India - A Startups Nation - TV Mohandas Pai | 3one4 Capital Transforming India through Digital India
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India - A
Startups Nation
Transforming India through Digital India
TV Mohandas Pai | 3one4 Capital
@TVMohandasPai | @3one4Capital
Digitization has transformed the world Source: We Are Social TV Mohandas Pai © 3one4 Capital
The early-movers now dominate the market
Apple
$2024B
2021
Microsoft
$1752B
Amazon
$1534B
Alphabet
$1374B
Facebook
$794B
Tencent
$748B
Alibaba
$617B
Tesla
$615B
Berkshire Samsung
Hathaway $482B
$577B Mkt. Val.($bn) as of Feb,2021
Source: a16z, Visual Capitalist
The New Normal – Global Tech Conglomerates
Tech companies dominate globally and will continue to accrete disproportionate control over new value creation
AUTONOMOUS
ASSISSTANT
PERSONAL
CARDS
CREDIT
CARS
PERSONALIZED
AUTOMATION
HEALTHCARE
GROCERY
HOME
COMMUNICATION
MUSIC
SECURITY
HOME
TELE-
Tech-forward businesses are now
Expansionist Monopolies
New monopolies and $1T companies will be built upon inalienable data
advantages.
Digitisation is transforming India too Source: We Are Social TV Mohandas Pai © 3one4 Capital
India Internet on a high growth trajectory
Cost of data – one of the lowest in the world, rapid increase in wireless broadband subscribers and subsequently increased data usage
Cost of Data in India is one of the lowest in Every second person in India has Internet
the world
Wireless broadband subscribers (3G+4G) in India
(Mn)
Data Price per GB (US$)
ars
800 5x in 5 ye 654
8 545
600
395
400 258
200 133
0
3.9 2016 2017 2018 2019 2020
1.4 Data usage per month per user (GB)
0.6 0.6 1 20
0.2 0.5
14.6
15 years
17x in 5 10.8
a
K
SA
n
ia
zil
sia
ia
10
n
pa
U
d
s
6.4
a
hi
e
us
U
In
Br
Ja
on
C
R
5
d
In
0.8 1.3
0
2016 2017 2018 2019 2020
Source: Goldman Sachs India Internet Report TV Mohandas Pai © 3one4 Capital
How does India fare against emerging and developed nations?
‘India Internet’ on a high growth trajectory
India shows high appetite for digital Ecommerce penetration in India is
consumption across verticals expected to be faster than
developed nations such as USA
China India Indonesia USA
Internet Users 855 Mn 688 Mn 175 Mn 288 Mn
Daily time spent on
media
5h 50m 6h 30m 7h 59m 6h 42m
Internet
2h 12m 2h 24m 3h 26m 2h 03m
Social Media
1h 31m 1h 53m 1h 30m 1h 35m
Music Streaming
1h 24m 1h 21m 1h 23m 1h 09m
Games
Digital Ride Hailing 459 Mn 174 Mn 22Mn 66Mn
Smart home
34 Mn 10 Mn 1 Mn 35 Mn
households
Digital payment user
49% 4% 11% 77%
penetration
India now accounts for 9% of global app downloads
Source: Goldman Sachs India Internet Report TV Mohandas Pai © 3one4 Capital
Unprecedented rise in digital spending across categories
Covid accelerated digital Reset
Rise in first time online shoppers Increase in online spends among
existing online shoppers
1.43
1.18 49%
1.1
1.04
32% 32%
25%
Staples Apparel Mobile Order-in Staples Apparel Mobile Order-in
Current users indexed to pre-covid users % consumers who increased online spends during COVID
Source: BCG Covid 19 Consumer Sentiment Survey TV Mohandas Pai © 3one4 Capital
Consumer led digital leap
Increased app usage contributing to significant opportunities for internet companies
Increased app usage… … India Internet’s $180Bn Opportunity
Unique visitors across verticals (Mn)
Youtube 388
138
Amazon 269
71
Paytm 205
73
Zomato 71
8
Ola cabs 38
17
Makemytrip 20
16
Bigbasket 29
3
0 100 200 300 400 500
2020 2017
Source: Goldman Sachs India Internet Report TV Mohandas Pai © 3one4 Capital“ The Startup Ecosystem will help
create a USD 10 Trillion
economy in India ”
TV Mohandas Pai © 3one4 CapitalIndian Startup
Ecosystem
3rd 55,000+ USD 315Bn
largest startup startups Value Created
ecosystem in the World
Source: 3one4 Capital Estimates, Yourstory, Inc42, Tracxn TV Mohandas Pai © 3one4 CapitalNew flywheel ramping up
FY 2021 (pr)
USD 194 Bn revenue
IT Services
USD 150 Bn exports
4.5 Mn People Employed
1989 2015 2025
IT Services took off Startups take off What lies in store
2025
Startups
Projections 100,000 Employ US$ 100Bn #2 150
Startups 3.25 Mn to be invested in after US Unicorns
2021-25
Source: IBEF, Nasscom, 256 Network Report TV Mohandas Pai © 3one4 CapitalStartups at a glance
Startups have raised
USD 70Bn from 2014-20
67% Delhi
26%
% deals per city
of all active
250+ Accelerators & startups
are concentrated in
Incubators Bengaluru, Mumbai
and Delhi-NCR
Mumbai Hyderabad
500+ Institutional Investors 20% 3%
Bengaluru
Bengaluru saw 45% 36% Chennai
2000+ Active Investors of the total deal value
4%
between 2017-20
700+ Acquisitions
Startups raised USD 11.5Bn across 924 deals in 2020
amidst a Covid-impacted year
Source: Yourstory, Inc42, 3one4 Capital TV Mohandas Pai © 3one4 CapitalIndia’s
58* unicorns
have created
Un
n+
ico
B
$5
rns
180Bn in value
There will be So
on
150+ unicorns
ico
rn
s
in India by 2025
Source: 3one4 Capital, Tracxn | *2 Unicorns are now listed TV Mohandas Pai © 3one4 CapitalIndians are creating Unicorns Globally
4.2M 67
US Unicorns with
Indians in Indian-origin
USA founders*
Notable US startups with Indian origin founders
Source(s): 256 Network Family Office ReportValue Creation at an unprecedented pace Source: 3one4 Capital, Tracxn TV Mohandas Pai © 3one4 Capital
Value Creation at an unprecedented pace
In 1H of 2021, 16 new startups have
emerged as Unicorns already,
more than in 2020
Annual Unicorns Created in India
16
12
11
8
3
2 2 2 2
1 1
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 May-21
Source: ET, 3one4 Capital TV Mohandas Pai © 3one4 Capital3x Valuation Growth by 2025
Value created by Indian Startups
Startups,
$100B
Minicorns,
$132.6 B
Startups,
$50.0 B
Soonicorns, ~$1Tn
$114.2 B
Minicorns,
$42.3 B
~$315B Unicorns,
Unicorns,
$621.9 B
$180 B
Soonicorns,
$41.3 B
2021 2025
Source: 3one4 Capital Estimates, Tracxn, Inc42 TV Mohandas Pai © 3one4 CapitalEnterprise
Tech
16,000+ startups
~35% of all active
startups in India
608 deals
$5.4Bn Funding
(2014-2020)
Source: Inc42 – Indian Startup Funding Report TV Mohandas Pai © 3one4 CapitalTop New Age
Enterprise Tech
Companies
TV Mohandas Pai © 3one4 CapitalDeepTech
~28% of all deeptech
startups have been funded
11% is the industry average
700+ startups
$0.5Bn Funding
(2014-2018)
Source: Inc42 – Indian Startup Funding Report TV Mohandas Pai © 3one4 CapitalTop New Age
DeepTech
Companies
TV Mohandas Pai © 3one4 CapitalIndia growing as a deep-tech hub
950+ AI 480+ IOT 80+ AR/VR 30+ Robotics
startups startups startups startups
Personalises IoT based AR based ed- Robot enabled
content on wearable tech player logistics
smartphone lock healthcare for kids solutions
screens monitoring device
Personalised Contactless health VR powered Service robots
financial solutions tracker and at-home entertainment for banks, malls,
company step-down ICU events
Source(s): 256 Network Family Office ReportTech solutions are digitally-upskilling
millions of employees
Delivery fleet OlaCabs Meesho has Bringing jobs
Zomato and Generating enabled 10 million beyond metro cities:
Swiggy employ livelihoods for entrepreneurs, 150+ funded start-
over 300K-500K 1.5M drivers mostly women, to ups, are based out
delivery across 250 cities create their own of emerging start-up
executives professional hubs like
between them identity and grow Ahmedabad, Jaipur,
their businesses Kolkata
Source(s): 256 Network Family Office ReportMost Active Venture Capital Investors Source: Yourstory TV Mohandas Pai © 3one4 Capital
We will go from data poor to data
rich nation by 2025!
Cashless, Paperless & Presence-less
Service Delivery
Social
Commerce
Machine
Payment Intelligence &
Automation
Paperless
Process
Digital
Identity
TV Mohandas Pai © 3one4 Capitalleap in DATA: The Global Covid Fast Forward Source: Nielsen TV Mohandas Pai © 3one4 Capital
Steady Transition to a No-Cash future
2.53 Bn
Monthly UPI
transactions volume
US$ 67Bn
Monthly UPI
transaction value
Source: Bain, Finshots, UPI data as of May 2021Full Stack Digital Banking Services by
Neo Banks is the Future
Top Players Traditional Banks NBFCs Neo Banks
Diversified Housing Finance
Gold Loan
2010
Consumer – SME & Vehicle
Diversified Housing Finance For SME For
Consumer
2020 Gold Loan Consumer – SME &
Vehicle
TV Mohandas Pai © 3one4 CapitalContent consumption explodes through Covid19 Source: We Are Social
Content consumption explodes through Covid19
Rise of Jio Consumption proliferation
2021 Data Consumption per Subscriber was
13.7 GB per month with 325M Subscribers
2021 Data Consumption per Subscriber was
16.4 GB per month with 336M Subscribers
100,000,000 96,184,656
Source: Publicis, Vidooly, Company Annual Reports, LivemintOnline Gaming: Social distancing and lockdowns
transitioning sporting to the digital realm
Market size (FY20) Growth rate (FY20-24) Funding (2020)
~US$ 1.6B 30-35% ~US$ 400M
Real money games – E-sports
Real money games - Others Casual games
Fantasy sports & Streaming
Players
• Getting back on track à Sporting • More time available à higher • Social distancing à adoption • Disruption of outdoor sports à
activities were cancelled during participation à more organic of social games increase in e-sports
COVID, but traction is building fast downloads viewership
• User growth was slightly
COVID-19 as sporting events (cricket) resume
• Focus on user engagement softened by lower ad revenues • Social distancing à shift from
impact under bubbles
and retention à a wider physical to virtual events and
• Introduction of new games to
• Pivotal role in fan engagement product offering for varying competitions
cater to increased demand
when stadiums remain in full/partial consumer tastes
• Time spent by each user
lockdown
increased by 21% to 191
minutes
Source: 256 Network & Praxis Family Office ReportMore hours streamed watching esports
than Youtube & Facebook combined
Global India
India’s leading home-grown
gaming streaming app
Source: Business Of Apps, Data for 2020 TV Mohandas Pai © 3one4 CapitalEdtech: Indian edtechs fundamentally altered
education delivery in India
Market size (FY20) Growth rate (FY20-24) Funding (2020)
~US$ 80B 50-55% ~US$ 2.2B
Supplementary Out of school / extra- Certification & training Digital education tools
Test preparation
education & tutoring curricular platforms and enablers
Players
• School closures à increase • Physical to digital shift • Nascent stage • Job uncertainty + time • Acute need for online
in user adoption with more preparation • Increased emphasis on availability à increased enablers to tackle digital
• Partnerships with schools times due to exam STEM in National demand for upskilling learning due to shutting
COVID-19 à higher B2B growth delaysà increased Education Policy to • More organic reach, down of physical
customer acquisition enable growth referrals, repeat usage facilities
impact • Market leaders to benefit
the most à trust + • High stakes à content • Competition for student’s à lower CAC • Online enablers to remain
content variety quality key USP time à Surge in adoption • Increase in # customers important post Covid due
• Focus on vernacular to continue over a long period to behavioral changes in
• Limited online schooling
modules users
hours à increased user
engagement time
Source: 256 Network & Praxis Family Office ReportHealth-tech: Growing need for deeper
healthcare infrastructure
Market size (FY20) Growth rate (FY20-24) Funding (2020)
~US$ 1.6B 30-40% ~US$ 410M
E-pharmacy Telemedicine & scheduling Diagnostics and care Health and fitness
Players
• Continued operations amidst • Fear of getting infected in • Increased demand for at- • Fear of illness à better health
lockdowns hospitals à People started home service both for management
• Fear à panic buying + PPE demand using telemedicine apps to mandatory Covid testing for • Change in business models
COVID-19 avoid hospital trips travel and other outpatient
• Strengthening supply chain à àCurefit shifted focus from
impact • 500% increase in online doctor diagnostics outdoor to indoor fitness, started
increased hiring
• 8.8M were using e-pharmacy consultations in May 2020 from • New offerings à faster monetizing free content
services during lockdown, 2.5x March 2020, with 80% users testing & approvals for • Customer interest à
growth from pre-COVID levels experiencing it for the first time essential services Consumers started taking their
health more seriously
Source: 256 Network & Praxis Family Office ReportNumber of years to 50Mn users
Aarogya Setu becomes world's fastest
app to reach 50M downloads.
Now at +110M users.
13 days
Source: Visual Capitalist TV Mohandas Pai © 3one4 CapitalDevelopment of a Bharat Health Stack to serve as an open collaborative platform
E-groceries: Verticalized brands meeting
increasing quality and variety demands
Market size (FY20) Growth rate (FY20-24) Funding (2020)
~US$ 3.2B 40-50% ~US$ 415M
B2C - Horizontals B2C – Verticals B2B
Players
• Focus on procurement of essential SKUs in • Surge in demand à high digital adoption • Surge in demand à higher ticket value
the initial times • Ensure seamless operations à hiring of purchases by kirana shops
COVID-19 • Accessibility and convenience for the delivery partners • Expansion of services across regions to
impact consumers in early days à increased time • Partnerships à strengthen supply chain increase coverage
slots for deliveries operations • Focus on procurement of goods à more
• Surge in demand à high digital adoption alliances with sellers
• Increase in # tie-ups with local kiranas
Source: 256 Network & Praxis Family Office ReporteGrocery category is doing brisk
business during COVID
400K JioMart has the capability to become an
Orders per day in Aug 2020 integrated retail platform by including
other products and services under its
umbrella
Source: RedSeer, News ReportsClean mobility options are now a reality in
India, incumbents see value in partnerships
Machine-enhanced maps of urban clusters and hyper-
local commute optimizes deployment & utilizationThank You TV Mohandas Pai | 3one4 Capital @TVMohandasPai | @3one4Capital
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