B2B Start-Ups In India Ride The Digital Transformation Wave
Most of it can be attributed to their nimbleness and lack of baggage
The B2B start-up growth is accelerating at an unparalleled rate. B2B start-ups in India have more than tripled between 2014 and 2018 from 900 to 3,200. One of the reasons for this rise is the ability of the enterprise start-ups to solve problems faster, better and cheaper. This can be attributed to their nimbleness and lack of baggage.
With an exponential growth in data generation and consumption, and advent of new technologies, continuous and relentless innovation is table stakes. As the world becomes increasingly digital, rewiring old operating models, experimenting to make products/solutions smarter and rethinking the go-to-market strategy becomes top of mind for start-ups and enterprises alike. For example, Domino's today is not merely a pizza company, but a technology company which is selling pizzas. From automated phone orders using artificial intelligence (AI) assistants to testing driverless cars with Ford, the rate of change has been much faster.
It is evident that evolving constantly to leverage technological advancements is the way for start-ups to continually deliver value to customers and the ecosystem.
Made in India for the world
Industry 4.0 is a technology revolution which along with India’s upward digital economic trajectory and new opportunities, is encouraging reverse brain drain, in the form of Indian entrepreneurs returning from overseas. These start-up founders have accumulated expertise and exposure and have access to global networks. As a result, we’re seeing a tectonic shift in the Indian start-up scene, in the way B2B start-ups are now leveraging the engineering talent pool available here and successfully building products in India for the globe. Indian B2B unicorns such as Freshworks, Icertis and Udaan are helping bolster the Indian start-up image on the globe, which in turn helps other start-ups in the country gain a foothold in the global market.
Add to that a growing presence of global innovation centers (GICs) in India, which is fueling the evolution of the B2B start-up landscape in India. These GICs that are fairly autonomous in their decision-making are becoming the innovation centers for corporations across the globe. They are increasingly contributing to the start-up space by building start-up engagement programmes. Corporate accelerator programmes arising from such an effort are paving the way for a sturdy foundation for enterprise tech start-ups. Innovation is a measure of both external as well as internal shifts in modus operandi and B2B start-ups are making inroads in external innovation by exploring adjacencies and partnering with corporate accelerators.
There is a maturity, both at the demand side which is the global innovation centers and the supply side i.e. start-ups, therefore making the B2B start-ups fare well.
Another shot in the arm for enterprise startups is the huge rise in funding opportunities. Investment in B2B startups touched $3.7 billion in 2018, a steep rise of 364 per cent from 2014, according to a study conducted jointly by NetApp and Zinnov. Availability and access to funding opportunities enables growth stage start-ups to leapfrog to hyper growth.
AI: The game changer in the start-up space
AI is one of the big driving forces behind digital transformation. With AI in the picture, the way businesses operate is changing rapidly across the globe. The strong Indian talent pool that is skilled in emerging technologies such as AI, machine learning and deep learning is bringing solutions, through their start-ups, to real problems faced by enterprises. We’re seeing several AI start-ups emerge in India and the globe.
Founders find support
Start-ups are an important part of our economy and the Indian government is also contributing in promoting innovation by formulating policies to encourage entrepreneurship. There is an abundance of opportunities for Indian start-ups as the government brings in policy reforms to improve ease of business, provide financial support and networking opportunities.
A welcome move by the government came in recently with the exemption of ‘angel tax’, the income tax payable on capital raised by unlisted companies via issue of shares where the share price is seen in excess of the fair market value of the shares sold. This will help start-ups sustain themselves.
Additionally, the global Indian diaspora and presence of Indian-origin leaders at the helm of leading technology companies such as Microsoft and Google have encouraged strategic shifts in the global business outlook, invariably helping bring focus to the immense talent and knowledge pool that India holds.
Also Read: The How-To: Digital Transformation In Action
Digital transformation led by the rapid pace of cloud computing and adoption of deep technologies has provided B2B start-ups with an opportunity to gain a strong foothold in India as well as target global enterprises. The mentorship from corporate accelerators and incubators, along with a rising interest from the VCs and investors has given new impetus to the start-up ecosystem in India. If we want to move India from an $8 billion start-up economy to $80 billion, startups must begin exporting their products and this support can enable them in pursuing this goal.
We have the talent and the mindset to conquer the world and there is a palpable optimism that the ecosystem will continue to give the start-ups wings to fly.