Indian deep-tech startups may soon capitalise on increasing data nationalism.
By Srinath Srinivasan
THE Indian startup ecosystem has a good number of deep-tech startups. As per Nasscom’s Indian tech startup ecosystem report 2019, 18% of all startups in India are into deep-tech. This translates to over 1,600 out of the overall 9200 startups that came up between 2014-2019, growing at a CAGR of 40%. The technologies these startups focus on include AI, ML, AR/VR, Blockchain, and IoT, to name a few. These are spread across industries such as fintech, healthtech, consumer wearables, agritech, and more.
“The availability of large volumes of data in the last few years and improvement in computing power of devices are important factors behind deep-tech gaining momentum. The technologies have been in existence for over a decade, some even in Indian labs, but this is the time for them to come to market,” says Siddharth Pai, co-founder and managing partner of Siana Capital, focused on investing in deep-tech startups.
Deep-tech finds application in a vast range of areas including fintech, ed-tech, mobility and in user behaviour analysis in retail, largely because of millions of data points that get generated on a day-to-day basis. However the applications for a country like India could be much diverse and specialised; with that comes the complexity of managing and utilising data.
“We collect environmental data from a host of sensors located across the world and several institutions studying the climate in the country. One important client is the insurance industry. We can provide them with end-to-end analysis of the public health which would enhance their business decisions,” says Akshay Joshi, co-founder and CEO, Ambee, a deep-tech startup working in environmental monitoring.
Another unique area where an Indian startup, Aquaconnect, is operating in, is aquaculture. Unlike environment monitoring where data collected is significant and huge all through the year, aquaculture as a sector provides seasonal data. “For instance, in shrimp farming, the culture period is around 4-6 months and most of the data needs to be collected within that time at the site,” says Rajamanohar Somasundaram, co-founder and CEO of Aquaconnect. Today farmers are the biggest beneficiaries due to the nearly free services they receive but in future, like in European countries, the scope could widen to the point of influencing fisheries policies in the country.
In order to get tech infrastructure ready in-house and keep the operations running, Ambee and Aquaconnect have received funding, in the range of $700,000 to a little over a million dollars. Pai says that the initial days post developing the product are the most difficult for these startups. “The value of debt increases between the time from lab to market. This is where they need the investments and guidance to support their activities,” he explains.
One of the recent examples of that is BlueSemi, a Hyderabad based deep-tech startup, led by Sunil Kumar Maddikatla. The company, which has raised $300,000 so far, has worked on a rather unusual product line —wearables that can be powered by radio waves in air. “Developing this fully in India will make the final product 1.5x more expensive but this is what we want to do. We want to be the first startup to localise products 100%,” says Maddikatla.
However, there are deep-tech startups which have been bootstrapped and have touched the first million dollars in revenue. Their challenges come in the form of fast sales cycles, IP and stiff competition from the other two startup hubs of the world— China and the USA.
“We integrate deeply with consumer brands and offer end-to-end analytics services for our clients based on the user data collected. The world is becoming a lot more open stack and we can expect more opportunities even as more competition shows up atthe same time,” says Arpit Chhabra, co-founder and CEO of IoTfy. Chabbra today competes with not just other startups but platforms of larger OEMs. He says that partnering with Original Design Manufacturers (ODM) was key to opening up the market to big consumer brands and the initial years were difficult.
All of these diverse startups have a common ground—they are Indian and they want to go global at some point.
“Indian startups have an opportunity in the form of developing trust with consumers and clients amid the growing data nationalism. Capital was scarce in the past but now entrepreneurs have access to it as well,” says Pai. Internet which was supposed to be without boundaries is slowly moving towards becoming pockets of sovereign cyberspace. Data is being traded and used to compete against each other like other commodities in the past.