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Betting On The Winning Horse - Google To Invest In Indian Startups

19 Feb, 2017
Betting On The Winning Horse - Google To Invest In Indian Startups

In order to survive, a company has to continually find greener pastures. Even if that company is Google!

And, Google has always been one of the best scouts for potential growth opportunities. Forever searching for it’s next big canvas, there’s practically no corner of the globe that Google doesn’t probe for avenues to invest in, or get involved with.

And India’s been big on Google’s radar for many years now.

Now, there’s something interesting on it’s scope, and Google seems to be moving in.

According to three sources directly involved with the matter, Google has begun scanning India’s startup and venture capital horizon. Intentions seem to be to head into some acquisitions – a first for India.

India has been one of the most trusted technological and customer pools in the world for almost a decade, it is filled with potential. With its growing population that are touted as the next billion internet users of the world, Indian startups are in a business sweet-spot.

And as a direct investor or acquirer, Google is looking for companies it can play Big Brother to, and guide towards an even more infinite future than the startup may have envisioned.

According to one of the sources, ”Two major areas of focus for them are products for the next billion users and acqui-hires in high-tech areas”.

Although the source quickly added, that a transaction is not imminent yet.

Another source, an investor, added that Google with its almost unlimited potential to invest, was highly unlikely to invest in consumer-internet companies such as online retailers.
That actually is quite logical, given that online retailing is one of those business where there is already a presence of competitors such as Amazon and Flipkart. Investing in any other online retailer would be a highly risky and potentially dead proposition.

As part of building its Indian base, Google recently hired Seema Rao (who was a Vice President at investment bank Avendus Capital) to lead corporate development, or the acquisitions and strategic investments department in India and Southeast Asia.

As a developing nation, India offers an almost carte blanche opportunity to the company. Google would be surely looking to tap the investment potential of small cities and towns, where a major share of the internet base resides.

According to the sources, who didn’t wish to be named, given that the strategy is still in its nascent stage, the company could be making a major bet on strategic investments and/or acquisition of technology-enabled firms in the financial services, healthcare, education or mobile utilities sectors.

Education and healthcare are one of those two areas, where a major investment is much needed. The state involvement in these two sectors, in terms of monetary value is quite lacking, and a potential investment from Google might just give a new lease.

As for the aqui-hires, where the company buys another not for its monetary assets but its employees, Google might be hiring cyber-security startups and cloud computing.

Google has, over the years emerged as one of the most predatory companies in terms of acquisition – it’s already acquired more than 70 companies via it’s venture capital surrogate, CapitalG (in fact, CapitalG which was in the news recently, for financing 15 million dollars to education technology startup Cuemath).

Yet it (Google) is still to acquire a single startup in India. But we’d like to think that that’s because Google was busy wrapping up other countries before it got to the Big Mamma that is India.

India already accounts for the largest number of users in terms of Android and is a key test market for Youtube offline, hence Google already knows to respect us!

Well, the economy and most definitely, the startup ecosystem could do with professional entities investing time and effort into this fertile space, because there are more nuggets here, than are duds!