‘If Startups Figure It Out In India, They Can Translate Learnings To Emerging Markets As Well’

Presently, the European Union (EU) is one of India’s largest trading partners and foreign investors. But the relationship is constantly evolving. Lately, the EU is also working on deepening this collaboration further by bringing startups from Europe and stakeholders from India together through The EU-India InnoCenter, an initiative funded by the European Union’s research and innovation framework programme Horizon 2020. It is paving the path for high-impact and unique tech startups (Series-A funded) to explore, enter and scale in the Indian market. 

Since InnoCenter's onset in 2021, the project has screened over 400 European startups based on their stage of development (post series A funded), annual recurring value (>USD 1 million), growth rate (>30 per cent YoY), and defensible IP in India. The shortlisted startups have a strong potential and commitment to grow in the Indian market. So far, the EU-India InnoCenter has matched more than 40 European Scaleups with over 280 Indian companies and India-based MNCs like Mahindra, Reliance, Adani Ports and Logistics, ITC Limited and more. These startups come with a focus on sustainability-tech, deep-tech, logistics, and mobility that will enhance the emerging tech talent pool while diversifying the technology outlook in the country.

BW Businessworld’s Rohit Chintapali recently caught up with EU-India InnoCenter’s Programme Head, Juliane Frömmter, to know more about the initiative’s experience so far. Read on for excerpts from the interview. 

What makes India attractive for startups from the EU?

It’s commonly understood outside India that the country plays a key role in solving some of the global challenges that we are facing today. Sustainability is a huge part of this. India also has a prime role in bridging technologies that come from Europe, Australia, the US and some of those countries that invest heavily in R&D and have a very diversified academic portfolio. 

What we are bringing to the table is high-tech. That's what we are trying to focus on. We look at areas where there is high IP, relationship with academia exists. What may not be as fully understood in Europe is the kind of business models that markets like India need. But if you figure it out for India, then you can translate it for other countries that are emerging markets like Southeast Asia, Africa or even South America. India is fantastic for that. 

The funding winter is here and there are grave signs that point to a potential recession. What kind of effects are you seeing in the EU due to this?

In the last three to six months, we have observed that some startups are stepping away from participating in the programme because they want to focus more on their business or they are not able to raise their next round as fast as they would like. This means that they may not be able to hire their next batch of people or have all the money available that they may have anticipated for a market entry in India. This affects us. On the other side, I would say Indian finance minister has prominently said that the country is very unlikely to face recession. So, this becomes a good selling point in many ways as well. It is working both ways right now.

What kind of EU-based startups have found success in India? 

It is still early days to speak of big success stories. Some startups we work with are into sustainability tech and they are relatively young in Europe too. But sustainability is an important problem to solve not just in Europe but also in India. We are seeing some products that have scaled to a degree. This scale of the company in home market plays a crucial role in fast adoption here. Let me give you two examples. There's a company called Proglove, it was able to secure six pilot opportunities within one to two months and they translated into actual pilots here in India. Then, we have CAST AI, who have 65 employees in various countries. They have already scaled into various geographies before and you can see how they have a very professionalised sales approach that can actually help them scale in India very fast.

Maturity plays a huge role in the speed you can actually progress in India. And we are lucky to see that the majority of startups across our programmes intrigue us. 

What stage are these startups that come under your radar?

We prefer companies that are post Series-A. They have traction in the home market and preferably find traction in other markets as well. If they have internationalisation experience, that’s great because they have certain understanding of diverse scenarios in different markets. This applies if they move from Germany to France, but this is important even more when they are looking at India as a market.

Don't you think that EU-based startups which are trying to enter India could experience a pushback from customers or increased competition or barriers from government's perspective?

In general, I agree with you. But I wouldn't say so entirely. There is a huge focus on ‘Make in India’ but on an individual level it's all about the solution. If you have a value proposition that is well-formulated and targeted at the problems in India, and if the solution is different enough from anything that comes from within the country, then people are also willing to pay a premium.

Also Read: ‘Startups Need To Consider Businesses With Strong Entry Barriers’: Lead Angels Network Director