2015 is the year of startups for Hyd

At Hyderabad, the TRS-led government has created a sound ecosystem with the establishment of T-Hub, a unique partnership initiative between the government and the key stakeholders who are working in the startup space

Hyderabad: 2015 is the year for the startup boom in India in general and Hyderabad in particular. On the national level, ace industrialist like Ratan Tata and Infosys co-founder N R Narayana Murthy have joined the bandwagon of startup revolution in the form of angel investors and mentors; on the other hand, global investors like Alibaba and Softbank have stepped into the country, to partake in the boom.

At Hyderabad, the TRS-led government has created a sound ecosystem with the establishment of T-Hub, a unique partnership initiative between the government and the key stakeholders who are working in the startup space. The initiative was inaugurated by Ratan Tata, and the year ended with the visit of two global CEOs of IT majors – Satya Nadella of Microsoft and Vishal Sikka of Infosys.

Although, startups are expected to be unique, and engage in non-traditional businesses, the year 2015 saw a flurry of activity of startups on the e-commerce platform, giving traditional shopping marts a run for their money. According to estimates, the sector received a whopping $8.4 billion in investments in new ventures including e-commerce platforms, despite the analysts expressing their reservations on the ‘huge’ valuations.

According to trak.in, which compiled the data, deals worth $8.4 billion were signed in the year, compared to 304 deals worth $5 billion entered in 2014. The sector was dominated by e-retailers like Flipkart and Snapdeal, and the taxi-aggregators like Ola, which got dollar funding support from major investors like Softbank.

Interestingly, a debate had started over the high valuations of e-commerce companies. A former Infosys director who turned an angel investor, TV Mohandas Pai, points out that a ‘shakeout’ is likely in the sector in next two years, as these e-commerce companies are doling out huge discounts and cashback offers to customers for signing up.

Pai feels the startups would be able to create good number of jobs, but most of them will perish due to fierce competition. Currently, there are about 18,000 startups in operation; the number may exponentially rise to 1,00,000 in the next 10 years. But only about 10-20 per cent may survive and others may fall by the wayside.

According to experts, the year 2016 will be very crucial for the growth of startups, as the investors are now focusing on the valuation side. They opine that and sectors like financial technology, healthcare and enterprise technology etc would form part of startups. The focus may also shift away from e-commerce to newer areas including agriculture in the new year.

By KVVV Charya