Ravi is the Chief Executive Officer at T-Hub Hyderabad, an innovation hub. T-Hub currently houses India’s largest tech incubator and leads programs with large corporations like Boeing, Facebook, and United Technologies along with several international institutions. T-Hub is a core part of the Telangana government’s vision to make Hyderabad a global destination for entrepreneurs. In a career spanning over two decades, Ravi has been a product engineer, entrepreneur, investor, mentor, and leader. Ravi has been actively involved in India’s startup ecosystem, helping create startup density in the product space of Bangalore. Besides advising the government of Karnataka, Ravi has also advised other national governments such as Singapore and Malaysia. An engineer from IIT Madras, Ravi also holds an MS and an MBA from the University of Southern California.
In recent times, Indian startups have come to embody the philosophy enshrined in our ancient Upanishads: ‘Vasudhaiva Kutumbakam,’ or ‘the world is one family.’
In a quest to build a ‘global’ enterprise, an increasing number of Indian startups are flocking overseas to expand their business. Homegrown startups that no longer want to be restricted to the domestic market are spreading their wings to scale and seize new opportunities available in foreign markets. Paytm, Zomato, Ola, Oyo, and Byju’s are just some of the marquee names in the startup ecosystem that are looking at tapping global markets for growth. The UK, US, Australia, the Middle East, and Singapore are the preferred destinations by Indian startups to expand operations.
Although there are multiple reasons why international markets seem an attractive proposition for Indian startups, ease of doing business is a key driving factor. Moreover, a new generation of tech startups has embraced disruptive technologies to meet the demands of international markets. Digital technology has enabled startups to transcend geographies, acquire international customers and collaborate with stakeholders who have an astute understanding of the local startup ecosystem.
In a nutshell, today’s Indian startups truly view the world as their oyster.
The rise of India-born global startups
After conquering the domestic market, entrepreneurs who are hungry to expand overseas have embraced a global mindset from the get-go. This trend especially holds true for the SaaS (Software-as-a-Service) ecosystem. The growing popularity of cloud technology adoptions has led to a new generation of startups capitalizing on enterprise software to scale and seize expansion opportunities. According to a recent report, the Indian SaaS market is expected to touch more than $20 billion by 2022.
The COVID-19 pandemic has also revolutionized the SaaS landscape as companies are moving entire applications and services from on-premise legacy systems to the cloud. What’s more, India-born enterprise SaaS behemoths are among the leaders in meeting the increased demand for remote workplace tools such as customer relationship management (CRM), accounting and payroll software, and Management Information Systems (MIS), among others.
For example, amid the pandemic, SaaS leader Zoho Corp’s enterprise collaboration platform saw a dramatic surge in demand from users for its remote collaboration, communication, and productivity applications. The startup that has its origins in Chennai, is now headquartered in Austin, Texas, and serves over 60 million users across 180 geographies that include North America, Europe, Latin America, Middle East, and China.
Other Indian enterprise SaaS players are also finding innovative ways to serve customers, grow organically, and expand operations. Druva, a key player in the SaaS cloud data protection and management space, was founded in Pune and moved base to Silicon Valley in 2012 to reach out to potential customers in the US who at the time were early adopters of cloud technology.
Among consumer SaaS startups, Paytm’s Japanese foray PayPay promotes cashless payment and serves 40 million customers in Japan. Paytm has also established its presence in Canada and views the country as an important market for its overall global growth strategy.
I’m not surprised at the global exploits of India’s homegrown SaaS startups. India’s emergence as an IT hub pegs it at $300-$350 billion revenue mark over the next five years. Indian SaaS startups attract keen investor interest that enables them to swiftly go global and work towards an initial public offering (IPO). The SaaS industry appeals to venture capitalists as the business model is more predictable, reliable, and capital-efficient. Further, the sector has low barriers to entry and is rife with new opportunities for investors and entrepreneurs alike.
Undoubtedly, one of the key attractions of expanding a homegrown startup to a variety of foreign markets is the potential to reach a larger, more technologically advanced market and a diverse customer base. India’s rich tech talent pool has also encouraged other countries to ease their compliance regulations to accommodate entrepreneurs who want to contribute to their country’s innovation ecosystem. The Indian government has also contributed to the growth of global Indian startups. For instance, The India Tech Bridge, an initiative of the Indian government, enables homegrown startups to transition to the US market seamlessly.
Failure to launch
Despite the attractiveness of foreign markets, the grass isn’t always greener on the other side. Indian startups targeting foreign horizons should be prepared to navigate a new landscape and have an astute understanding of the local market and its regulatory environment. They should attain product-market fit in order to scale and leverage the advantages of the local ecosystem.
Hospitality firm OYO Hotels and Homes has had its fair share of struggles in the US where it faced regulatory compliance issues. Likewise, ride-hailing app Ola was banned by London over concerns of jeopardizing passengers’ security by hiring unlicensed drivers.
On the optimistic side, Indian startups that have failed to make a mark overseas have used their setbacks as learnings and forged ahead with a re-strategized approach to conquering foreign markets. Moreover, the pandemic has created lucrative ‘virtual’ opportunities for startups of all stripes to work from remote locations and build a global brand.
India: The new address for foreign startups
Coming to the other part of the story, it’s not just Indian startups that are setting sail overseas. Growth-stage foreign startups, too, are increasingly recognizing the benefits of setting up shop in India. The country’s maturing startup ecosystem offers international startups access to a large customer base and exposure to a burgeoning, lucrative market.
The Indian government offers a collaborative platform for international startups to access and go to market easier through its International Bridges initiative. For instance, the India-Singapore Entrepreneurship Bridge enables ecosystem stakeholders in both countries to leverage their respective resources and opportunities to create and fund scalable startups across industries and foster digital transformation. There are similar platforms for other countries, such as Israel, Finland, Japan, and the UK, among others.
At T-Hub, we have partnered with South Korea, Hiroshima, and Australia to not just handhold international startups making their foray into India but also foster the spirit of open innovation. In my view, a robust startup culture can thrive and sustain only through such dynamic, collaborative partnerships that bring in the best innovation practices of the participating countries.
Tread cautiously in foreign waters
I would offer a word of caution to startups that are preparing for growth in foreign territories. Whether they are Indian startups going abroad or foreign startups launching in India, they should refrain from following the herd mentality to go global just because competitors are doing so.
First, business strategies cannot be ‘quick fixes’ and follow a cookie-cutter model. Efforts should be invested into customizing product and service offerings for different geographies and consumption behaviour patterns. Second, given the global opportunities startups have access to in this digital age, new startups should lay the foundation to scale and cater to diverse international audiences right from their initial days. They should not restrict their offerings to only one country or geographical region. Third, if startups want to truly become global businesses, they should understand the local culture and business environment and forge strategic partnerships with key local players. Fourth, emerging startups on the global map shouldn’t grow at a breakneck speed and expect results overnight. They should build a strong team, ensure world-class product offerings and develop the skills required to survive the long-term challenges in foreign markets.
Most importantly, if a country has to produce truly global startups abroad, businesses shouldn’t hesitate to tap into unique opportunities offered in foreign markets and reach out to stakeholders in the local ecosystem. Only then can they make a true home away from home.