Startup Saturday: Bye ’19, looking forward to a promising future
What will the New Year bring for the startup community? 2019 saw the addition of 1,300 new startups, according to National Association of Software and Services Companies (Nasscom). India added seven unicorns in 2019 to become the third highest country in the world with companies having a valuation of more than a billion USD.
Will 2020 up the game? Or not? Will it flat line? What does the New Year look like for the entrepreneurs? We speak to a few gurus and startup founders who share their vision for 2020.
Startups can find opportunity to make auto sector more efficient
Pradeep Bhargava, president, MCCIA
According to me, the role of startups in our economy is to show how to do things better, how to add more value to products, services. But the main chunk of employment, of goods comes from our core – the manufacturing industry.
I’ll cite the example of auto industry. They have unused capacity and with demand slipping they are focusing on becoming more efficient by adapting newer technologies like IoT (internet of things). It is in such instances that startups can find opportunity to make industry more efficient by use of technology and other ideas.
The other area I see as untapped is our exports. We import goods worth $70 billion (Rs 5 lakh crore) from China and export just $15 billion (Rs 1 lakh crore). What does that say? There is demand. This demand may be for agarbattis (incense sticks), Ganpati idols and such items. But the demand exists. So why can’t we take up that challenge and start producing such goods? Yes it may cost a bit more given China’s manufacturing prowess, however, is it not possible to replace some of that humungous import bill with some smart manufacturing here in India? Sure high-tech equipment like telecom may still be required to be imported, but surely we can replace demand for some Chinese goods? Startups need to look at such items where demand can be replaced.
Demand in the economy will get a push if the government invests in infra projects that will lead to demand for cement, mining equipment, but also that will trickle down to smaller goods and services that can help make the infra industry more efficient. Startups with their agility can surely do that.
The IT and ITes industry is mostly export oriented, however their share in the global economy is still small – the US buys about 5% of this requirement from us. Our IT industry still has strength, but in these times cost arbitrage is no longer going to be valid. If you want to compete in the global markets you need to add value. The industry is adjusting to this new reality. Startups can make a difference in Ed tech, Fin Tech, healthcare and agri tech. However, I see their role very limited in clean technologies because they lack the bandwidth to make a serious dent to the environment. Startups can help people with say garbage management solutions, but the bigger push to reduction in carbon footprint will come from a cement plant or a power plant.
Entrepreneurs should tap huge opportunities in tourism sector
Anand Deshpande, CMD, Persistent Systems
To understand what the next year will look like for startups, I think you should look at the numbers. A large section of our population is in the middle earning between Rs 20,000 and Rs 1,00,000 per month. The number is roughly about 175 million households that are in the middle of the pyramid. At this level people’s lives change. Instead of just being able to take care of illnesses, they have the money to invest in good health. Add to that the fact that everyone now has a bank account. And a large section has access to smartphones and the internet. Catering to the healthcare needs of this segment will be big. Of course health is important for all and for the 500 million people at the lower end of the pyramid the govenment has Ayushman Bharat. There are also opportunities in this sector from the West where innovations in genetic sequencing is happening, but such opportunities are a few years away as of now.
There are some other sectors too that are laden heavy with business opportunities like fintech and healthcare given the demographic pattern. But tourism, food and logistics will also grow. With the government focusing on developing more highways, ports as well as adding technologies like the FASTag, logistics will get a boost. People will have opportunities to create better tracking solutions around this.
To me, tourism is a hot sector. It is completely underleveraged. It presents huge opportunities if an entrepreneur wants to explore it. Food and agriculture always remain important and has a lot of space for improvements in quality and delivery.
Society is accepting new untried firms
Vijay Talele, CEO, Bhau Institute
Technology will rule the roost next year and in the near future. I think there will be more and more startups venturing into AI, IoT, deep learning, machine learning and robotics. All these companies will require data to build better algorithms and I think they will develop better and more mature products.
Fintech has so far been the darling of the industry and e commerce will continue to have focused growth, but I expect healthcare and agri techs too to grow in 2020. One can expect to see more tech- related products in robotics, autonomous vehicles, e-vehicles, energy as well.
The money scenario will be pretty much like it was in 2019, but with unicorns emerging from the startup community I guess investors will be more predisposed to startups as an asset class. Of course availability of funds will depend on the stage of the startup.
With regards to government push to startups, the recent report on Mudra loans will put a dampner on future availability of funds. I expect some stringent norms for future lending under this scheme. However, I think the recent policy of the government to allow companies to extend their CSR (corporate social responsibility) funds to startups is a good thing. Overall I think things look good for startups. I am an optimist and I think society has opened up to accepting products from new untried companies so that has given more exposure to startups.
We learnt a lot from our investments
Vaibhav Domkundwar, Better Capital
To peep into the future, I will first look at the past year. We learnt a lot from our investments in 49 companies across various stages.
• Founders raised less capital than they needed and raising top up rounds was hard despite making strong progress on the core product. Bridge rounds are the hardest to raise.
• We saw a lot of concept deals in 2019 wherein founders raised decent-sized seed rounds from VCs — on nothing more than a deck.
• Founders failed at estimating the traction and metrics they would need to raise their next round of capital.
• SaaS (software as a service) and software founders re-learned the same lesson that I’ve been repeating for years — there is no point in spending too much time selling to Indian or Asian customers if your ultimate total addressable market (TAM) lies in the US and other western markets.
• Traction took longer in multiple cases. My advice to founders is to lay down strict timelines for traction and growth and hold yourself accountable for delays. This will help you see what may not be working sooner than later
Though the New Year is predicted to be gloomy, I have seen that these predictions are as accurate or inaccurate as the weather prediction. I also believe that pre-seed and seed stages will be less affected by the broad sentiment as compared to Series A, B and beyond. So I expect to continue to invest in the best teams as early as we can. We believe fintech will see a brand new set of entrants who will either own brand & distribution or infra. We like both. We hope to find unique companies in SaaS and software that target global markets. We will continue to find “community-first” plays in ecommerce, software, fintech and beyond.
Goal is to make Pune cervical cancer-free
Nickhil Jakatdar, CEO, Genepath Dianostics a genetics based diagnostic lab
Greater awareness amongst doctors and consumers translated into growth for us in 2019. We processed as many samples this past year as the combined 7 years before that. That said, 2020 promises to accelerate the exponential rate of growth of 2019 as we focus more deeply on distribution partnerships with pathology labs, hospital chains, and doctors as well as NGO partners and corporates. Increased consumer awareness around prevention along with a more concerted push by the government will result in an uptick in screening around women’s health as well as for new-borns. Our goal is to make Pune cervical cancer-free, followed by Maharashtra and eventually India; a goal that only countries like Denmark and Australia are approaching. This will require the government, NGOs and corporates to all come together through a pooling of resources and a clear assignment of roles and responsibilities. This understanding and commitment to the cause will be a great New Year’s gift for us.
Nikhil Gandhi, co founder Yoryo Technologies ( provides tech enabled logistics management solutions)
2019 was exciting for us as we took big steps forward towards realizing our overall vision of digitizing logistics. We acquired our first customer in January, received angel funding in April, Graduated from startup accelerator program with TIE Pune,
built enterprise edition product by July. We have had several successful pilots & contract sign offs with FMCG companies, industrial manufacturers
and multi chain retail stores. We almost doubled our team size as compared to 2018 and also shifted to new office in Pune, opened new office in Hyderabad.
We closed 2019 on high note, with signing off contract with global FMCG enterprise.
In 2020 we expect to grow from early stage to growth ready startup. With on-boarding of several more enterprise customers, existing product lines will be more mature, which eventually will reduce sales cycles. We aim to expand to key global markets such as APAC, Middle East and North America. For that we must build global ready product in 2020. Our goal is to achieve ~5X growth, for which, we are looking to raise seed/VC funding in 2020.
Next year closing and signing off contract with one more key enterprise customer in pipeline, would be major win for us.
Ankit Tanna, founder True in, an AI powered visitor management system
2019 has been very eventful year for us. We focused on building our Sales and Marketing capabilities. When founders coming from a technology background, there is a steep learning curve in getting early sales engine run. Now, we have 80+ B2B enterprise customers including some big brands like Schindler, Bajaj, Bristlecone and more who have upgraded to Truein. We are strong 15 people team. Have built clear differentiator (USP) in the product using AI and computer vision technology. Truein enables ID scanning and face recognition for Visitors. We raised angel round of funding early this year. Overall it has been an action-packed year.
In 2020 we look forward to explore the international market and continue working on product driven growth strategy. We have an AI-powered card scanning technology which scans Govt ID and Business cards, we now plan to extend that for users from other countries. We are also looking to raise the next round of funding in the first half of 2020. The best gift we could get in the New Year is to onboard the 100th customer of Truein!
Many are investing in medical sector
Anuya Nisal, founder BiolMed ( a biomedical products company that develops bioabsorbable implants)
For BiolMed, 2019 has been a great year. Our efforts and innovative technology was recognised through various awards and grant approvals including a SBIRI grant from DBT-BIRAC and a BAJAJ CSR grant. We were also winners of the IIGP 2.0 competition, a TIE BIRAC WiNER awardee and we also won a poster prize at IKMC 2019. Our flagship product Serioss, a bone void filler, has been demonstrated to outperform current leading global products in animal as well as lab studies. In 2020, we look forward to human investigations and partnering with clinical researchers. We also intend to grow our team in 2020 with more junior as well as CXO level, motivated and passionate, team players.
Overall 2020 should be a good year for the Medtech industry in general. Over the years, we have seen more and more investors being inclined towards investing in the space. Hope to see that happen more in 2020. 2020 should also see a lot more products clearing the regulatory pathway and being launched in the market. This is due to the fact that the medical devices rule has been in force for a couple of years now and also more and more devices being notified/regulated. There has also been a lot of forums provided by government institutes and incubators facilitating a lot of interaction between start-up founders and regulators. This has given more clarity about the regulatory pathway for entrepreneurs like us.
Piyush Khaitan, managing director, NeoGrowth Credit Pvt Ltd (A technology enabled lending business)
2019 has been an eventful year for us. We saw a steady growth with a 25% increase in income over the previous year. Our tech & touch model along with our customer centric business philosophy has helped us emerge as market leaders touching customers across all industry segments. We have remained focused on maintaining deep local connect with market and customers.
We expect to see a lot of action in New Year with the fintech lending space with firming up and implementation of measures on digital KYC, account aggregation, public credit registry and real-time bureau updation. With a slew of measures promoting cashless economy along with increasing governance frameworks in place, the dynamics of the banking and fintech industry promises to be exciting for all stakeholders.