Mumbai: Chinese investors like Alibaba and Ten Cent have made inroads into the Indian startup space and have invested upwards of $3-4 billion in the new age IT sector firms alone.
Tej Kapoor of Fosun Kinzon Capital with multiple funds, said in the one and half years that Chinese firms have been here they have made three major investments in travel portal Ixigo, Make my Trip and Forsun, who with Washington-based Carlyle raised $130 million, has invested equity in Delhivery, the largest third-party supply chain services company.
However, the Chinese investors in India are here to both share the knowledge about scaling up businesses and to understand India’s market in various verticals.
Mr Kapoor, whose fund has invested upwards of $5 million said India is 10 years behind China in infrastructure, GDP etc, and the Chinese model of growth is getting established in India like in PayTM in which Ali Baba has invested.
China sticks to its core competencies in growth area they understand deeply and implement them here. So they have trading funds presently and the pure financial funds have yet to come, he says.
Talking about the Chinese interests Aloke Bajpai, co-founder, Ixigo, the fastest growing online travel app with more than 10 million monthly active users, said senior Chinese executives of Forsun flew down and we pitched through interpreters.
Sequoia was an earlier investor and Forsun moved in quickly. We are the first growth company they invested in. They are looking at space with a large market size and the online travel market size is $15 billion gross and projected to be $20 billion in three years. It is the largest market place model.
“We learnt from them how to monetise the large data available on the behaviour of mobile users. The US and Europe are not mobile savvy as the Chinese,” he said.
Shubh Bansal, co-founder, Truebil, India’s only curated, authentic and verified marketplace for pre-owned cars successfully concluded its follow-on Series A funding round with an investment of $3 million from China’s leading Venture Capital Fund Shunwei Capital in January this year.
He said the Chinese investors are scouting for companies which are in the early stage of growth in India but with a potential to grow so that they can capture the market.
There is a lot in common between the Indian and Chinese consumers as both are price conscious and conservative. India has been a battle ground for multinational companies since it is an open economy and China sees advantage through investments in Indian firms.
China which has the 17th largest in Foreign Direct Investment (FDI) into India, up from the 28th in 2014 and 35th in 2011, according to India’s official ranking of FDI inflows.
There has been a gradual shift from strategic to pure financial and returns-focused investments from Chinese firms. Chinese entrepreneurs are ahead of their Indian counterparts and therefore Indian entrepreneurs have an opportunity to leverage their experiences in a big way.
Indian founders with big international dreams are banking on Chinese investors for both learning and growth. For Chinese investors, Indian startups present a range of opportunities with a burgeoning startup culture, particularly since their own markets are saturated and their economy is experiencing slow growth.
