Recently, Mr Sumant Mandal, managing partner at US venture investor, March Capital said that China’s crackdown on its technology industry will turn the attention of global investors who seek to invest in emerging markets towards India.
Chinese regulators are putting a leash on its unruly internet companies under a campaign that maps everything from gaming to “money worship” companies.
Mandal also said this news has forced foreign investors to put more weight on the potential government risk of geopolitics and regulatory scrutiny on tech businesses while assessing their investments.
How can it be good news for Indian tech companies?
Indian tech startups have been showing stronger growth prospects in areas like the internet and cloud software, that too without a similar risk profile.
Yes, in terms of size, India’s internet industry is far behind that of China’s. However, the new billion-dollar startups and series of Initial Public Offerings (IPO) make the Indian technology market look good to investors. Mandal said, “China’s market is of a size and scale that is unmatched, but the risk-reward structure around China has changed”. This makes investors from the US, Europe, Asia, and the Middle East want to reroute their investments towards India so as to balance their portfolios.
March Capital plans to increase its investments in Indian startups. Mandal talks about how coronavirus has changed the Indian consumer behaviour which proved to be a boon for companies handling e-commerce and digital transactions.
Mandal leads March’s investments in areas like Software as a Service (SaaS) and blockchain technology and said that more than 2 dozen Indian startups have moved to the US and garnered hundreds of millions of dollars in revenue by winning the global consumers over.