India Development News & Foreign Investment Opportunities

Indian Startups need a Billion-Dollar Fund support

Japan works on $200m Fund of Funds


Japan works on $200m Fund of Funds


Singapore FinTech Festival
Singapore FinTech Awards (Picture Singapore Fintech Festival 2019).

The fast-expanding Indian start-ups, poised for exponential growth globally over the next three-five years as deep technologies drive futuristic business models, need support of a billion-dollar fund of funds from Singapore-based investors.

This view was shared in a market perspective by two IT stalwarts, Girija Pande and T V Mohandas Pai, who pointed out that Japan, constrained in developing domestic start-up eco-system due to a stagnant economy, is working on a US$200 million fund of funds for investments in startups in India.

As such Singapore will be the force multiplier for India, having already a number of technology-tie ups. “We want much more investment in startups from Singapore,” said Girija Pande, Chairman of Apex Avalon Consulting who currently mentors four Indian start-ups in deep technology from Singapore.

Singapore is already a first choice for Indian startups to raise capital and expand globally, according to Pande.

Technologist and Venture Capitalist Mohandas Pai sees good potential in Singapore and Indian partnership in building start-up eco-system.

Pai called for a Singapore billion-dollar fund of funds for investments in at least 1,000 start-ups in India, which has a spread of over 40,000 startups with 5,000-6,000 startups joining the industry every year.

“By 2025, we will have 100,000 startups and create USD500 billion of value and employ 3.25 million people,” said Pai, chairman of Manipal Global Education who spoke at the Singapore FinTech Festival held 11-15 Nov 2019.

India is expected to have 100 unicorns, up from 34 as of now, 18 of which are registered outside India for ease of raising funds from global markets, according to Pai, a former director for Infosys.

While the startups, especially FinTech companies, want the Indian government to relax current foreign exchange control for ease of raising international funds, a large number of them have relocated to Singapore for raising capital from financial markets and ease of structuring, according to Pande, a former Asia Pacific Chairman of Tata Consultancy Services.

Compared to India’s still rigid business regulations, it is easier to operate out of Singapore, set up subsidiaries globally and raise capital from international financial markets, Pande pointed out.

Both Pande and Pai sees the Indian IT industry growing from software services hub into a large base of manufacturing unique IT products for global markets.

In three to five years, the time taken to develop an IT product, India will be producing some very interesting products in new technologies.

“We see that as a growth area with startups mainly creating these new global products,” believes Pande.

India produces 800,000 engineers a year, with top 20 per cent becoming software engineers. The average age of Indian software engineer is 27 and is trainable in Artificial Intelligence and Machine Learning, said Pai, dismissing notions that future software programs will be created by AI and ML, replacing human beings.

Indian IT industry will remain competitive with a large number of engineers joining every year in a small domestic IT services economy.

Pai rules out competition from China which has a large IT industry but just about copes with a large domestic demand and a strongly growing economy.

The US is the world’s largest IT country with a mammoth economy and demand, but it is short on skilled engineers, according to Pai, who pointed out that every two in six US-based engineers are from India.

“India clearly dominates this field and will keep dominating. There is no other country that can match India in software skill,” Pai said at the FinTech Festival, attended by 43 Indian companies, the largest group from one country.

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