Indian startups have been a hot market for the Chinese investors. Chinese giants like Alibaba, Baidu, Tencent, and Fosun have invested in over 30 Indian startups in 2017, investing a whopping sum of $5.2 billion.
The same set of Chinese giants pumped in $930 million in 31 Indian startups in 2016. The crazy figures don’t end there. The funding by Chinese companies in the first two months of 2018 has touched $1 billion. The funding decisions by Chinese companies shows that they are quite serious about business in India.
India’s leading startups like Paytm, Flipkart, Zomato, Ibibo, Hike, Ola, and Gaana have received a great amount of funding from the Chinese giants. Most of these investments are late-stage funding or private equity, minimizing the risks for the Chinese investors. On a very interesting note, the political tension between India and China has an impact on the business between the two countries.
A serial angel investor, Ajeet Khurana said, “On the one hand, increased Chinese investment into India is a clear indicator of the Indian opportunity; on the other hand, India needs to ensure that we aren’t surrendering our strategic interests in the region. Today, internal security issues are not restricted to military installations and high-value targets. Information security and network security issues are vital concerns. Any international participation in India should not have access to critical information that is crucial to national security.”
Experts warn the Indian startups to watch the fund inflow from our hostile neighbor. The concerns around security are growing after Alibaba-owned UCWeb was accused of stealing data from Indian users. In fact, the Indian army has warned its officers against using the pre-installed apps on China-based smartphone makers.
Sanjay Mehta, a well-known angel investor said, “Indian investors and large domestic corporates should step up support to local start-ups. It seems Chinese investors are more bullish on India than Indian investors. This needs to change.”