Here’s How Chinese Companies Are Helping Indian Startups Flourish

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During the early days of the venture capital boom, money flowed into India from all parts of the world. However, funding started to reduce as the startups started growing and demanding greater funding.

However, over the past couple of years, there has been a revival largely driven by the likes of Japanese investment behemoth SoftBank and Chinese internet giants Alibaba and Tencent.


Data courtesy: TechCircle

From e-commerce to online travel and education to healthcare, the Chinese investors are now everywhere and have been steadily increasing their influence over India’s internet companies.

These investors are often consumer internet companies themselves.

Experts claim that although online grocery startup BigBasket is backed by Alibaba, they possibly intend to acquire it at some point in time.


Data courtesy: TechCircle

In most of the cases, minority stakes are involved and the Chinese investors do not get a seat on the board of the concerned startup. In some cases, the investors hold a large enough stake to influence decision-making. Digital wallet firm Paytm is among the few startups where a Chinese investor – Alibaba in this case – has a commanding majority.


US companies investing in India

Global tech giant, Microsoft has turned its interest towards Indian startups after a long gap, as has been reported by the media. The company is planning to open up an office in the country and invest in Indian tech startups using new age technologies like autonomous vehicles, Internet of Things (IoT) and Blockchain.

Global Cloud services platform Amazon Web Services (AWS), a subsidiary of Amazon.com, has started with this plan to prepare an industry-ready workforce and nurture start-ups in the country. The company is working very closely with the entire accelerator and incubator space in India.


Should we be concerned?

The Chinese involvement is not limited to investment, with several apps and mobile games from the likes of Cheetah Mobile and Alibaba also flooding the Indian market.

The Cambridge-Analytica scam has raised a number of eyebrows and data privacy is now a hot topic. Indian authorities are taking a closer look at the transactions with the Chinese behemoths.

Earlier this month, Reserve Bank of India mandated that all payments data of Indian consumers should be stored in a data centre hosted in India to protect loss.

The US is increasingly shunning Chinese telecom equipment manufacturers from owning or running the country’s internet and telecom infrastructure to protect any data transfer to China.

It is to be seen if India is going to follow the suit any time soon.


Also Read: Amazon Business launches in India, aims to do what Alibaba did for China 20 years ago