Are we Living The Golden Age of Indian Entrepreneurship?
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In the 1980s, the first generation of Indian entrepreneurs broke through the glass ceiling and began making a mark on the American technology landscape as start-up founders and CEOs. Among these legends, there was my partner, Kanwal Rekhi, and also Vinod Khosla, Naren Gupta, Prabhu Goel, Suhas Patil to name a few — who went ahead to launch companies like Sun Microsystems (acq: Oracle), Excelan (IPO) and Cirrus Logic (IPO).
A second and much bigger wave came during the dotcom era of the mid-90s, when people like Sabeer Bhatia (Founder of Hotmail), BV Jagadeesh (President & CEO at Netscaler, later acquired by Citrix) and Ram Shriram (founding board member and one of the first investors in Google) made their mark.
Since then, the US has continued to have successful, Indian-born founders and CEOs. A recent report by the Kauffman Foundation found that 33 per cent of all immigrant-founded companies in the US have Indian founders, more than any other minority ethnicity combined.
Today’s start-up cycle boasts of its own share of renowned Indians leading the change at exciting and impressive companies. Jyoti Bansal had to wait for seven years before he got his green card to finally start AppDynamics, which was acquired this year by Cisco for $3.7 billion.
Then Dheeraj Pandey went from being voted as the “Best All-Rounder Student Among All Graduating Students in All Disciplines” at IIT Kanpur to lead Nutanix, Inc.
Manish Chandra shifted his focus from enterprise software to consumer internet businesses, ultimately becoming CEO and Co-founder of Poshmark, the largest social fashion marketplace for millions of users worldwide.
And of course, don’t forget that Indians have penetrated the top ranks at global Fortune 500 companies, including Google, Microsoft, Adobe, Pepsi, MasterCard, and Wayfair, to name just a few.
Successful Exits on The Rise
Indian-founded US companies have also provided some incredible acquisition opportunities. Since 2012, more than 25 Indian-founded companies have seen M&As worth more than $500 million. Topping that list is Western Digital’s acquisition of SanDisk, worth a whopping $19 billion, followed by several acquisitions from Cisco, HPE and SAP.
Another way to consider how Indian entrepreneurs have made their mark is to scrutinize the fascinating array of IPOs in the last five years across multiple sectors. The software and services sector comes in at a combined market cap of $26.2 billion.
And while the pharmaceuticals, biotechnology and life sciences industries came in at second place based on the number of IPOs (6), the retail industry saw a much larger market cap of $6.67 billion, compared to just $397 million earlier. However, most notable are companies that were acquired post-IPO, including Auspex Pharmaceuticals (acquired by Teva Pharmaceutical Industries for $3.5B), Nimble Storage (acquired by Hewlett Packard Enterprise for $1.9B), and Cvent (acquired by Vista Equity Partners for $1.65B). In fact, 10 of the 34 companies — approximately 29 per cent — were acquired after IPO.
A Peek Into The Future
So what’s next for the golden age of Indian entrepreneurship in Silicon Valley? It seems that the future and continued successes are already well in the making, judging from the proliferation of Indian-founded unicorns — start-ups valued at more than $1 billion — in the US.
As many as 14 out of 261 unicorns boast Indian founders, for a combined valuation of $35.17 billion and combined funding of $81.8 billion. So which is the #1 industry for Indian-founded unicorns? Is definitely IT, followed by healthcare.
With many Indian-led US companies well on their path to a successful exit — creating jobs and wealth — there is also a big wave of entrepreneurship building out of India itself. If just 1 per cent of the Indian population were to become entrepreneurs (half the rate of in the U.S.) India would have ~13 million tech entrepreneurs.
This is transformational not only for India, but worldwide — imagine the impact on the global technology ecosystem. With two very large movements underway, Indian entrepreneurs have gone from yesterday’s tech outsources to today’s tech innovators, disrupting global markets.