14 February 2020
Why Startups are important for India’s Development?
Today we see funding for Startups in all sectors i.e. Fintech, Deep tech, Transport Tech, Edtech, Health Tech and Enterprise Tech among many more. In practically every industry, technology has become an enabler. On one hand we see basic infrastructure and needs such as safe water, electricity and road connectivity not being provided and on the other hand we see early stage investors and angel investors in India providing initial funding to technology enabled startups. Many people feel these issues are at odds with each other.
However, I believe that the challenges we face today as a country, especially around reaching people in all parts of the nation, can only be solved by using innovative products and services, and for this purpose startups play a critical role.
Just as we saw telecom services help leapfrog technology and get people access to mobile phones when they couldn’t get a landline, similarly we now see early stage companies help people leapfrog technology by providing products and services they don’t have access too. This is different from the way we have seen technology companies come up in the west, where basic infrastructure already existed. And for this reason, I believe that startups are important for India’s development. With the population and scale, we have as a country we need technology to provide products and services where infrastructure has not been able to reach. For example, e-commerce has helped bridge the gap left by high street retail in many cities by connecting consumers and sellers across the country or fintech companies have allowed people to access financial services where our regular banking channel has failed. We have seen several successful startups emerge in the last decade from meeting customer needs where existing industries have failed.
The biggest potential for this lies in the education and healthcare space where traditional infrastructure-based models have yet to fill a gap in the market. And we are yet to see many more scalable startups emerge in these two sectors.
So, while we may still have discussions about the lofty valuations in the startup world, the Indian startup ecosystem will evolve differently from the rest of the world, where we are now seeing more problem-solving companies emerging rather than the copycat approach of the past.