The number of tech startups in India has grown year-to-year as workforce quality and investments continue to improve. In 2017, the country had the third-largest startup ecosystem. In 2019, Bain reported that venture capital (VC) investments reached $10 billion, the second-best annual VC investment number ever. About 80% of those funds went to tech companies in the software/SaaS, consumer tech, and fin-tech sectors.
While everyone assumed that this would possibly be the best year yet, no one could have foreseen the events of 2020. After a somewhat average start to the year, venture capital investments dropped to $1.5 billion for the second quarter of 2020, the smallest quarterly tally since 2016. The not-for-profit association NASSCOM released a report detailing the dire situation. However, in November, they updated their previous document, outlining an optimistic future, as estimates say that over 50% of tech startups expect revenues to return to pre-pandemic levels by June of 2021. NASSCOMs president, Debjani Ghosh, noted that The Indian startup ecosystem set a benchmark, in that it has remained resilient during this disruptive year.
The association urges companies to pivot to growing verticals, be vocal for product solutions, optimize operational metrics, encourage digitization, and foster partnerships with ecosystem players. The tech hiring freeze dropped by 20% in September-October, as compared to April-May. Thus, demand for talent should rise in sectors such as AI and product management. Furthermore, analysts assume that investors will be pouring money into deep-tech solutions for automation and analytics.
Live Casino Games an Untapped Sector for Indian Entrepreneurs
Due to outdated laws and politicians that remain lackadaisical regarding regulating games of chance over the internet, Indians are playing at offshore sites, giving their money to foreign entrepreneurs. Online gaming is big business, as the current global market is worth $66 billion, and estimates say that it will hit $93 billion in the next three years. Playing live casino games online is now the norm, as most players prefer it over visiting a land-based venue. The ability to play casino classics such as Roulette, Andar Bahar, and Teen Patti, anytime from anywhere, appeals to anyone enthusiastic about these games.
Riga-based Evolution Gaming is the industry leader when it comes to offering live-dealer tables. In the third quarter of 2020, the iGaming giant announced extensive growth in earnings for the period. Because of mobile-play availability and widespread internet access, coupled with the continuous launch of new titles, demand for live casino games continues to grow. Evolution is seeing significant growth in Asia, where revenues are sky-rocketing 150% year-on-year. Ezugi is a Tel Aviv-based software developer that targets the Indian market, providing Indian-specific table games in Hindi. If the government regulated online gaming, Indian entrepreneurs would be providing these games to residents instead of foreigners, thus keeping these gaming revenues in India.
Why Do Most Indian Startups Fail?
Despite the encouraging numbers mentioned above, according to an IBM Institute for Business Value and Oxford Economics study, almost 90% of Indian startups go under within five years. Between 2015 and 2017, more than 1,500 startups shut down. The study notes that the most common reason for this is the lack of innovation, as 77% of venture capitalists believe that these companies fail because they try to emulate foreign models and lack new technologies. Other factors cited include inadequate mentoring, poor business ethics, and poorly-skilled labor.
Experts believe that Indian entrepreneurs do not understand how to position their products in the marketplace. Indians do not analyze to figure out who their customers are and how to reach them. Management teams do not understand the imperative of positioning a product based on its price, value, identity, and reliability after studying consumer behavior. Thus, they send the wrong signals to consumers. Financial mismanagement is another major issue. Many owners fail to estimate the required capital for the proper functioning of their company. There is also a lack of financial aid for up-and-coming tech businesses in India compared to other developed countries. However, copied business ideas remain an eye-sore, especially evident in the Indian app development sector.