a crack at this, adds Rao who is also the co-founder at digital agency Webchutney.
E-wallet boom – Fintech sector continues to grow in the fast lane. Paytm can easily be called a pioneer in finch as it gave the power of choice and how to spend to people who never had wallets or bank accounts, says Joshi. Following the success of Paytm, many other wallet companies have shown promise. We believe this sector will continue to attract investors’ interest in 2019 as the business ideas in fintech, he says.
Direct-to-consumer market scale up– Over the last 2 years, according to Rao, India has seen a few dozens of direct-to-consumer brands getting built largely using Facebook and Instagram to get discovered by prospective customers. This year, says Rao, it will be surprising if this space doesn’t grow 3-4x and its a huge opportunity for non-tech entrepreneurs to build reasonably large businesses and brands.