B2B TECH STARTUPS FUELED BY FUNDING AND ADVANCED TECHNOLOGIES
India, Mumbai, May 07, 2019: NetApp, a leader in data management and hybrid cloud, in partnership with Zinnov, a global management consulting firm, today announced the results of their first-of-its-kind study titled, ‘B2B Tech Startup Ecosystem and Role of Corporate Accelerators in India’. The study provides data-driven insights into the growth of B2B tech startups and the upsurge in both funding as well as the corporate accelerator programs in India over the last five years.
According to the report, B2B tech startups have more than tripled (from 900 to 3200+) since 2014. This can largely be attributed to the spurt in the need for digital transformation of enterprises, financial institutions, hospitals, government, SMEs, etc. Adding fuel to their success is the growing investor interest - the investment in B2B startups touched US$3.7 billion in 2018, a steep rise of 364% from 2014.
Commenting on this trend, Sanjay Nath, Co-Founder and Managing Partner at Blume Ventures, said, “The B2B startup wave in India has just begun. Corporates are more open to collaboration with startups, VC firms are more interested in the B2B startup world, and technologies like AI and IoT have proliferated faster into the B2B ecosystem, compared to B2C. This holy combination of corporate support, B2B focused VC funds, and rise of advanced technologies will drive the wave forward.”
The report further unveils that 70% of these B2B tech startups are in the space of enterprise tech (41%), fintech (19%) and healthtech (9%), with software as a service (SaaS), customer relationship management (CRM), alternative lending, expense management, medical internet of things, artificial intelligence enabled predictive platforms being some of the other segments.
Advanced B2B tech startups dabble with 3D printing, blockchain and robotic process automation
Segregating over 800 of the B2B tech startups as ‘advanced tech startups’, the study indicates their YoY growth at 60%, much ahead of the 20% number for the entire tech startup space (B2B, B2C). More than 76% of the tech share belongs to the top trio: Data Analytics, Artificial Intelligence and Internet of Things. Other futuristic technologies such as blockchain and 3D printing are not just being adopted by enterprise tech, but also fintech, health-tech, industrial-tech, clean-tech, manufacturing and nanotechnology.
Corporate incubators and accelerators are emerging as the backbone of startup tech
Currently, there are over 50 corporate accelerators and incubators in the country, focusing on technologies such as AI/ML, Big Data, Cloud, Blockchain, Cyber Security among others. These include the likes of NetApp, Cisco, Target, Intel and Swiss Re. While global accelerators hold a majority with 66% of the share, 34% of the pie comprises of Indian companies. Varied in their philosophy, the accelerators have an aim to offer support in the form of market access, mentorship, investor connects and access to product platforms.
Alluding to the vital support that corporate accelerators provide, Ajeya Motaganahalli - Senior Director and Leader, NetApp Excellerator, NetApp, said “It is encouraging to see the entrepreneurship explosion across the startup universe. At NetApp Excellerator, we’ve facilitated numerous go-to-market opportunities, helped startups secure several million dollars in funding and have formed 7 global strategic alliances in the two years of our operation. This shows the credibility that the accelerator programs can add to such startups”
Favourable conditions that make India a hotbed for B2B tech startups
Bangalore is the top city for B2B tech startups followed by Delhi NCR and Mumbai, all accounting for about 60% of all B2B tech startups. Presence of huge number of MNCs, access to technology, extensive talent pool, plus a strong presence of incubators and accelerators are key to the consistent startup growth in Bangalore (800+), whereas top institutes like IIT Delhi and Delhi University have fostered startups in various verticals across Delhi and NCR (550+). Mumbai (400+) being the financial hub, is home to the largest fintech startups. With flexible economic policies, state government support and access to various industries, Hyderabad, Pune and Chennai accounting for 500+ startups collectively are posited as the growing startup hubs of the country.
Pari Natarajan, Co-Founder and CEO, Zinnov, said, “There has never been a better time to be a technology entrepreneur in India than now. The incredible rise in the number of B2B startups as a percentage of the total tech startups from 26% in 2014 to 43% in 2018, is a testament to this. Our study found that funding chances increase by 3X after startups graduate from an incubator/accelerator. An intense growth of accelerators and incubators is the much-needed shot in the arm for Indian startups to spread their wings across the length and breadth of the country, encouraging tier 2 and 3 cities to come up.”
“Businesses require new age data-driven technologies in order to stay ahead in the competition curve. We will continue to provide innovation centric mentoring to help new age startups maximize their potential for business globally,” concluded Ajeya Motaganahalli.