What makes an InMobi, iYogi, PubMatic, Zoho or a Komli Media stand out among Indian tech startups? Scale? Yes, but scale coming from eyeing the big picture "the global market for their product or service and that, too, pretty early in their lifecycle.
They were quick to realise that many tech companies are not able to scale and even die, not because of their inability to build technology or products, but due to lack of customers. Such realisation is not without a reason as veteran entrepreneurs and investors believe that going global helps companies not only to target a large customer base but also markets which are less price sensitive.
"The Indian tech market is not yet large enough to facilitate building companies of scale," said Helion Venture Partners' senior MD Ashish Gupta who earlier built the BPO firm Daksh eServices and sold it to IBM.
"A lot of companies in India need to target customers who will pay more than an Indian customer. Also, several ideas that are being implemented are better suited to overseas markets just because these markets are more ready," he added.
If market trends are anything to go by, SaaS companies seem to be at the forefront of looking at the global market. However, many consumer internet startups and related ventures of larger firms such as Zomato, BookMyShow (part of Network18) and Buzzintown (now controlled by Yatra) have also ventured into the international market.
"Startups are going global because the markets are larger, the customers make decisions faster and they are less price sensitive than the customers in emerging markets," said Mukund Mohan, CEO-in-residence at Microsoft Accelerator for Windows Azure and an active angel investor. "However, some of the problems the customers are facing in the US are not yet burning issues for customers in India and China," he added.
Investors believe that there is a definite trend that Indian startups are increasingly migrating to global markets.
"Indian startups are looking to compete against their peers in other markets â€“ not just on price but on simplicity, ease of use and superior functionality," said Sandeep Singhal, co-founder and MD of Nexus Venture Partners.
According to Prashanth Prakash of Accel Partners, startups have been focusing on markets outside India over the past two years. "In many cases, the global opportunity is a better utilisation of entrepreneur time and the money they have raised from their investors," he said.
While the InMobi's of the world are the usual suspects, you will find a whole lot of India-born tech startups who now sport an international address. Here is a list of a few young things that started after 2010 and have gone global.
SupportBee, Inc.: Set up in early 2010, Bangalore-based SupportBee offers help desk software to manage customer support e-mail and track support tickets. "We have been focusing on a global market since Day I. We see no reason to focus on a specific market (like India). There is a definite trend happening here. Businesses in the US are already used to SaaS software and paying for them," said co-founder Prateek Dayal. So far, the company has bagged more than 100 clients.
Reduce Data Inc.: A real-time advertising analytics and optimisation platform, Reduce Data helps advertisers identify and eliminate wasted ad spends, which in turn, leads to improvement in campaign ROI. The Chennai-based company was set up last year and started expanding globally since then. It has bagged 12 clients so far in the US.
"India has a mature ecosystem, but it has become very expensive to operate here. You can run a great global startup from Chennai or Bangalore today because the internet has done away with the boundaries that existed. But if the costs in Bangalore are as high as the Silicon Valley and if retention of people is harder, it is not surprising to see many more companies choosing to move to the US to run a company in Silicon Valley itself," said founder Asif Ali.
Instamojo Inc. : Started in 2012, Mumbai-based Instamojo enables one to sell his/her digital creations like e-books, reports, photos, music, software, templates, graphics, plugins, etc., directly to their fans, friends and customers, These can be sold as downloads by simply sharing a unique checkout link. The company has bagged 4300-plus merchants/sellers, most of whom are from India, but an increasing percentage of the same is from international markets like the US, Canada and the UK.
"There is a huge scope of faster growth and easy access to venture capital in markets like the US. Besides, many of our key customers are in the US and we will soon open an office there," said Instamojo founder Sampad Swain.
WalletKit Technologies Pvt Ltd: It provides a platform for companies to integrate with different mobile wallets like Apple Passbook and Google Wallet, for creating, managing and delivering digital tickets, coupons, deals, gift cards, etc. The Chennai-based firm migrated to the US last October. "We launched here (US) in January this year. The US is the biggest iPhone market in the world and our key target customers are here. So we thought we needed to be here," said Kevin William David, co-founder and CEO of WalletKit.
Bitzer Mobile Inc.:
Freshdesk Inc : Set up in 2010, Chennai-based Freshdesk offers an on-demand customer support software and provides services like multi-channel social support (e-mail, website and social networks like Twitter and Facebook) for businesses. Unlike traditional BPOs, the company has tweaked the age-old concept of customer support help desk and made it a tool for marketing and branding, driven by an insight into customer satisfaction. "When we started Freshdesk, we decided to incorporate in the US because that seemed to be the best option for a SaaS company that wanted to handle recurring payments from international customers," said its CEO Girish Mathrubootham.
CipherGraph Networks Pvt Ltd: Founded in 2011, Bangalore-based CipherGraph provides enterprise cloud security solutions to small and medium businesses. Late last year, the company moved its headquarters from Bangalore to California in a bid to aggressively focus on the US market.
"Being a SaaS player, the global market has always been the focus," said CEO Jitender Sharan. "The critical mass for hi-tech startups is visibly missing in India (VC, early adopters and startups). The few ones that remain are typically started by people or are backed by people who have strong connects and internal sponsors. The ecosystem is not conducive to new players disrupting the market," he added.
Adepto Solutions Pvt Ltd :
emo2 Inc: Started in February 2011, the company builds hardware and software to bring inanimate surfaces (like a restaurant table) to life. Simply put, it has developed a multi-user-touch technology table top that can be used in a cafe, pub, lounge or a restaurant. It also launched emo2 Anywhere, a multi-user, touch-interactive operating system, as well as a cloud platform, at the Consumer Electronic Show two months ago. "We have shifted our primary focus from India to the US market, considering the scope there. Also, we can get better revenue shares (for ads) from US companies," said founder & CEO Mir Abid Hussain.
Also note, besides these firms, there are a number of geography-agnos
(Edited by Sanghamitra Mandal)