Facebook co-founder Eduardo Severin said India’s startup market is worth betting on, even though it is “a few years” behind China’s.
During a panel discussion at the Forbes Global CEO Conference in Singapore this week, Severin said his investment firm B Capital is deploying “many dollars” in India. And thinking about the long-term success of new companies there.
Asked why India’s startup ecosystem has not generated good returns, Severin said, “I think India is a huge market with huge potential.”
“And I think as the market matures, and as you get into a better economic environment, it’s a market to bet on together with Southeast Asia.”
Much of the growth in India will come from enterprise tech companies, Severin said, adding that B Capital has put money into electronic health records companies and contract management companies. Enterprise tech companies are those that create software that serves businesses.
2022 Forbes CEO Summit in Singapore
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India’s entrepreneurial success is based on its large population, and the country, along with Southeast Asia, will soon have more people than China, Severin said. He added that 25 million children are born every year in India.
Gautam Adani, an Indian billionaire and the world’s second-richest person according to Forbes, said in his keynote address at the same conference that “India is now on the cusp of creating thousands of entrepreneurs.”
Adani claimed that 670 of India’s 760 districts have at least one registered startup.
“Smartphones and cheap data, mixed with aspirations, make the most potent combination to transform a nation. And the journey to a digitally enabled India has just begun,” he said.
But Severin warned that the pace of evolution of startups in India lags behind China in areas such as asset exits and market liquidity.
India’s foreign direct investment in the first quarter of the year lagged behind that of China, according to an August report by India’s finance ministry. China received more than $100 billion in FDI, while India’s inflows were about $17 billion.
Investing in tough times
He added that when capital is limited due to a sluggish economy, as it is now, entrepreneurs must seize the opportunity to “build mission critical products.” The term “mission critical” refers to services and goods that are essential to the operation of a business.
“And I think that kind of environment creates resilient businesses and it’s really a time to invest, not pull back. So entrepreneurs will actually look at this as an opportunity to acquire, to bring companies in, while other people are looking inward. Aggressive and acquire and consolidate. ,” Severin said.
“And actually, some of the biggest companies out there, I think Microsoft started during the recession.”
Speaking at the Forbes conference, Jenny Li of venture capital firm GGV Capital, which has backed some of China’s best-known companies – including Didi Chuxing, XPeng and Kingsoft WPS – said it was time to look ahead to geopolitical competition. The upheaval caused by the pandemic in the U.S. and China and in global systems has led to a “major grind” on public valuations of companies.
“We’re happy, because I think as a private investor, we’re investing in the next generation of the next generation, the next three years, five years, 10 years. And so it’s really back to a more rational market. Real entrepreneurs who want to make a difference. ,” Lee said at the same panel as Severin.
Citing new areas for investment in the electric vehicle/autonomous vehicle (EV/AV) and metaverse industries, Lee said there are plenty of opportunities in tough times.
Severin, for his part, said that “climate technology” is going to be “huge” and that his company is doubling down on biotech.