A compilation of important news from the startup world:
Why India’s core healthcare startups haven’t received much funding
While India’s startup revolution has transformed retail, automobiles and other consumer segments, core healthcare remains relatively untouched. India’s IT cities like Bengaluru, Hyderabad and Gurgaon are becoming boomtowns for healthcare start-ups, and with investors willing to fund dreams, there seems to be an interest in the space. However, this is limited to preventive healthcare, fitness bands and patient awareness. We’re talking about ‘tech-enablers’ for healthcare, like Practo, Lybrate and the rest. Medicine and healthcare startups fall under two categories – research-based ones that make new medicinal products or ones that use existing tech. The top 5/10 pharma companies hog all the innovation in the first category. That’s because this is a capital-intensive space that needs years of investment before reaping profits. It’s not easy for a startup to have access to that kind of capital, research facilitates or talent.
Startups and the Indian drive for trade and services
Market spaces with equivalents in the US, China and other regions might be valid in India. However, it is reckless to jump to the conclusion that they would provide equivalent returns in equivalent time frames (except for opportunistic flips to new money eager to fulfil its own prophecy). Those following the US and Chinese equivalents will find that India will be more fragmented, returns will remain flatter and investments will remain illiquid longer. While this conclusion demands its own essay or a book, its headline would hint at the homogeneity of China due to a closed economic system, homogeneity of the US due to economics that favour technology systems, and the heterogeneity of India due to economics that favour human systems. The diversity of language, identities, social-economic objectives and democratic ways of the human network make this heterogeneity unique
Ramdev to take on online healthcare startups
After taking on FMCG biggies in the country, Baba Ramdev is turning his attention to digital health startups such as Lybrate and Practo. Patanjali, Ramdev’s Haridwar-based company, is lining up an online platform (chikitsalaya) for ayurvedic consultation and treatment, said people familiar with the development. Patanjali, which has raked in revenues of around Rs 5,000 crore in 2015-16, sells FMCG products such as ghee, soaps and honey, while its sister concern Divya Pharmacy manufactures and sells Ayurvedic medicines. Ramdev also runs an ayurveda hospital and a medical college in his campus Patanjali Yogpeeth, near Haridwar, which hosts thousands of visitors every month. BigChemist, which gets around 10 lakh page views per month, is getting an increasing number of enquiries for natural products.
The Demise Of FoodTech Startups In India
This is a case of bad planning and greed for short term expansion. In the initial stages when many investors were interested, startups gave discounts with an open heart and made the service available at the nook of every street. One thing to keep in mind here is that these firms buy food at normal price from the restaurant and we get the food at discounted. The only money they take is the delivery fee which makes about Rs 50 per delivery. But in the haste to emerge out at the top, many firms exhausted their resources. If they were expecting customer loyalty in that short term, it would have been stupid. The customer went where they saw a better discount and investors saw what was coming. This became a recipe for disaster, delivered at their door step with at the cost of losing their ventures. Ironic, isn’t it?
Starting startups, the Raghuram Rajan way
Raghuram Rajan has been a vocal supporter of startups and entrepreneurship, a view made amply clear in his various interactions ever since he took over as the governor of the Reserve Bank of India (RBI) in 2012. So it was not surprising when Rajan took time out from his busy schedule in Bhubaneshwar last week to visit the Kalinga Institute of Industrial Technology (KIIT), which operates on an annual collection of Rs 80 crore, comprising almost entirely of funds raised from stakeholders of the institute, its staff, vendors and from in-house sales. Only 10% of the annual collection comes from donations. Rajan spoke about the growth in Indian entrepreneurship, which was linked to service.
Indian startups adopting slower strategy to sustain business models
As the mortality rate of Indian startups has been as high as 90 percent, some of these companies are now adopting new concepts and strategies such as developing their ventures by laying a strong foundation for survival. For these few, gone are the days of moving fast and boasting of incredible spikes in revenues, all the while ignoring the fact that they need to survive and expand their businesses in the long run. While 2015 was been a turning point in the startup ecosystem funding in India, coupled with opening of the floodgates in getting funds after the Indian government announced a slew of measures to encourage startups early this year, these founders are keen to see their companies turn into money spinners rather than attracting more funds.
TinyOwl shuts operations in all cities except Mumbai
TinyOwl has finally pulled down the shutters on its food ordering business after struggling to restructure it for several months. It is likely to come back as a full-service delivery app. The food ordering app, which in November last year saw several sacked employees in Pune holding co-founder Gaurav Choudhary hostage over their severance package, has reportedly shut down its operations in 17 cities except some areas of Mumbai. Users in several cities, where TinyOwl operates, received a service update from the firm saying, “We will be discontinuing service in your locality after 22 May”. “We will come back soon to serve you better,” the message added.
Digital media startup SheThePeople gets funding from Anand Mahindra
The firm will use the capital for expansion as it plans to launch a number of initiatives, including forums, events and content in regional languages, it said in a blog post. SheThePeople, owned and operated by Digitalist Tech Media Pvt. Ltd, is a digital media initiative dedicated to showcasing success stories of women achievers. The portal has profiled stories of nearly 10,000 women, including entrepreneurs, authors, sportswomen and corporate executives. The stories are currently offered in English and Hindi and driven primarily by video content. It also conducts conferences and other events.
Nurturing engineering and science startups
In technology adoption space, couple of trends are quite visible. First, technology companies are pushing for cloud adoption instead of on-premise deployment of a solution and second, there is huge focus on platform based approach in which a technology firm provides platform as a service. Recently, US-based National Instruments (NI), which operates in the measurement and automation space, and makes automated test equipment and virtual instrumentation software launched business incubator programme in India, primarily focused on providing its LabVIEW software to Indian startups and engineers for turning their ideas into practice, and also announced the expansion of the R&D centre. According to company officials, both these initiatives are aimed at catalysing the existing startup ecosystem in India and ensuring the access to the top talent from India for National Instruments. “Both these initiatives aim to support the government’s Make in India program and enable Indian engineers to become global knowledge partners in driving innovation and development across industries and domains,” Scott Rust, senior vice president of Global R&D at National Instrument told EC.
Online investment platform Goalwise gets angel funding
Online investment platform Goalwise, run by Alphafront Finserv Pvt. Ltd, has raised $1 million (around Rs 6.8 crore) from a bunch of high net-worth individuals (HNIs), its CEO and co-founder Swapnil Bhaskar has told Techcircle.in. Bhaskar said the HNIs were associated with the financial services sector but declined to name the individuals. The funds raised will be used to scale up Goalwise’s technological, analytical and operations infrastructure. The fin-tech startup will look at raising about $5 million in the next three to four months, he added. Bangalore-based Goalwise runs on its self-designed algorithms for investment advisory, mutual fund selection, as well as a goal tracking technology called GoalSense.
Astarc Ventures eyes tech start-ups abroad
Early-stage investor Astarc Ventures is to raise the fund’s corpus to $10 million over tranches in the next 2-3 years, following the complete deployment of its maiden $2-million fund. For the first time, the family-office fund is also looking to invest in technology start-ups in the UK, Israel and Silicon Valley. “We have exhausted the $2 million as of March end, and now we would look at bringing in further funds. The corpus would be raised from the family, of which about 70-75 per cent would be invested in Indian start-ups,” said Salil Musale, Executive Director, Astarc Ventures. Astarc Ventures, which typically invests about ₹50 lakh-₹2 crore, and in exceptional cases up to ₹6 crore, had raised its first fund in 2014.
How Cybercrime Startups Are Adopting Mainstream Tech Business Practices
Cybercrime is one of the most talked-about and least understood topics in the news today. The criminals who run hacking organizations almost never enter the limelight to claim their victories, and you certainly wouldn’t recognize them if you passed them on the street. But the truth is that cybercrime operates much like any legitimate business. There are integrated marketing campaigns, risk and cost analysis, research and development (R&D), even Black Friday deals–all of the things you would normally associate with any company trying to win over customers. In the 2016 Trustwave Global Security Report, we examined several areas where these cybercriminals are behaving more and more like mainstream businesses. Malvertising, for instance, is when criminals take over legitimate advertising sites or launch malicious ad campaigns for the purpose of delivering and executing malware.
MCube Capital invests in food-tech startup Eatonomist
Eatonomist, an online platform that delivers meals prepared at its kitchens, has raised an undisclosed amount in seed investment from MCube Capital Advisors Pvt Ltd, as it tries to enhance operations, a top company executive told Techcircle.in. The Gurgaon-based startup, which is run by Fitmeal Solutions Pvt. Ltd, will use the capital for marketing and building brand. Founded in November 2014 by Anisha Dhar and Nupur Khanna, Eatonomist follows a full-stack business model wherein it controls the kitchens and delivery services. Its menu includes sandwiches and desserts besides a range of Indian foods. The startup claims to deliver calorie-counted gourmet meals. “Our recipes are lab tested to ascertain the exact amount of nutrients,” said Dhar.
Ed-tech startup EduRev gets strategic investment for its expansion
Joining the list of ed-tech startups receiving investments since the beginning of this year, EduRev, which is an online educational network, has received strategic investment from Pradeep Reddy Kamasani. The funding raised will be used by the company to focus and expand its operations across southern parts of India. Till now, the company was more focused towards northern side of India. This newly raised funds will also be utilized for the introduction of a new model that will help colleges in admitting new students. While the company started with operations in Chandigarh, it is currently operating in Pune, Haryana and New Delhi. It is currently working with around 24 clients and has earned revenues of Rs 14 Lakh. Other ed-tech startups which have recently raised funding include iDreamCareers.com which raised pre-Series A round from Brand Capital; Oliveboard, FlipClass, Oust Labs, Myly, Schoolguru, Career Power, among others. EduRev’s model will compete with the likes of Shiksha and Career360.
Indian startups adopting slower strategy to sustain business models
As the mortality rate of Indian startups has been as high as 90 percent, some of these companies are now adopting new concepts and strategies such as developing their ventures by laying a strong foundation for survival. For these few, gone are the days of moving fast and boasting of incredible spikes in revenues, all the while ignoring the fact that they need to survive and expand their businesses in the long run. While 2015 was been a turning point in the startup ecosystem funding in India, coupled with opening of the floodgates in getting funds after the Indian government announced a slew of measures to encourage startups early this year, these founders are keen to see their companies turn into money spinners rather than attracting more funds. The Mumbai-based startup AllSuperMart, which kick-started its operations in October 2015 in a small way, has opened 45 branches and operates 250 cities across the country at present. It intends to create an organised ecosystem for local shop vendors to sell their products and services online and has succeeded in its efforts in less than a year.