Young and energetic India is attracting more and more Middle Eastern investors.
Edit: Yu Meng
Editor’s note: The author of this article Thimmaya Poojary, Sameer Ranjan Bakshi, Original title :Arabian nights and Indian startup dreams: Middle East investors eager to fund tech businesses
Going to the sea (ID: wow36krchuhai) Summary points:
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The economies of the Middle East are totally dependent on oil, but as oil prices fall, they want to enter a diversified new technology sector, and Middle East fund institutions are investing around the world
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There is a long history, business, political and cultural connection between the Middle East and India. India’s thriving entrepreneurial ecosystem and stable political situation have attracted many Middle Eastern investors
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Middle East investors are not only concerned with unicorns or high-value start-ups, but growing companies are also their investment targets
The thriving Indian entrepreneurial ecosystem has attracted many Middle Eastern investors | Image Source: Unsplash
Middle East investors are increasingly confident in the Indian entrepreneurial ecosystem and are actively providing financial support to companies of all sizes and industries. Five years ago, in 2014, the Gulf rich country Qatar invested in e-commerce giant Flipkart through its sovereign wealth fund Qatar Investment Authority (QIA), a move that fully reflected the Middle East’s interest in the Indian entrepreneurial ecosystem. Flipkart is one of the star companies in the Indian entrepreneurial ecosystem, and was acquired by global retail giant Wal-Mart in $18 billion for $16 billion.
A similar investment or acquisition plan is far from over, as government agencies and other funds in the Middle East will continue to invest in Indian start-ups such as Indian education technology company Byju’s and food recommendation platform Zomato. Both companies are now unicorns.
The Middle East and India have a long history, business, political and cultural ties. Today, there are many Indians in the Middle East who come to this job. The current rapidly changing economic reality has made the Middle East countries aware that important natural resources such as oil and natural gas have helped them dominate, but things have changed, so many countries in the region are looking for new investments and diversification. field.
The Opportunity of India
Vikram Gupta, founder and managing partner of venture capital firm IvyCap Ventures, said: “The Middle East is more interested in investing in India. In the past, investors in the region were more inclined to invest in the US and Europe. Now they turn their eyes to China. And India.”
According to Vikram, as the Chinese market is becoming saturated, he has shifted his focus to the Indian market. India’s entrepreneurial ecosystem is booming and the political situation is stable. He said: “Many people also understand that empty talk is not as good as practice. After investing in real money, there is almost no retreat, which in turn enhances their beliefs.”
Japan Softbank FlagThe first fund with a size of US$100 billion Vision Fund shows that Middle Eastern countries have a strong interest in venture capital, with Saudi Arabia and Abu Dhabi also participating in the fund. In fact, Saudi Arabia has invested $45 billion in the fund.
Recently, the unicorn Byju’s in the Internet sector in India announced a $150 million financing, led by the Qatar Investment Authority (QIA). QIA CEO Mansoor Al-Mahmoud said: “This investment highlights QIA’s commitment to investing in the education industry, and the best in the global TMT industry is our investment focus.”
Investors are still growing. After all, there are many unicorn companies, such as the fresh e-commerce BigBasket, the taxi software Ola and the take-away platform Zomato, which have already invested in venture capital funds and private equity firms headquartered in the Middle East. BigBasket has invested in Dubai-based private equity firm Abraaj Group; Zomato has received funding from venture capital firm Vy Capital; Ola recently received an investment from the founder of Dubai startup investment company Jabbar Internet Group.
At present, most of the venture capital funds in the Middle East are mainly from the UAE, especially Dubai. When talking about the reasons for these funds and sovereign wealth groups investing in the Indian entrepreneurial ecosystem, Exbality Ventures Chairman V Balakrishnan said, “The economies of the Middle East are totally dependent on oil, but as oil prices fall, they want to enter a new diversification Science and technology.”He said that these fund institutions are currently investing around the world, including India.
Not limited to unicorns
Investments in the Middle East are not limited to unicorns or high valuation start-ups. Investors in the region also invest in other growing companies such as tea box Tea Box, fitness application HealthifyMe, car rental startup Zoomcar, healthcare service platform Medtrail, local life service discovery platform Magicpin, logistics company Lets Transport and Digital books are used by Khatabook and others.
Kay Capital partner Navin Honagudi said: “The Chinese market seems to be saturated, and India has unlimited opportunities. In addition, the Indian market is Flipkart and F.reeCharge The two companies offer a very good exit mechanism, and OYO’s repo transactions also give investors the opportunity to recoup their investment. Venture capital has sprouted since 2008 and has been around for almost 10 years. But coming to Japan, there will be more opportunities in the future.
Navin added, “Like Chinese investors, Middle Eastern investors are also attracted to the B2C industry. American investors have different concerns and they are investing more in the B2B industry. ”
You can see their focus on the B2C field from the Zoomcar example. Zoomcar is a self-driving car rental startup, and one of its investors is Venture Souq, a Dubai-based investment fund.
Talking about Middle Eastern investors’ interest in the Indian entrepreneurial ecosystem, Zoomcar co-founder and CEO Greg Moran said: “In the past few years, this has become a trend. In addition to accepting a large number of Indians. The business relationship between the Middle East and India is also very close.”
He added that the lack of locally grown technology companies in the Middle East and even the unicorn companies did not allow investors to look for potential investment opportunities.
Greg said: “In addition, you have to see the size of the market and the population. Egypt has a population of only 99 million. But the combined population of Uttar Pradesh and Bihar in India has far exceeded the entire Middle East.
Two-way cooperation
At the same time, the Middle East not only invests in Indian start-ups, but also seeks to build partnerships to build its own technology-driven entrepreneurial ecosystem.
For example, the Bahrain Economic Development Board (EDB) wants to invite Indian companies to establish business in Bahrain to build strong links with the Indian entrepreneurial ecosystem.
Khalid Al Rumaih, CEO of Bahrain EDB, said: “The history of India and Bahrain is very close. The population of Bahrain is only one-thousandth of India’s, but about one-third of Bahrain’s residents are Indians. In the establishment of the ‘India-Pakistan Economic Corridor’, the annual bilateral trade volume between India and Pakistan exceeds US$1 billion.”
Indian start-ups in areas such as financial services, technology and information and communication technologies (ICT) are expanding into the Middle East, and EDB sees the infinite opportunities.
The Dubai Chamber of Commerce and Industry) The Dubai Startup Hub was also launched to attract Indian start-ups.
Omar Khan, Director of the Dubai Chamber of Commerce and Industry International Office, said: “We believe that in addition to traditional trade opportunities, India is very young and vibrant; young people here are good at solving problems. Dubai has faced economic and economic problems in the past few years. Geopolitical and other challenges. We believe that India can help us because young entrepreneurs in the country are very good at solving problems.”
According to Balakrishnan, many Middle Eastern investors invest mostly in Indian start-ups with financial goals, but it also provides them with a clear way to bring the right technology to their own country.
India’s entrepreneurial ecosystem has attracted the attention of investors from around the world, such as the US, China and Japan. Perhaps it is a good time to expand investment in the Middle East. As Vikram of IvyCap Ventures puts it, “Some family offices in the Middle East have personally contacted me and they expressed their desire to invest in Indian start-ups.”
