Why Global Expansion Should be the Next Step for Startups after Raising Funds
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In India, many entrepreneurs dream of expanding their business on an international scale. The global expansion presents huge opportunities for startups to sell their products and services in a broader market. India has already witnessed many startups like Zomato, Practo, and Wittyfeed venturing into the foreign land successfully. However, one of the biggest obstacles that hold back entrepreneurs from taking the international route is money. In such a scenario, a good external funding could be the best answer to this problem.
Entrepreneur India spoke to entrepreneurs and investors to know why startups should consider global expansion after raising funds.
Customer Acquisition :
The decision to go global for startups depends on the type of startup and industry.
Prasad Vanga, Founder & CEO, Anthill Ventures emphasized that in most cases the first 2 years of scaling up is always in a geography that the team has expertised in and understands the sales & marketing channels well.
“The going global decision also depends on the product or service that is being offered, for example, some companies building Enterprise SaaS products identify global clients as potential targets vs domestic Indian companies so they would have to invest in international sales distribution channels for customer acquisition. However for countries that have a small domestic market like Israel or Switzerland the strategy to go global makes lot of sense,” shared Vanga.
Some prerequisites for going international are business fundamentals such as market attractiveness, potential product fit, etc. Rekuram Varadharaj, Co-founder and COO, healthi, believes once these criteria get fulfilled, funding can help in successful pilots and/or the ability to commit to markets.
“There has been a keen interest from providers and payers in the ASEAN and EMEA regions for healthi's user health analytics and engagement platform. The recent funding from Montane Ventures has provided resources to roll out international pilots to this end in the next 12 to 18 months,” said Varadharaj.
Last month, the digital healthcare startup raised $3.1 Mn funding from Montane Ventures. The founders are planning to use the latest funds for international expansion.
Increase Your Business Success Rate:
When you confine your business within a country then you are slamming the door in the faces of many potential consumers. Many companies restrict their expansion plans due to monetary issues and look to raise funding. According to Ashish Bahukhandi, founder and CEO Apps Discover, funding and global expansion are two different terms that are cordially proportional so when a company moves globally after raising funds it not only brings more business but also profit.
“Global expansion is a key to success as it provides you with a bigger market and ideal consumers. In new market space companies often find their legitimate consumers who are interested in their product offerings. So, when a company becomes global it increases its success rate phenomenally,” said Bahukhandi.
The ad tech startup Apps Discover is now looking for funding for its further expansion in Australia, apart from India currently the company holds a strong presence in South Asian countries like Singapore and Indonesia.
Impact Lives Beyond Global Borders:
The key to expanding your business to other countries is to have a product that is innovative and has the potential to impact lives beyond geographical borders.
Leo Mavely, Founder and CEO, Axio Biosolutions, feels raising funds can help scale up operations, which includes a complete understanding of the market, its compliance protocols, business approvals and consumer behaviour among others. All this requires strategic investment right from deploying human resource, to getting approvals and promoting the product in that market.
“Axio Biosolutions, today, has a presence in over 12 countries. We believe, in keeping with our governments vision to ‘Make in India’, it is important that our product innovation is not just limited to one particular market and serves the global community,” said Mavely adding that for all this, strategic investments need to be made to reach the right market and meet the company’s overall vision.
Axio Biosolutions has recently received USFDA approval, which will help the startup to expand to the U.S., in the near future.