After a lacklustre 2022, this year could bring cheer to the homegrown startups as Japan Inc is chalking up big plans for India. Several Japanese behemoths including Suzuki, Toshiba, Toyota and Denso among others have already started collaborating with Indian startups, especially in the new growth areas that include health-tech, digital infrastructure, renewable energy.
Takashi Suzuki, Chief Director General (South Asia), Japan External Trade Organisation (JETRO) told India Narrative that a substantial chunk of Japanese funds is expected flow into the Indian startup ecosystem this year.
In 2022, Toshiba Software in collaboration with Japanese Venture capital fund Beyond Next Ventures (BNV) chalked out big plans for India with the aim of dealing with social issues. Toyota Tsusho, a subsidiary of the Toyota Group, has already invested in Droom Technology, India’s largest new and used car marketplace, and Super Highway Lab, a medium to long distance bus app. The company covers a wide range of businesses from used car sales to recycling. Tokyo based Sojitz Corporation too invested in Intelligent Retail. The list is long.
“Our main focus outside Japan is on India which consists of 20 per cent of our portfolio. We see the current situation in India as very similar to Japan’s early-stage high economic growth. Young demographics in Japan then and in India now feel that the “onus is on them to solve social and business problems and not leave it to large corporations,” Mayur Shah, Head – Business Development, BNV (India) told India Narrative.
BNV has already invested about $22.6 million in Indian startups and is now gearing up to raise the next fund.
Additionally, the Narendra Modi government’s push to support the country’s startup ecosystem has also caught the attention of VC funds across the globe. “The low capital requirement to enter the business and the ability to scale on account of the large and early adopter market gives Indian start-ups a distinct chance to create industry standards,” Shah said, adding that BNV helps these companies not just with investments but also with Japanese corporate connects for mutual growth with scale.
Notwithstanding challenges for the startup ecosystem in 2022, 21 startups turned unicorn in India compared to seven in China. However, in 2021, 44 startups turned unicorns.
According to Inc42, Indian startups raised Rs 25 billion in 2022 despite economic uncertainty — a 40 per cent decrease from the Rs 42 billion raised in 2021. However, capital inflows were 2.1X higher than in 2020, the website said, adding that the year 2022 saw an increase in venture capital investments outside of the top three startup hubs of Bengaluru, Delhi NCR, and Mumbai, with emerging startup hubs witnessing a 41 per cent surge in funding.
Earlier, SoftBank Group’s founder Masayoshi Son had expressed confidence over India’s future saying that he believed in the passion of the country’s young entrepreneurs.
“India will be great..There’s a bright future. I tell young people in India let’s make it (innovation) happen. I would support,” Son had said while addressing the InFinity Forum organised by International Financial Services Centres Authority (IFSCA) and Bloomberg in 2021. “I believe in the future of India. I believe in the passion of young entrepreneurs in India,” he said, adding that Softbank has invested about $14 billion in India in the last decade.
Also read: Japanese majors pivoting from China to India as land of opportunity– Takashi Suzuki