Why Global Investors are Looking to Invest in Indian Startups Investment in India is being driven by a confluence of factors, including educated young talent, cheap data availability, digital infrastructure such as the Unified Payment Interface (UPI) and Aadhar-based KYC, and increased financial and digital awareness.

The Indian tech startup scene has experienced exponential development over the last ten years, expanding by up to 15 times, according to the Nasscom-Zinnov tech startup survey of 2023. With the 950+ new digital startups that were founded in 2023 alone, there have been an astounding 31,000 during the previous ten years. With over USD 70 billion in capital raised so far since 2019, Indian tech startups are ranked third in the world's startup ecosystem.

Various investors gathered to express their perspectives during a panel discussion titled "Indian startups: A gold mine for global investors?" at the Tech and Innovation Summit in Bangalore, which was hosted by BIZ Experiences Media.

According to Shahan Sud, Senior Investment Manager, JAFCO Investment (Asia Pacific), over the last 24 months, we have seen a lot of investors setting up shop here, wanting to invest, and understanding the market.

"India's GDP growth rate over the last three quarters, from Q1 to Q3 FY24, has been averaging around eight percent; this quarter will be around a little over seven percent from a growth rate perspective. These are indicators that are allowing investors to not only put in capital but also grow their teams," says Shahan.

The World Investment Report 2023 states that India secures the third-highest amount of foreign investment in 2021–2022 and emerges as an FDI (foreign direct investment) powerhouse. Over the course of the last 10 years (April 2014–December 2023), USD 647.96 billion in foreign direct investment (FDI) inflows were received. More than 170 nations have contributed FDI to 33 UTs, states, and 63 different sectors of the economy.

Aya Zaghnin, Investor and Shark, Shark Tank Morocco, lists a number of factors, including a sizable consumer market and ample corporate backing support, that make investing in India appealing to foreign investors.

The rising major economy, demographic advantage, digital public infrastructure, and China plus one strategy are the main reasons why the world is looking at India, according to Surya Mantha, Managing Partner of Capria Ventures.

Startups and building businesses are aspirations in India, as noted by Vatsal Kanakiya, CEO of 100X.VC. That is phenomenal because that means, as a nation, we're going to be capitalist. We believe in creating value and have goals of constructing space-tech companies.

Scalability of Indian startups overseas:

Over the past few years, Aya has noticed that, like any other country, India has gone through several economic cycles. "However, we think that India has managed to emerge from each cycle in a unique way, which is why we view India as an emerging continent. Already, I've seen a number of Indian startups with UAE headquarters," she states.

Vatsal touches on the issues that Indian businesses confront when scaling into international markets. "While we're globalised as a nation, our BIZ Experiences culture is not yet globalised. There are still pockets. New York has a different culture. London has a different culture. Because there's no standardisation, our founders find it tough to raise money outside without really understanding that culture.

"And even if they do, getting access is still an issue if they want to raise money from foreign investors. How do you reach out and show legitimacy? Today, for foreign investors, the smartest Indians are IIT and IIM. So even if you're a non-IIT founder, you're not going to be able to signal to an American investor," Vatsal shares.

However, Surya adds that if you build something that has scaled up in India, you can easily take it to other geographic areas. "Nothing is easy in life. There is potential for taking it to other geographies, which is very much there," he highlights.