‘China firms invest $2 bn in Indian startups’

SOME OF THE MAJOR INVESTORS IN THE INDIAN STARTUP ECOSYSTEM IN 2017 INCLUDE ALIBABA, CTRIP AND TENCENT

BEIJING: Chinese companies invested nearly $2 billion in Indian startups in 2017, a sharp increase from previous years and an indication of their inclination to shift to India for its expanding market, cheaper labour and less domestic vulnerability, according to a new report.

“In terms of investments in the Indian startups, Chinese firms have predominantly focused on e-commerce, followed by transportation and fintech (financial technology), with the majority of the biggest deals in the late-stage e-commerce sector,” said the KPMG report.

“Some of the major investors in the Indian startup ecosystem include Alibaba, Ctrip and Tencent,” added the report unveiled at the 2nd Startup India Investment Seminar in Beijing on Monday. Among the key Chinese companies that have invested in Indian startups are Beijing Miteno Communication Technology (Media.net), Alibaba (Paytm), Alibaba with Foxconn Technology and Softbank (Snapdeal), Ctrip (Makemytrip), Tencent (Hike and Practo) and Bytedance (Dailyhunt).

Leading Chinese mobile company Xiaomi “has showcased a significant interest in the Indian startup market in the last couple of years. As of March 2018, the company had invested in 10 startups in the country,” the report said. It was against this backdrop—and with an eye on future collaboration—that 20 Indian startups are in China to make a pitch to Chinese investors to invest in their ventures.

A large number of Chinese venture capitalists sat through presentations by Indian companies that ranged from rental solutions, food delivery and media to e-commerce, home financing and online gaming.

“India has always been an attractive investment destination for China, however from 2015 onwards, the country has witnessed a significant increase in investments from Chinese firms, primarily in startups and technology platforms. In 2017, Indian startups received ₹129 billion ($2 billion) from China, a growth of three times as compared to the previous year,” the KPMG report said. Twelve Indian startups participated in the maiden Startup India Investment Seminar in Beijing last year, and four secured funding from Chinese venture capitalists to the tune of $15 million, said the Indian embassy, which organised the event.

In the current round, seven to eight startups are expected to get a commitment of about $30 million, the embassy said.

Zheng Bin, CEO of ICBC India, one of China’s leading banks, shared its experience in India at the seminar and offered advice on how to invest in the Indian startup ecosystem. He said ICBC India has established a $200 million fund for investing in promising MSMES and ventures.