India is undoubtedly one of the hottest markets for investors given its growth potential. According to Inc42 's ' State Of The Indian Startup Ecosystem 2018 ' report, the country currently has 26 unicorns (the third-highest in the world after the US and China) and many more are in the making - an indicator of how well its startups are doing.
While Indian entrepreneurs and investors are leading the charge of the startup brigade, fund infusions and the rising trust of international investors in India have gone a long way in shaping the ecosystem. Investments in Indian startups by foreign private equity and VC firms increased 96% to $16.73 Bn in 2017, an amount double that of 2016, with Japanese money accounting for $8 Bn investments in the period 2014-2018.
Among Japanese investors in India, Softbank has been one of the most prolific - both in terms of reputation and scale - having made investments in the likes of Flipkart, Ola, OYO, Paytm, Snapdeal, InMobi, and Grofers. Many of India's successful startups have Softbank on their boards, which is also a marker of the strengthening relationship between the Indian startup ecosystem and Japanese investors. Other Japanese investors in India include Rebright Partners, Dentsu Ventures, and Mistletoe Inc.
Given the growing symbiotic bond between India and Japan, Inc42 hosted a panel discussion entitled 'The India-Japan Connect' at the recently held The Ecosystem Summit in New Delhi. The panel examined the existing opportunities between the two nations and how their ecosystems can benefit from them.
The panel brought together well-known names from both India and Japan - Hiro Mashita, director, M&S Partners; Hirokazu Nagano, president, Klab Ventures; Milojko Spajic, founding partner, Das Capital; Takeshi Ebihara, founding general partner, Rebright Partners; and Mayank Shiromani, VP, Recruit Holdings. Rajesh Sawhney, founder of Innerchef, was the moderator for the talk.
Mashiatsa spoke about the time when he was contemplating investing in India back in 2015 and found many reasons to do so, like its population demographics, talent, etc. He remembers being especially impressed by the Indian government then and added that the impression has continued in the following years as some of the bottlenecks for Japanese investors like visa, tax issues, etc, have been smoothened out.
The panellists concurred that the increasing interest of Japanese investors in India was a result of their growing confidence in the Indian economy - which is going strong - and the ongoing policy reforms in the country. They pointed out that an increasing number of Japanese corporates are acquiring startups - whether directly or through their venture capital divisions - motivated by these factors.
The panel also lauded the Indian government's initiatives, such as the India Stack, a set of APIs that enable development of payment apps and the unified payments interface (UPI), as exemplary.
The quality of founders is unprecedented and if you talk about UPI and India Stack, it shows that the government is not afraid of doing things that no else is doing in the world, said Milojko Spajic, founding partner, Das Capital