Investment in Smart Cities is the Groovy Thing in Startups working on developing smart city solutions should attract attractive capital, believe investors and technologists.
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With today's funding and investment scene not the same as it used to be five years ago, domain experts believe that working towards a problem-solving approach is now the in-thing as far as both investors and owners of new ventures in India are concerned. Also, it has been proved beyond suspicion that investors and venture capitalists (VCs) are willing to pump-in funds for startups working on mitigating societal issues in tandem with next-gen technology viz Machine Learning (ML), Artificial Intelligence (AI), the Internet-of-Things (IoT), Predictive Learning, and more.
This is substantiated when we consider the fact that venture capital worth at least $100 million was raised by new ventures in 2017 alone. Hence, with investors (with smart ideas) directly contributing to the mushrooming of new startups in India, experts believe that the time is now ripe to look at propelling the Smart Indian Cities mission which were brought to the forefront by Indian Prime Minister Narendra Modi nearly three years ago.
Investor Speak – Why investing in smart city solutions is the in-thing this year (and afterward)?
Entrepreneur India spoke to multiple VCs and angel investors who echoed a common thought which is to back startups working on smart sustainable models that could actually give rise to the first-ever set of smart cities sooner or later.
"My focus is to further ventures that research smart technology and work towards building models derived from new-age technical innovations," adds Mathews Abraham who is a Bengaluru-based angel investor with a portfolio of investments across a multitude of healthcare-tech startups in India.
Mathews believes that smart healthcare is an essential element within smart cities; he also envisions the aspect of the marginalized population obtaining super-speciality care with just a click of a button right from the comfort of their homes, at costs a fraction of the current scheme of things.
"I pumped-in INR 2 crores to a very early-stage startup whose model was to detect lifestyle diseases, through Artificial Intelligence and Machine Learning. This results in effective profiling of patients even before the actual treatment starts thereby resulting in accurate diagnosis," adds Abraham.
Apart from healtchare, there is also the concept of smart traffic management which technologists believe is desperately the need of the hour within all Indian metros.
Even investors seem to be in synchronization with the above. "We actively look at collaborating with startups that could actually deploy sensor-oriented models driven by AI and ML to manage peak hour traffic in metro cities," adds Jitendra Gupta who along with a group of friends invests independently in ventures working on developing sensor-based models.
Going by the latest investment trends, it seems that the stage is set for teh first set of Indian smart cities to surface even earlier than expected. At this juncture, it is worth noting that not too long ago, Mukesh Ambani-led Reliance Industries Limited (RIL) inked MoUs worth INR 60,000 crores with global technology giants, in a bid to develop smart solutions for existing societal problems through data-driven models harnessing disruptive next-gen technology.
With next-gen disruptive models, PM Modi's smart cities initiative would get the much required shot-in-the-arm considering the fact that both data and connectivity play a key role in making lives of people (within these cities) easy.
What do the numbers say?
Consider this, Bollywood actor Aamir Khan turned angel investor and invested $300,000 in 2017 in an online furniture rental e-tailer called Furlenco. The online furniture sector received nearly $1 billion in 2016 and 2017 combined. Also, startups such as Pepperfry, Livspace, and Furlenco, with a host of others came to the fore.
Sectors viz agri-tech that is viewed by both technologists and investors as having the maximum potential to be the next-gen drivers of smart change with investments worth more than $20 million being made on startups working on developing smart solutions for problems plaguing Indian agriculture, the scope for smart investments is also in abundance.
"This led to a new trend even amongst the investors who were really excited about getting researchers to come out with models that could do more than to ape the west," adds Srikanth Rao – a Bengaluru-based investment advisor.
"Farmers of tomorrow will know in advance what to sow, when to irrigate, what nutrient and where it is needed, when to harvest, where to sell and at what price," adds Saurabh Kumar who is Co-Founder at Maharashtra-based Agricx which is an agritech startup.
Agricx recently raised $500,000 in a seed funding round led by Ankur Capital.
As far as other sectors are concerned, startups raised investments of nearly $11.5 billion is 95 deals over the last year alone.
"India is now the preferred destination for VC funding as the country offers maximum opportunity to develop smart city solutions, from the level of individual sectors," states US-based investment analyst Ashwin Joshi.
"With billions of dollars in investments and excellent governmental co-ordination, the smart cities mission and the associated research is seemingly progressing well," believes Joshi.
Factoring a positive trend in 2018
With investors having belief in creating societal impacts, it is now time for this sector to take the initiative with regard to creating ventures that work at developing exactly smart solutions for smart cities and villages. We do not require a million startups, but what we require is research to take place in-house even with handful new ventures eager to make a smart societal difference.