India strategy for the world's highest-valued startups
A unicorn is a privately held, venture capital-backed startup with at least a $1 BN valuation. As per CB Insights, the world has 701 unicorns with a combined valuation of $2,245 BN in April 2021.
Some companies like Bytedance and Stripe have stayed private despite having a market value bigger than most listed companies. Thus they remain a unicorn startup as per the definition even though some might question the logic.
Startups start by solving local problems and then expand to neighbouring countries. Most of them (99%) stay confined to their home geographies. Most successful business models have local players solving local issues. Deezer, a French music app, is a good example. It has not entered India because India has several local music streaming apps.
But the most successful startups become global. Think Uber, Salesforce, and Spotify. Although none of them is a startup now after their IPO, they started expanding outside their home markets before they became public companies. So globalisation does happen but few startups, especially the biggest ones, achieve it. These big startups either acquire local competitors or compete with them when they enter a new market. Uber competing against Ola in India is a good case study.
So out of this list of the 12 biggest global startups, how many are present in India, and why have some chosen to stay away from the Indian market? Let's analyse them individually.
Bytedance operated one of the most popular social media apps, TikTok, in India before GOI banned Chinese companies.
Stripe, the online payment behemoth, has already launched its operations in India, although its footprint is still small.
I don't think SpaceX has any India plans. I doubt the Indian government or private sector will use SpaceX over ISRO for launching satellites or sending space missions.
DiDi operates ride-hailing taxi services across Asia. But Ola and Uber dominate the Indian market, and DiDi has a non-compete agreement with Ola. So no India plans for DiDi.
Next on the list is Instacart, a US grocery delivery and pickup provider. Given the plethora of Indian last-mile delivery (LMD) startups and the high-burn nature of the business, I doubt we will see Instacart in India. And to be honest, we don't need another LMD company. We have plenty.
UiPath, a robotics automation platform, is already present in India and counts Tech Mahindra and Wipro as its customers. It will grow as more Indian companies go down the end-to-end automation and digital transformation route.
Klarna is a Swedish online payments company for retailers. Klarna doesn't serve India, and it will stay away given the competition and bloodbath in the Indian online payments sector.
Epic Games is an American video games developer that owns popular games like Fortnite, Rocket League, and GTA. These games are already quite popular in India. The Indian PC gaming market is growing rapidly, and we can expect Epic Games to focus more on expanding its footprint in India.
Databricks has built a cloud-based tool for processing and transforming massive amounts of data through AI and ML. Like all major enterprise SaaS startups, it is present in India.
Rivian is an American EV manufacturer like Tesla. It is still developing its EVs, and I don't think it has any Indian plans. India might become a huge light commercial EV market, especially in 2 and 3-wheelers, but I doubt we will see big EV trucks, the type that Rivian is developing, in India.
Nubank is a Brazilian NeoBank with a presence all over Latin America. It is quite difficult for foreign banks to enter India, and the Indian fintech sector is also developed with several local champions. So I doubt Nubank will come to India, but we will soon see several homegrown Neobanks.
GoTo was formed by the merger of Gojek – an Indonesian platform for transport, payments, and food delivery and Tokopedia – an Indonesian e-commerce giant. GoTo dominates the Indonesian market in all its businesses, but India has several strong players in all these sectors. Thus, GoTo's India chances are slim.
The biggest startups will start becoming more global with time. Then we will see more global unicorns coming to India and more Indian unicorns expanding outside India.