How Chinese Rule Indian Startup Ecosystem And Control Our Economy.
There has been a round of news going on about ‘The Great Indian Start-ups’. Nine out of every ten Indian start-ups fail because of a lack of innovation or having a copy-paste model. The one that survives usually goes big after pitching to the VCs. We have never thought about the stats for the same. Majority of the Indian start-ups are funded by the Chinese. What is Indian, isn’t actually Indian.
Indian start-up ecosystem is the third-largest in the world and is very attractive with new opportunities spreading all the time. There have been numerous global players who have tried to invest here and have succeeded. These investments always come with the agenda of having the ultimate rule or to be present in every sector. The amount of money the Chinese invest is remarkable they have invested money even during the adverse times of the economic recession of 2008. Till 2014, there was about US$1.6 billion investment amount in India from the Chinese government and companies. Surprisingly, in the next three years, it rose to at least US$8 billion. This shows that they saw something significant in India and went forward with it. This rising effect has been going on to date. Even with the new FDI laws, the investment made by the neighbouring states needs to be monitored, not stopped.
China, the ultimate ruler of technology has our nation literally in its hands. it may seem practically impossible right now but the reality is that the Chinese own major part of the Indian start-ups. It seems as if the illusion of the Indian start-up ecosystem is only possible when we have some funding from the Chinese. Indian market is huge and if given an appropriate amount of efforts, time and money, it can flourish a lot. We take the examples of various companies like flipkart, swiggy and tiktok. These brands flourished in a very short amount of time. More than 2/3rd of the Indian unicorns are sponsored by the Chinese. In the last quarter of last year, deals involving Chinese investors totalled a record $1.4bn.
When it comes to technology start-ups, Indian firms have the Chinese as their godfather. There have been about $4 billion of investments in the tech sector by them. Since the onset of the virus, there has been a major change in the Indian education sector. Students have shifted to online education and apps like Byjus are a total hit right now. If we think about the origin of bjyus, it is definitely an Indian app and it will always be called Indian. But the biggest factor here is that byjus has a major role of the investors from abroad. China’s Tencent Holdings Ltd has a significant holding value in the online education application which is being used by majority of the students right now.
If we look at the rental car segment or the cab segment in India. We all think about our own domestic company, Ola. It is safe to say that Ola is like mini uber. Ola here has about $400 million investments from the Chinese. Slowly and gradually this amount will keep on increasing and it will lead to a point of no coming back.
When we look at our home country’s Flipkart, we all were extremely proud of it and the work it is doing in the country. But did anyone know that Tencent had initiated a $1.5-billion funding in it?
The chatting platform made by our country and its entrepreneurs; Hike has $175-million investment done by the Chinese companies. The amount of propaganda which is done in the name of ‘supporting start-ups’ seems to be a hoax now. If the major stake in Indian start-ups is of international bodies, what is left for our own government for the aid? Nothing.
So, the bitter truth here is that no matter what we do, whichever rule we pass, the Chinese have already come up in our market and are having us one way or another. Through Paytm, they have our bank account details, every minute recharge details that we do and what not. Technically speaking, the Chinese also know which sim card we use and which chocolate we eat. They know everything.
There are two major players who are running the Indian start-up scenario. One is Alibaba and the other one is Tencent. Alibaba along with its affiliate has invested in at least six Indian major start-ups and out of those six, five have become unicorns. When we talk about the other investor, Tencent, they have invested in twelve Indian major start-ups and seven out of them are unicorns.
Tencent has also bought a stake in Policybazaar for $150 million. Which means that whatever happens to us, to our cars, to our families and is covered under the insurance, everything is under Tencents scrutiny.
The major reason for all these investments is that the Chinese follow the model of- plus one. This model basically means that shifting or expanding operations out of China to benefit from cheaper labour, new markets, and less domestic vulnerability.
There have been a few issues associated with this. Data leakage is a major issue with comes with the investments that the Chinese make in the Indian companies. In 2016, questions were raised on Paytm about the data security of the users to which the spokesperson said that Alibaba has a stake in Paytm but it is originally an Indian entity only. Even if there have been privacy issues and data breach issues, there have been times when the companies have stepped forward and have told that the data isn’t shared. But the fact is that we are so spellbound and tech-savvy, all our data is actually with someone. From the most sensitive information to the most useless one. We are all under someone. And guess what? It would have been better if we were under our own domestic people. But the reality is that there are extremely less fully-owned domestic firms.
All these investments come with a positive and a negative. But one thing is for sure, we aren’t India anymore, we are ultimately under someone who is running everything in our country.
