Investing in India – 6 trends to watch in a growing startup space

India has fast-emerged as a startup nation, attracting international attention and an influx of investor capital over the last few years. Now, its startups are coming of age and claiming their place across competitive markets.

As investors focused on this space, we know three things are increasingly true:

1. Funding is still flooding in and driving up valuations.
2. New startups are quickly cropping up to capitalize on the cash.
3. Our job of picking the most promising among them is more difficult than ever.

But in the exact same vein, we also know – there has never been a more exciting time to invest.

So far this year, Elemential Labs has taught me about blockchain deployment and governance, CoinDCX has expanded my mind about cryptocurrencies, and a yet-to-be-announced fintech company has taught me how UPI is the win that merchants and customers were waiting for.

Through AngelList India, I’ve been able to invest in companies solving all sorts of problems, but often what stands out the most is the raw passion driving their founders forward. They are capitalizing on an important moment in time and changing industries around them as they grow.

While I continue to hunt for innovative teams that have something new to share with the world, several trends and investment opportunities stand out:

Vernacular ?

This is the most talked-about trend in India because of its potential to bring a new wave of users online. Focused on individuals who have internet access and mobile data, but who are not primarily non-English speaking users, vernacular startups will help businesses cash-in on a broader audience.

eSports and Real-World Gaming ?

eSports and real-money games have become black holes of customer engagement. Frontier technologies like AR and VR have created extensive gaming communities that are able to connect our digital and human worlds (think Pokémon GO). Popular online games like Fortnite can capture a user’s imagination and drive revenue with in-game purchases. Both trends reveal opportunities for Indian gaming to move upstream.

Live-Streaming and Engagement ?

We’ve seen this play out with multiple Chinese startups, like Bytedance, that are now flourishing business empires. In an age of short attention spans, live gaming companies like HQ Trivia have found success by developing dedicated audiences around bite-size amounts of entertainment. Others that follow the model will be important to watch.

Social Commerce ?️

Group buying, earning referral discounts, and inviting friends are all huge trends in the small-ticket commerce space. China’s Pinduoduo is a standout example and has dispelled the notion of any popular space being too saturated to enter – and succeed.

Indian fintech ?

Aadhar, India Stack, and National Payments Corporation of India have all unleashed a series of public-good APIs, creating new opportunities for the Indian economy to leapfrog the competition. Companies can build on top of these technologies and dedicate more of their time on improving UX.

Direct-to-Consumer Brands ?

Deepak Shahdadpuri’s Twitter thread explains this best. I’d also keep an eye on biohacking products like Soylent, HVMN, and others that focus on the future of food and nutrition.

As part of AngelList India ✌??, I am happy to connect you to the smartest sources of capital if you have something interesting to share.

So, what are you going to teach me today?

Utsav Somani is a Partner at AngelList India. You can reach the author at @somani_utsav. Thanks to Emily Inverso for making this read better.

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