Amid increasing popularity of virtual currencies in various parts of the world, the Reserve Bank of India on Monday said it is open to exploring the possibility of a digital version of fiat currency. Host of private digital currencies, virtual currencies and cryptocurrencies have gained popularity in recent years, though Indian authorities continue to remain sceptical about them.
In India, the regulators and governments have been sceptical about these currencies and are apprehensive about the associated risks. “Nevertheless, the RBI is exploring the possibility as to whether there is a need for a digital version of fiat currency and in case there is, then how to operationalise it,” the RBI said in its booklet on ‘Payment Systems in India — Journey in the Second Decade of the millennium.
Central bank digital currencies is a legal tender and a central bank liability in digital form denominated in a sovereign currency and appearing on the central bank’s balance sheet. It is in the form of electronic currency, which can be converted or exchanged at par with similarly denominated cash and traditional central bank deposits. Innovations are changing the payments space rapidly.
This has made central banks around the world to examine whether they could leverage on technology and issue fiat money in digital form,” the RBI’s booklet said. It further said the RBI has already established a framework to capture the location and business details of commercial bank branches, ATMs and banking correspondents across the country. It is envisaged to extend a similar framework to capture and maintain information about point of sales terminals and other payment system touchpoints, the booklet said. The booklet covers the journey of the Payment and Settlement Systems in India during the second decade of the millennium — from the beginning of 2010 till the end of 2020.The RBI said it captures the transformation of India in the sphere of payment and settlement systems. It describes, inter-alia, the legal and regulatory environment underpinning the digital payments systems, various enablers, payment options available to consumers, extent of adoption during 2010 to 2020, it added.
The Reserve Bank of India had earlier come out with booklets on payment systems in 1998 and 2008. This third booklet in the series is expected to This third booklet in the series is expected to serve as a reference document for those interested in knowing more about payment system developments in the country, the RBI said.
“This booklet is a narrative of how the carefully thought-out steps taken by the RBI have resulted in transforming India into a country riding the crest of a wave in the evolution of digital payments,” said RBI Governor Shaktikanta Das in the ‘Foreword’ of the booklet. While realising that ‘well begun is half done’, Das said the RBI is mindful of the challenges ahead. Various initiatives are underway to realise India’s vision on payment systems.
The RBI seeks to usher in a payment ecosystem that enables safe, quick and affordable digital payments to everyone across the country as well as in cross-border payments and transactions, he added. The factors inhibiting the digital push are connectivity issues, inadequate acceptance infrastructure, lack of familiarity with newer, alternative payment methods, delay in getting complaints resolved and security and privacy concerns.”RBI has acknowledged the same and to address these issues has put in place systems like, consumer awareness programmes, ombudsman schemes, etc,” the booklet said. It further said that such is the development of digital payment in the country that it has started expanding beyond boundaries.Implementation of successful Indian practices in developed countries of Europe and the U.S. is testimony of India being perceived as the leader in payment systems now, said the booklet.
The global startup economy remains large, creating nearly $3 trillion in value, a figure on par with the GDP of a G7 economy.1 Seven out of the top 10 largest com- panies in the world are in technology — the highest concentration of any industry sector among the top global companies — and 2019 saw close to $300 billion in venture capital investments around the world.2
Nonetheless, even at the end of 2019, not all was well. Inclusion remained a fundamental challenge for tech ecosystems, with only 14.1% of founders globally being female, as our Startup Genome research shows.3 Value creation by ecosystems remains concentrated, with about 74% of all value produced being concentrated in the top 10 performing cities globally. Tech giants like WeWork and the stable of unicorns funded by Softbank began to falter — ranging from major crises, as in the case of WeWork; to a capital crunch for others.4
But despite these challenges, we did not expect the major threat of the COVID-19 crisis to global ecosys- tems. Since the crisis hit:
Layoffs among startups are rampant, with just over a third of startups globally not laying off staff nor cutting hours, and with the typical startup with full- time layoffs letting go an average 33% of the staff; and
Startups are facing a double whammy with a drop in consumer demand at the same time VC investments are dropping, leading to a crunch for capital. In fact, four out of every 10 startups have 3 months or fewer of capital runway, meaning they will die if they do not raise additional money and their revenue and expenses remain the same.
While we see early signs of a rebound in Asian ecosys- tems — nothing like a return to normal, but a slowdown of the drop — the startup economy is going through a major transition.
In 2020, the State of the Global Startup Economy can be seen through two main angles: the calm before the storm, up to Dec. 2019, and the consequences of the COVID-19-triggered crisis.
Most successful startups of 2020
The Calm Before the Storm
In the lead up to the crisis, the dominating trend for ecosystems globally has been the growing democrati- zation of tech across geographies.
Democratizing the Tech Economy
Despite the concentration of value in tech ecosystems, access to the tech economy is increasingly democra- tized.
In 2013, tech unicorns became a phenomenon, with the term popularized by Aileen Lee from CowboyVC.5 6 The name alludes to the rare and nearly mythical quality
of these companies. But
while still powerful they are not so rare anymore.
When we analyzed com- panies in the billion-dol- lar club — exits or private companies in technology with over $1 billion in val- uation — in 2013-2019 we see that in 2013 only four ecosystems produced unicorns or billion-dollar exits. Today, a cumula- tive 80+ ecosystems have done so, astoundingly.
Why there is no better time than now to invest in startups
Investments in the Indian start-up ecosystem surged 322 per cent in July year-on-year. They rose to $5.61 billion last month, against $1.33 billion in July 2019, according to data from Tracxn, a firm that tracks investments and financials of private companies and start-ups. The funding that went into Jio Platforms’ alone accounted for nearly 87 per cent of the total amount
The number of companies that garnered the investment, though, fell to 82 last month, against 120 in the same period in 2019.
Top-funded sectors
The top-funded sectors include telecom ($4,854 million), enterprise infrastructure ($236.2 million), ed-tech ($164.95 million), real estate- and construction-tech ($78.1 million), retail ($57.42 million) and media and entertainment ($53.90 million). The consumer sector, which encompasses online and technology-enabled consumer-facing companies in the business-to-consumer (B2C) space, raised $183.47 million.
While Jio Platforms, Nxtra Data, Vedantu, Zolo and Toppr were the top five funded companies in July 2020, the most active investors – based on the number of deals in July – included Mumbai Angels, Matrix Partners India, Accel, LetsVenture and Unicorn India Ventures.
Law outlines procedures for expropriation, calculating compensation, and appeal
The law also creates an ‘Expropriation Committee’ to oversee all matters related to expropriation of property. The chairman of the Dubai Ruler’s Court will issue a decision on the formation of the committee, its members, decision-making processes and expropriation procedures.
Dubai: A new law regulating procedures for expropriating property for public use in Dubai has been issued.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, in his capacity as the Ruler of Dubai, issued Law No. 2 of 2022 on the expropriation of property for public use in the emirate.
The law aims to ensure that the rights of owners of expropriated property are protected and that they are afforded full and fair compensation as per a clear set of rules outlined by it.
According to Ashu Sood, director of Brisk Avenue Dubai, the provisions of the law will apply to the expropriation of property across Dubai. The law, which covers special development zones and free zones including the Dubai International Financial Centre, regulates the terms and conditions under which buildings and facilities can be expropriated, including those that are completed and under construction. It also sets out the terms for providing compensation to the owners whose properties are expropriated, as per a decision issued by the chairman of the Dubai Ruler’s Court.
According to the law, if only a portion of a property is expropriated and the remaining part becomes unfit for use as per Dubai’s construction rules and regulations, full compensation will be provided if the owner does not want to retain it to add it to an adjacent property.
The committee is tasked with reviewing requests for expropriation including requests to assess the viability of expropriating a property to meet the objectives of a project. The committee may propose alternatives to expropriating a property for a project, including land grants. It will also assess whether a proposed project requires full or partial expropriation and evaluate the compensation for expropriated property.
Orders issued by Sheikh Mohammed to expropriate property in Dubai supersede the authority of the committee.
In case the expropriation affects a property that belongs to a local or federal government entity, compensation will be provided as per legislations and procedures approved by the committee.
Expropriations of property conducted before the issuance of the new law should follow all procedures and provide compensation as per previously existing terms and conditions within a year of the effective date of the new legislation. The chairman of the Dubai Ruler’s Court is authorised to extend the deadline by six months. If the deadline is not met, compensation will have to be provided under the terms of the new law.
The law outlines comprehensive procedures for expropriation of property, calculating the value of compensation, and appealing against the expropriation.
The new law annuls clauses of the resolution issued on January 1, 1964 regulating expropriation of private property for public use. The law also annuls any other legislation that may contradict it.
Cryptocurrencies, with no underlying asset, pose high risk to investors. According to data from crypto exchanges, there are approximately 1.5 crore Indians who have invested in cryptocurrencies holding Rs 15,000 crore
Indians investing in cryptocurrencies may be taking a highly risky bet in the absence of regulations by the Reserve Bank of India (RBI) and the government with respect to these instruments, said experts. Till regulations bring clarity, any type of crypto transactions should be banned in India, they said. “Be it as a medium of exchange, mode of investment/ assets, cryptocurrency dealings should be banned in India and should be made as a criminal offence,” said Madan Sabnavis, chief economist of CARE rating agency.
“Unless we have regulations and an official view on this, Crypto is no different from gambling,” said the veteran economist. The comment assumes significance at a time when investors are increasingly betting on crypto currencies.
Cryptocurrency is decentralised digital money, which works based on blockchain technology. Bitcoin and Ethereum are the poplar crypto currencies but there are thousands of cryptocurrencies in circulation.
Even as the Reserve Bank of India (RBI) and the Government have not formed an opinion on the crypto currencies, there are many Indians who have taken exposure in crypto market. According to data from crypto exchanges, there are approximately 1.5 crore Indians who have invested in cryptocurrencies holding Rs 15,000 crore. There are 350 startups who operate in blockchain and crypto. Crypto exchanges, WazirX, CoinSwitch Kuber and other exchanges, have seen a big rush in demand from users and crypto exchanges are advertising heavily on investments.
Already, the RBI has raised concerns on crypto currencies. On March 25, speaking at the 7th edition of India Economic Conclave, the RBI Governor, Shaktikanta Das had said the central bank has flagged some major concerns to the Government about crypto currencies. “Both RBI and the government are committed to financial stability. We have flagged some major concerns to the government on crypto currencies. The government will come out with a decision sooner than later,” Das had said.
The RBI, in 2018, banned all banks from dealing in cryptocurrencies but a Supreme Court order overturned this ban on a plea by Internet and Mobile Association of India (IMAI). The court said that while the RBI has the power to regulate virtual currencies, in the absence of any legislation, the business of dealing in these currencies ought to be treated as a legitimate trade that is protected by the fundamental right to carry on any occupation, trade or business under Article 19(1)(g) of the Constitution.
While the RBI is clearly not comfortable with the idea of cryptocurrency as a medium of exchange, the government’s stance on this issue is not clear. The government has proposed to present a Bill to regulate cryptocurrencies called The Cryptocurrency and Regulation of Official digital currency Bill, 2021. The Bill has provisions to make any dealings in cryptocurrency illegal. But there is no clarity yet on when this Bill will be introduced in Parliament.
Why people buy crypto?
There aren’t many attractive investment options in the present economic environment, where real interest rates have turned negative. With interest rate falling sharply, bank deposits have turned unattractive to the investors. Similarly, high volatility and a dull economic environment have made real estate, equity and mutual fund investments unattractive for HNI investors, prompting many of them to look at crypto bets.
Due to a mix of factors such as the COVID-19 crisis, the poor rate of returns on banking investments, cryptocurrency stands to gain in popularity as it is being seen with the potential to become a good investment alternative, like gold or real estate, if certain provisions are met, said Jaya Vaidhyanathan, CEO of BCT Digital.
“This is still far away, but it can happen over a period of time. We are going to see lack of trust from authorities till it is fully evaluated. Although Bitcoin has been seen with caution and distrust by authorities, its underlying technology, Blockchain, has a lot of advantages in today’s digital banking context as well,“ Vaidhyanathan said.
What if cryptocurrency gets banned in India?
Lack of clarity on regulation would mean that crypto investors may be facing high risk if the government decides against cryptocurrencies in India. Those holding crypto assets may face a sudden shocker if India decides to ban the cryptocurrency assets tomorrow, experts said.
“There is no underlying to the crypto currencies, so it is highly risky for anyone to use it as asset. You can’t certainly treat it as a mode of exchange. With high volatility seen in recent days, it is quite clear this is a speculative asset,” said Ashvin Parekh of Ashvin Parekh Advisory services.
“Also, there is a possibility of illegal elements using crypto for money laundering activities,” said Parekh. While big investors like Tesla founder Elon Musk can afford speculating in such assets, common investors may be facing high risk, Parekh added.
With the RBI not clarifying its position, banks have been wary about cryptocurrencies too.
“Central banks advocate the centralization of an economy and its banking system. Bitcoin or most cryptocurrencies, for that matter, are the opposite of that. They are not controlled by a country’s regulators or even governed by them,” said Vaidhyanathan of BCT Digital.
“Under such circumstances, it’s natural for regulators to be suspicious of them, leading to trading bans or tightened regulations. In 2018, a lot of Indians were trading in cryptocurrencies, convinced of its benefits. But soon, this was questioned and outlawed,” Vaidhyanathan said.
A senior banker, who didn’t want to be named, said banks are staying away from crypto transactions since the RBI hasn’t clarified its position officially. “For us, the RBI is the apex authority. Till the time, the RBI doesn’t clarify its position, we will not touch this segment,” said the banker.
Which countries are the top data producers? After all, with data-fueled applications of artificial intelligence projected, by McKinsey, to generate $13 trillion in new global economic activity by 2030, this could determine the next world order, much like the role that oil production has played in creating economic power players in the preceding century.
While China and the U.S. could emerge as two AI superpowers, data sources can’t be limited to concentrations in a few places as we have with an oil-driven economy — it needs to be drawn from many, diverse sources and future AI applications will emerge from new and unexpected players. The new world order taking shape is likely to be more complex than a simple bi-polar structure, especially since data is being produced at a pace that boggles the mind.
Building on our pastwork mapping the digital evolution and digital competitiveness of different countries around the world, we wanted to try to locate the deepest and widest pools of useful data. This is essential to run the myriad machine learning models critical to AI. To do so, it is useful to make a distinction between the raw volume of data and a measure that we shall call “gross data product” – our version of the new GDP. To identify the world’s top “gross data product” producers, we propose using four criteria:
Volume: Absolute amount of broadband consumed by a country, as a proxy for the raw data generated.
Usage: Number of users active on the internet, as a proxy for the breadth of usage behaviors, needs and contexts.
Accessibility: Institutional openness to data flows as a way to assess whether the data generated in a country permits wider usability and accessibility by multiple AI researchers, innovators, and applications.
Complexity: Volume of broadband consumption per capita, as a proxy for the sophistication and complexity of digital activity.
There are several nuances to note. For one, we recognize that the digital trace that is generated by computers around the world spans a very wide range of activities, from sending an SMS text message to making a financial transaction. To enable an apples-to-apples comparison across the world, we use broadband per capita as a measure of such breadth and complexity (in some ways, mimicking the use of per capita income as a proxy for overall prosperity).
Second, there are differences across countries in terms of how private data is shared across agencies and whether there are digital identity frameworks that can help connect individuals to their digital activities. These institutional factors could make a difference to how data could eventually be pieced together. We do not call out these distinctions. We chose the countries included in our analysis based on a few considerations: 1) Countries that are the most significant contributors to the global digital economy either because they are high on our earlier digital evolution index score or because they have strong momentum in their digital activities; 2) Countries that represent a reasonable spread in terms of region and socio-economic position; and 3) Countries that provided us with a solid data and evidence base to do the analyses.
Finally, an important consideration in determining accessibility is privacy. Privacy concerns and data protection regulations can help or hinder the abilities for algorithms to develop new capabilities. We take the position for this analysis that an established framework for ensuring privacy and data protection and openness to the mobility of data is a net benefit and a positive contributor to the development of AI over the long term. As an example, consider the problem of fraud detection in financial transactions. Applications that draw upon insights from diverse geographic locations and multiple usage contexts help establish patterns of trustworthiness and help flag security risks; such applications benefit from systems that meet the accessibility criterion. That said, we acknowledge that in the near-term there could be some countries – China being the pre-eminent example – where data-sharing between public and private sector agencies with very little mobility beyond the national borders could violate privacy and openness norms and yet yield a temporary advantage in training algorithms inside a “walled garden.”
Which of these criteria should be used in assessing a potential new world order, based on data? We believe accessibility should remain a foundational criterion. If one were to take the point of view that the biggest and highest impact AI applications are the ones that serve the greatest public purpose, access to data is key. In its recent study of AI for the public good, McKinsey cites access as one of the principal barriers: of the 18 bottlenecks identified by McKinsey, six relate to data availability, volume, quality, and usability.
This chart below shows what happens when the 30 countries we studied were mapped using two of our criteria:
While the U.S. scores well on all three criteria – and this might seem counter-intuitive to prevailing wisdom — China operates with a handicap if global accessibility of the data is considered essential for creating successful AI applications in the future. If the EU (currently including the UK) were to act as a collective, it represents a key producer that could rival the U.S. Besides, China, other BRIC nations, Brazil, India, Russia, could emerge as strong tier two contenders, largely on the strengths of raw data they produce; however, they too would be handicapped by accessibility concerns.
A different set of implications emerge for smaller countries, such as New Zealand, or those unaffiliated with larger economic unions, such as South Korea, but with high openness and mobility in data flows; such countries would benefit from establishing trade agreements in data with other “open” countries and thereby overcome their natural limitations, either in terms of number of users or in terms of total broadband consumed within the country. The forms such trade or data-sharing agreements might take is yet to be determined; however, we can envision that they could be a distinct possibility especially when we recognize that gross data product has value just like any other product that is freely traded today.
Of course, the direction of high-value AI applications is still emerging. There is also a risk of AI itself being over-hyped, misunderstood, and set up for disappointments down the road. But it’s clear that many important applications are already in use and more are coming. Our analytical framework is flexible enough to account for such fluidity. If we use a different set of criteria as being more relevant for driving successful AI applications, we find a different picture emerging. The chart below offers one such possibility, where only complexity and accessibility are considered.
When viewed in this manner, there is a more linear structuring of this “new” data-driven world order. The high broadband consumption per capita and institutionally open countries (in the top right hand portion of the graphic) emerge as the clear winners. One can imagine a scenario where the high complexity and mobility of data flows in the top-right of the graphic allow for a more productive “free-trade” zone, where countries mutually benefit from tapping into each other’s data reservoirs.
Finally, we considered a scenario where all four criteria ought to be considered important. If we assign equivalent weights to all four, a ranking of “new” data producers and an updated world order emerges.
1. United States
2. United Kingdom
3. China
4. Switzerland
5. South Korea
6. France
7. Canada
8. Sweden
9. Australia
10. Czech Republic
11. Japan
12. New Zealand
13. Germany
14. Spain
15. Ireland
16. Italy
17. Portugal
18. Mexico
19. Argentina
20. Chile
21. Poland
22. Brazil
23. Greece
24. India
25. South Africa
26. Hungary
27. Malaysia
28. Russia
29. Turkey
30. Indonesia
Of course, these segmentations provide insight into where the major data producers are based on a set of assumptions about what will be important for the highest-value applications in the future. Our purpose was to acknowledge the uncertainties and show how alternative assumptions yield different scenarios for the world order. A different segmentation and ranking would emerge if were to ask a different set of questions focused on the outcomes, such as economic or geopolitical value through AI that might be assigned to each country or how countries rank in terms of ease of doing digital business currently as they prepare for such a future. We are developing these in future research projects.
Data is the fuel of the new economy, and even more so of the economy to come. In declaring back in 2017 that the world’s most valuable resource is no longer oil, but data, The Economist said: “Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace — more raw material for the data distilleries.” Algorithms trained by all these digital traces will be globally transformational. It’s possible that a new world order will emerge from it, along with a new “GDP” — gross data product —that captures an emerging measure of wealth and power of nations. It is time we identified what the field looks like now that new competitive and collaborative opportunities are developing.
This growth of the Indian IT industry will come primarily on the back of digital services.
February 19, 2021,
The Indian IT industry is expected to touch the $300-$350 billion revenue mark over the next five years growing 10% a year. This will mean that the $194 billion Indian tech industry will be growing at a much faster clip than the 7.5% growth rate registered over the last five years, according to a soon-to-be-released report by McKinsey & Company. This growth of the Indian IT industry will come primarily on the back of digital services, which currently accounts for 30% of the industry’s revenue, but its share is expected to go up to 50% over the five years totalling to around $170 to $200 billion of revenue for the industry, said the report the highlights of which were presented on Thursday at the Nasscom annual Technology and Leadership Forum. UB Pravin Rao, chairman of Nasscom said, “One thing is very clear, we are pivoting into a hyper digital world and it has implications for technology service providers…” Rao who is also chief operating officer of Infosys added, “Today around 20 to 30% of our revenue is coming from digital. Obviously we have seen quite a bit of acceleration and this will only go further given the current pandemic situation.”
The report said that to achieve the expected growth, there will have to be “multiple concerted actions” by the industry which will include investment by the Indian service providers in building and scaling digital technologies to create differentiated and scalable offerings at a global level. It will also include accelerating investments in reskilling the talent in new growth areas such as enterprise SAS ecosystem, Cybersecurity, data, artificial intelligence, 5G, IoT, product engineering etc.
Noshir Kaka, senior partner at McKinsey & Company said that clients are of the view that technology is leading their recovery from the COVID pandemic. “We believe that technology spending is going to bounce back far faster than it has ever done from previous crises, and as a result we’re seeing again that acceleration and spending.” He added that the bounce back was visible in the order book of the actual work coming to all the industry participants lately. The report highlights also said that one of the biggest trends that will shape the future of technology will be that tech intensity will increase from 3% of revenue to 5% of revenue. This means that digital natives or reinventors will account for 75% of enterprise tech spending in the next five years. To capture this growth, service providers will have to consider changing their focus to new opportunity sets. Also, tech is accelerating fundamental shifts and business models worldwide. First is direct to consumer or direct to stakeholders and the second is ecosystems. These new business models are expected to account for about $150 billion opportunity for service providers going forward. Also, cloud, AI, and cybersecurity will accelerate the pivot to digital.
The bill may allow holders of such currencies a transition period to exit the asset class before its anticipated ban.
NEW DELHI : The proposed cryptocurrency bill may allow holders of such currencies to exit the asset class before its anticipated ban but may put a heavy penalty on its conversion to a legal asset.
“The bill is yet to be finalized. The form and manner of declaration and how existing holders of the cryptocurrency should dispose of it will be prescribed either in the law or through the rules to be notified later,” a finance ministry official said on condition of anonymity. The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 is scheduled to be tabled in the ongoing budget session of Parliament. The bill is intended to “create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India (RBI). The bill also seeks to prohibit all private cryptocurrencies in India. However, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the Lok Sabha secretariat said in a bulletin.
The bill is likely to make mining, holding, selling, issuing, transferring, and using of cryptocurrency a punishable offence with a heavy fine or imprisonment or both.
“Certain media reports suggest that the government has decided to ban all private cryptocurrency and other key players of the industry. We would like to receive an intimation from the government on this. We would like to reiterate that the government of India is yet to release the draft of the proposed bill. As an exchange, we remain hopeful that the ministry of finance will definitely engage with the community before taking any harsh measures,” said Sumit Gupta, founder of cryptocurrency exchange CoinDCX.
Investments worth $24 million went into crypto firms in 2020, up from a mere $5 million in the previous year, as per data from analysis firm Venture Intelligence. Crypto firms in India have also experienced a successful year since the lockdown in March 2020. Crypto trading in India has become a formalized sector over the past few years, because of the rise of various crypto exchanges.
The organization digit insurance protection raised its first outside subsidizing round a year ago at a valuation of $870 Mn
It has raised about $200 Mn till date.
Digit Insurance professes to have noticed a 31.9% development rate over the most recent nine months
Bengaluru-based insurtech startup Digit Insurance has become the main Indian startup to enter the unicorn club in 2021, in the wake of raising INR 135 Cr ($18 Mn) from existing speculators at a valuation of $1.9 Bn. It has raised the financing as development cash-flow to meet the dissolvability edge prerequisite, following a 31.9% development over the most recent nine months.
Digit Insurance has raised about $200 million till date from marquee financial specialists A91 Partners, Faering Capital and TVS Capital, which own about 11% stake in the organization. It raised its first outer subsidizing round last January at a post-cash valuation of about $870 Mn. The organization had raised $84 Mn (INR 614 Cr at current change rate) as a piece of this round, in which Indian cricketer Virat Kohli and Bollywood entertainer Anushka Sharma implanted about $340K (INR 2.5 Cr).
Before this, the organization depended on an inward capital implantation from Fairfax Holdings. The advertisers have put more than $142 mn in Digit Insurance in 2017 and 2018, and own about 88% stake in the organization. “Our technique was to improve items and measure and back it up with great assistance. This is working for us to accomplish development,” Goyal clarified
Established in 2016, Digit Insurance is a tech-driven general insurance agency that offers altered arrangements on wellbeing, auto, travel, cell phones, business properties, for example, stores and occasion homes. It extended its business during the pandemic by offering new items like fixed advantage cover for Covid-19 under Insurance Regulatory and Development Authority’s (IRDAI) sandbox activity.
The organization asserts that it was going to connect with in excess of 20 Lakh Indian through their Digit Group Illness Insurance item, which offered assurance against Covid-19 and 7 Vector-borne sicknesses like dengue, jungle fever, filariasis, ala azar, chikungunya, Japanese encephalitis and the zika infection.
As indicated by an IBEF report, the Indian protection industry was relied upon to reach $280 Bn before the finish of 2020 and develop at a build yearly development rate (CAGR) of 12-15% throughout the following three to five years. The market is required to develop as the Indian government pushes for protection infiltration and multiplication of protection plans. As indicated by BlackSoil’s fellow benefactor and chief Ankur Bansal, the insurtech will be a top choice among speculators in 2021 as the portion is required to develop.
12Jan2021
Follow your passion, be prepared to work hard and sacrifice, and, above all, don’t let anyone limit your dreams.
Planning to launch your own start-up? Now is the time. India is in its best ever phase of startup ecosystem and the economic environment is favoring the aspiring minds. However, careful planning and futuristic approach are imperative to ensure your startup don’t end like the 94% that shut down their shutters within the first year of operation.
Funding is an extremely significant aspect in line with meeting the vision of a business. Funding and fundraising, both are fundamental modern business scenarios that support the growth of a startup. The first round of funding, popularly known as seed funding forms the basis of fundraising. It is followed by series A, B and C rounds of funding. While the seed funding typically refers to the basic, initial round of funding, series A, B, and C differ in the business maturity and the type of investors involved. The series funding helps in the evolvement of a startup to a full-fledged organization by helping it with calculated funds at crucial steps.
Here are a few successful startup funding options in India that will help you support your business with the indispensable finance requirements.
Go for Crowdfunding
The concept of crowdfunding is quite similar to mutual funds on a basic level. In this option, more than one investor is involved and they offer a fixed amount of money based on your business idea, goal, plan of action, and plans of making a profit. All you need to have are people who truly believe in your business idea.
Crowdfunding is gaining popularity as it ascertains the belief that your idea is also believed by other experienced players in the market. Crowdfunding also helps you in getting the crucial funds from the idea stage itself. You can gather crowdfunding from friends, family, and entrepreneurs who believe in your business concept and have the means to come together and fund your aspiration.
Consider Self-funding
Popularly known as bootstrapping, it is an ideal plan of action when it is hard to convince others of your business idea and vision. Often investors ask for traction before making an investment, the initial round of self-funding allows you to prove the feasibility of your idea and build confidence in the investors for a further round of funding.
Bootstrapping is a great idea for startup funding especially if the initial business requirement is small. It also gives you the freedom of being your own boss. You’re not answerable to anyone and it allows you to keep an eye on the revenue earnings as well.
Get in touch with the Venture Capitalists
A sure shot destination for big bets, venture capitalists offer you professionally managed funds who are looking for startups that have success potential. The best part about venture capital investments is the expertise and monitoring that they bring along. Ordinarily, VCs invest in equity and once the business releases its IPO or is acquired, they leave.
Venture Capitalists usually look for startups with a good enough traction and a strong team. But if you’re opting for venture capital funding, be flexible enough to take their inputs and accept the close monitoring.
Try Angel Investment
There are individuals with surplus cash looking for investing in promising startups and earn their share once it grows to its potential. They can either work alone or collectively in a network to screen startups with huge potential. This funding option has business minds looking to earn interest out of your success and they may expect as high as 30% equity as well.
Although angel investment comes with its issues of high-interest expectations and lesser investments as compared to Venture capitalists; it is important to remember that Google, Yahoo, and even Alibaba were a result of Angel investing.
Conclusion
Funding is required to take the best advantage of the existing and upcoming market opportunities. Even if you initially go for bootstrapping, outside funding is required to sustain in the long run.
From having a handful of tech companies to dozens and thousands of innovative new ventures, India’s startup ecosystem has grown immensely in the past decade
India has witnessed launch of more than 55,000 startups to date with more than 3,200 startups raising $63 Bn in funding in the last five and half years alone
Home to 34 unicorns, and 52 soonicorns with a potential to become unicorns by 2022, the world’s second largest startup ecosystem is poised for disruption
In just over half a decade (2014-2019), India has shown a great appetite for technology, data and the internet. The internet paved the way for thousands of startups to rise over the past decade, address unique problems, transform entire industries and create new segments!
From having a handful of tech companies to dozens and now thousands of innovative new ventures, India’s startup ecosystem grew immensely in the past decade. From 29K startups in 2014, the number has grown exponentially from 2015-2018 and will touch 55K startups by the end of 2020.
With overall funding skyrocketing to touch $63 Bn between 2014 to H1 2020 alone, India has seen entry of 34 startups in the unicorn club having a combined valuation of $115.5 Bn.
Celebrating the success of the startup ecosystem in the last decade, we are happy to announce the launch of the second edition of our flagship report – The State Of Indian Startup Ecosystem, 2020.
The report will act as a go-to-guide for just about everything one may want to understand about the Indian startup ecosystem. With deep, data-driven insights to influence strategic decision-making in governance, investments, growth, and other core aspects driving the Indian startup ecosystem.
The State Of Indian Startup Funding
It won’t come as a surprise to anyone that 2020 has brought some very unprecedented changes in the business world. For Indian startups, the funding winter this year has begun in the middle of sweltering summers. While the ecosystem has come a long way since 2014, going through the golden period of funding between 2015 and 2017, after a couple of years of slow but mature growth, 2020 has been a year of decline.
Over the years, the growth of startups has brought in more international investors and boosted their confidence towards India. Fundraising reported by SEBI-registered (Category 1) venture capital funds grew from INR 326 Cr in 2014 to over INR 2,703 Cr in 2019 – an 8x surge in five years. Also, the share of actual capital raised to commitments in 2014 was 35% compared to 61% in 2019, indicating the growing investor interest towards investment opportunities in India.
With such huge money at play, the Indian startup ecosystem has a lot to lose due to the pandemic. It has already left millions of people jobless and created a liquidity crisis in many places. Covid-19 has created a new market in almost every sense, for instance, once-lauded metrics such as the gross revenue and total addressable market has been usurped by sustainability-focussed goals like EBITDA and economies of scale.
The numbers make it quite evident that investment activity in startups is slowing down post the pandemic. Therefore, in a scenario (i.e. Case 1) where high ticket value investments in established startups will continue to flow along with greater investor confidence towards the beneficiary sectors such as edtech, fintech, online gaming and OTT, ecommerce and enterprise tech. The total capital raised by Indian startups in 2020 is estimated to reach $11.3 Bn in this case, which can be termed the best-case scenario, an 11% decline compared to the previous year.
On the contrary, in Case 2, high ticket size investments will take a hit and there will be only moderate investor confidence towards the beneficiary sectors. Under this scenario, the total capital inflow in Indian startups is expected to dip in 2020 by as much as 36.2% compared to 2019, to reach $8.1 Bn. In both scenarios the total capital inflow in Indian startups for the year 2020 is expected to be the lowest since 2017.
State Of Unicorns And Soonicorns
From a single unicorn in 2012, 10 in 2016, India has seen 34 startups attaining unicorn status with a current combined valuation of $115 Bn.
In our recent analysis of the Indian startup ecosystem based on the current pace and growth and other factors we have identified 52 soonicorns which have the potential to enter the unicorn club by 2022.
There are 53 startups in India that have the potential to achieve $1 Bn plus valuation by the end of 2022 as per our analysis. Out of which the single highest number of startups (19) is from fintech. This is different from the same in unicorns where enterprise tech startups (7) have the highest number.
The State Of Indian Startup Hubs
As we closed the first half of 2020, Bengaluru the long hailed startup capital of India still has its crown intact with a total funding amount of $28 Bn across 1,876 deals between 2014 to H1 2020.
Lately, in addition to the top three hubs (Bengaluru, Delhi NCR and Mumbai) emerging hubs such as Pune and Hyderabad have recorded a compounded annual growth rate (CAGR) of 45% and 37% respectively.
In the tier segment, Jaipur and Goa have earned their spot in the top 10 startup hubs as of H1 2020 based on the number of funding deals. Interestingly, Jaipur a tier 2 city has outperformed Kolkata- a celebrated tier 1 metro.
The State Of Indian Investor Landscape
With the beginning of a new decade in the 21st century earlier this year, the journey of Indian startup ecosystem has entered a new phase. From a handful of investors and a few startups to over 49K startups and over 2,000 Indian and international investors, the startup ecosystem has come a long way in the past five years. International investors now routinely come to Indian shores to invest in the burgeoning tech ecosystem.
While angels and corporations undoubtedly have played a big role in funding trends, according to DataLabs by Inc42 analysis, 2019 was not one of the better years for venture capitalists.
As per our analysis, till the second half of 2020, there are approximately 4,640 active investors in India. Among these, the majority or 59% (2,751) are angel investors and 18.3% (849) are venture capital firms. Overall there is a downward trend in terms of unique investor participation similar to what has been observed in 2019. However, the frequency of participation by the existing investor is on the rise.
Looking Beyond 2020
While the first decade of the 21st century was all about bringing India’s cities and metros online, the past ten years have been about using the internet to create businesses and startups and take the digital torch to Tier 2, 3 markets and rural India. India is today home to the world’s largest working population and startups are expected to take full advantage of this in the next five years.
After steady growth in 2018 and 2019, in 2020 too, the Indian startup ecosystem was expected to remain stable in terms of funding and investor interest, but the pandemic has changed the game completely. With the funding winter coming in early, there’s a bigger focus on sustainability, which is also expected to play a part in the number of funding deals.
Nevertheless, there are several positives still in the Indian market to give us hope about the future of startups. Growing from a nascent stage to a flourishing ecosystem to the current stage of maturity and stability, Indian startups have some of the best market conditions to take advantage of with digital products and services adoption at an all-time high. Once the medium and long-term pandemic impact subsides, there’s no stopping Indian startups.
By 2025, the number of startups in India is expected to cross 100K, creating more than 3.25 Mn jobs in the process. At the same time, the total funding in Indian startups is likely to increase to over $150 Bn and with the total value creation exceeding $500 Bn.
Indian investors taking advantage of discounts and post-handover payment plans
Cash-rich Indians have been re-entering Dubai property market in large numbers after a Covid-induced break, lured by attractive discounts and post-handover payment plans, property consultants say.
The recent months have also seen secondary markets in the UAE gaining traction with expat Indians, who intend to use the market conditions to upgrade from being a tenant to an owner, the consultants said.
The second quarter of the current fiscal year has seen a demand pick up from Indian investors. Indian business communities, who are frequent travellers to the UAE or want a trophy asset, have also taken advantage of the price softening to close some major deals during this period,” he said.
Consultants in India also confirmed the rising interest among wealthy Indian investors to take advantage of the current market conditions in Dubai.
Industry experts feel the upcoming IPL (Indian Premier League) in Dubai is also bound to reignite Indian investors’ interest in the Dubai property market.
Dubai has been a second home to many rich and famous Indians – Bollywood icons Shahrukh Khan and Shilpa Shetty among them – for many years.
“Indians have been favourable to Dubai as an international real estate investment destination. In the past few years, Indians ranked third amongst top nationalities investing in Dubai,” Sood said.
Ashu said given the market conditions and sentiments, majority of Dubai based developers are now offering attractive discounts to lure customers, including overseas customers.
“There is a possibility of additional deal sweeteners in terms of furnishing options and DLD waivers which are being brought to the discussion tables. The clear trend is that developers are ready to be flexible to adjust to the demands of the buyers as long as it is within reasonable limits,” he said.
Sood also pointed out the latest data released by the Dubai Land Department to support recent turnaround in market sentiments.
“The Dubai Land Department recently declared transactions exceeding Dh 24.5 billion for Q2 which takes the half yearly transactions value to Dh 72.5 billion.
“This represents more than 22,000 deals and Indians being one of the top investors in Dubai have contributed a fair share of that,” he says.
According to property consultants, the security offered by Dubai to investors is what makes its market so lucrative to investors. Backed by a strong RERA, the entire real estate value chain in UAE is protected against any fraudulent activities.
