Increase in B2B Product Startups For Global Markets Highlight Ample Talent and Capital Efficiency
India/US, November 18, 2019. Anand Prasanna, (Managing Partner) and Mohanjit Jolly, (Partner) at Iron Pillar, a mid-stage technology investment firm, jointly launched their inaugural India Tech Trends Report, outlining an expected increase in the number of Tech Unicorns (a unicorn is a privately held start-up company valued at over USD 1 billion) from current 30 to nearly 100 by 2025. The first of its kind report demonstrating disruptive scalability amongst Indian tech start-ups finds that while India generated almost one unicorn per year between 2011 to 2017, the number spiked to 11 in 2018 and 10 thus far in 2019. India currently has 30 tech unicorns, and 21 of them were created in the last two years.
According to Mohanjit Jolly, “Iron Pillar’s Unicorn analysis is a proxy for the depth, breadth and scale of innovation and impact that entrepreneurs are having in India and around the world. India has hit an inflection point in 2019. With a stable government, a young aspiration populus, a humming entrepreneurial ecosystem, institutional investment activity, cash being returned to investors, and 30 (and counting) unicorns pulling the Indian innovation chariot, India is truly shining in 2019”. “Unlike China, Indian entrepreneurs will shine not only in different aspects of the Indian consumer-centric ecosystem, but more importantly, build world class enterprise software and deep technology companies to serve the global markets,” Mohanjit added.
Other top findings of the report include – 43% of the unicorns are in the B2B space (either building products for India or products for the world from India). 50% of the unicorns have been created in E Commerce, Fintech and SAAS segments. However, unicorns are now being created in other segments such as Logistics, Transportation, Food Tech, etc which indicates a growing depth of the Indian tech market. These unicorns have already created USD100 billion+ value with some of them having collectively returned more than USD 20 billion in cash to their investors. Almost a quarter of the Indian Unicorns are building B2B products for the world. Almost 60% of the unicorns took less than 5 years from first funding to unicorn status. More than 75% of them did it within 7.5 years – meaning larger companies are being built faster in India than ever before. Companies building B2B products for the world from India get to unicorn status require, on average, less than 50% of capital than companies building B2C products for India. While there are a lot of upcoming and promising new VCs, 8 early stage VCs dominate as the most prolific unicorn builders and geographically, Bangalore and Delhi house >75% of Indian Unicorns. Last but not
the least, these unicorns are no longer dependent on a handful of late stage investors for funding.
According to Anand Prasanna, “The significant scaling up of Indian technology companies we started seeing from early 2018 is very similar to what we observed in China around a decade ago. It takes a combination of market opportunity, development of technology infrastructure, tech talent and layers of early to late stage capital to make this happen. We see all these elements falling in place in India over the past 24 months. Like US and China which have more than 200 private tech companies each now valued at over $1bn, we see the landscape in India growing very fast in the next decade. We believe that 200 private tech companies built from India, with total value of over $1 trillion, is a likely scenario over the next ten years.
We also believe that almost 50% of the private tech companies built from India will address a global market opportunity. Indian entrepreneurs have already proven the ability to build multiple $10 billion to $100 billion companies from India in the IT services space, for a global customer base. Product companies, especially in SaaS, are scaling fast now with 7 of them achieving Unicorn status. We clearly see this trend accelerating in India with strong growth and unit economics demonstrated by a sizable pipeline of enterprise software companies that have reached $10 million in ARR with significant year on year growth.”
Anand Prasanna, Managing Partner
Before co-founding Iron Pillar, Anand led the Asia office for Morgan Creek in Shanghai, where he had first-hand view of the rising tide of technology companies in China. Prior to Morgan Creek, Anand had investing stints at Squadron Capital, Hong Kong and Sequoia Capital, Bangalore where he backed technology businesses and venture funds in India as well as South East Asia and Australia. Anand worked with McKinsey & Co. India office before starting his investing career. Anand earned a PGDBM at Fore School of Management and a BBA at University of Kerala.
Mohanjit Jolly, Partner
Before co-founding Iron Pillar, Mohanjit served as a Partner at Draper Fisher Jurvetson for 9 years, establishing their India operations, overseeing the India venture portfolio and coordinating business development efforts with Fortune 500 companies for DFJ’s global portfolio. Prior to this, he was a Partner at Garage Technology Ventures, a Silicon Valley seed stage VC firm. His early years in California and Boston saw him help launch ViaSpace, a technology incubator in conjunction with Caltech and JPL and Intel Play, a JV between Mattel and Intel. He also worked at Itek Optical Systems, a manufacturer of high-resolution reconnaissance systems. Mohanjit holds an MBA from The Anderson School at UCLA and a BS & MS, Aeronautics and Astronautics Engineering from MIT.
For Iron Pillar, Sanjna Tulsiani: [email protected]