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  /  DxPx Blog   /  Startup jungle in India

Startup jungle in India

The Indian diagnostics market holds a wide range of different segments, is rapidly growing and very price-sensitive. Various types of product solutions find space to flourish and expand, especially if they are user-oriented, i.e. affordable and usable, have a good user experience and are of high quality. Also, aspects like accessibility, distribution, storage or local conditions like extreme weather conditions need to be considered depending on the product. International LifeSience companies have good chances to enter the market but their technologies might have to be modified to really fit the Indian end-users needs and local framework mentioned above. To find out about those conditions (user) research is the main core but as many companies and startups don’t have time to invest into this or the access to such knowledge is limited, collaborations with Indian partners can be very helpful to fill this gap.

 

India came a long way from a third world country to a newly industrializing country with a strong competitive economy and a lot of innovation potential.

It is estimated that by 2030 it will have almost climbed to the top of the global Internet market, and its per capita income will have doubled by 2024. The health sector in particular is one of the fastest growing. In 2022, the IBEF (India Brand Equity Foundation) expects this sector to reach 372 billion US dollars, making it one of the most important markets for high-end diagnostic services worldwide. Germany therefore has a strong interest in India's growing domestic market, which generally grows by more than 7.3% annually and serves 1.3 billion people. It is India's largest European trading partner. However, small and medium-sized enterprises in particular are reluctant to invest. The reasons for this are the domestic bureaucracy, the poor infrastructure, complicated labour laws, lack of expertise among employees, high taxes and corruption. Nevertheless, Germany ranks 7th among direct investors. Between 2000 and 2017, German companies provided around 9.7 billion US dollars for this purpose.

 

The Indian startup scene

Indian startups are just getting started and yet have already grown to 40.000, of which around 7.500 are from the tech sector, which has a major influence on the diagnostics market worldwide. A shortage of resources can be identified here as a primary trigger that drives individual players who try to close gaps in the everyday lives of the population and in individual industries. Here particular attention must be paid to the health sector, which requires massive improvement. The characters described are referred to as ‘Jugaad’, which means that they hold the specific Indian spirit of innovation: creative, solution-oriented and oriented to the country's difficult premises. Not long ago, pioneers such as Binny Bansal (Flipcart), Kunal Bahl (Snapdeal) and Bhavish Aggharwal (Ola Cabs) created space for social recognition and the courage to do the same. Courage because in a country like India, which does not yet have the status of an industrial nation, self-employment is associated with considerable financial expense and high risks, which are not comparable to the already exhausting startup conditions of Western nations. You also have to be able to afford courage here – India is still a caste system in which you are still stuck economically. But security is also important for wealthier people who have often studied abroad, worked internationally and then set up their own business. Perhaps this is why the actual potential of ‘Jugaad’ was initially limited. In the beginning, solution concepts were often simply imitations of successful concepts or products abroad that were transferred to the Indian market. Supporters in the early phase of the company's foundation often come from their own private circles, even though incubators and accelerators (I&A), usually located at colleges and universities, are slowly multiplying. Indian diagnostic startups include e.g. ‘Bagmo’, which specialized in the shortage of blood in India's rural areas. Here, high-tech saves lives. ‘Bagmo’ has developed a blood monitoring device that monitors temperature both during transport and storage. ‘Prantae Solutions’, a biotech startup, was born out of the personal involvement of founder Sumona Karjee Mishra, who suffered from a pregnancy disorder called preeclampsia. In order to help other patients, the startup focuses on diagnostic developments in the field of pregnancy health. Another one with the same health focus is ‘Janitri Innovations’. ‘EzeRx’, on the other hand, specialized in non-invasive technology solutions for the early detection of chronic diseases. Against the background of such highly competent user-centered developments investment in startups is on the rise. In 2018 (up to and including September), 4.2 billion US dollars were invested here.

 

German-Indian partnerships

German partnerships can also be found here, including the German-Indian startup exchange programme GINSEP (founded by Dirk Wiese) of the Bundesverband Deutsche Startups e.V. (Federal Association of German Startups e.V.) (Startup Association), which was launched in 2017. In order to successfully build bridges, GINSEP has set up the Go-to-India Market Guide (http://ginsep.co/go-to-market-guide-india/), which is intended to make it easier for representatives of both countries to enter the Indian or German market. An example of a successful partnership in Tech is ‘Grey Orange’, which has specialized in warehouse robotics. The founders Samay Kohli and Akash Gupta joined forces with Wolfgang Höltgen. While the robot ‘AcJut’ was developed in India, the idea of automation in the logistics sector originated from Höltgen and ultimately allowed the company to flourish through appropriate investment on his part. Another example more general is ‘Educaro’, a German startup (founders Christian Sassin and Leon Schneider), who dared and made the leap to India. Not without difficulties. Bureaucratic and legal hurdles stopped them massively at the beginning, which is why they recommend other newcomers to take the time to get to know the country, the people and the market directly on site and to build up a good network. In the end, they found support for their interests above all from the German-Indian Chamber of Commerce and the German Consulate General in India (Bangalore). The Local Representations of the Federal States were also very helpful. He also said that it was wise to establish a network of contacts in Germany with already successful German startups in India. A German diagnostic startup that also took the leap is COOLAR (founded by Julia Römer), which develops medical cooling systems based on solar heat to overcome the lack of electrical energy and the difficult weather conditions in rural India.

 

As pointed out the Indian startup scene is on the rise – generally and regarding to LifeScience. Valid support is close at hand and more and more tangible. It is to be summed up that it is most important to invest a lot of time in planning, preparation, building and expanding relationships and on-the-ground research. Following these principles, the stars will be favourable for a new beginning on the Indian market.

 

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