Why Silicon Valley is betting big on India
Bangalore, India — In a crowded convention hall, young entrepreneurs practically shouted their ideas: an online marketplace for yoga instructors, an app to share songs in 30-second snippets, a mobile lunch delivery service.
For any veteran of the go-go era in Silicon Valley, the buzz at the recent Surge startup conference in Bangalore, the cradle of India’s high-tech sector, was familiar and alluring. India’s digital startup scene is booming as Internet use expands. By June, more Indians are expected to access the Internet on their cellphones — 371 million — than the entire population of the U.S.
That leaves nearly 1 billion Indians not yet connected, and as China’s economy slows, U.S. tech companies and investors have turned increasingly to India. Venture capitalists have poured hundreds of millions of dollars into startups, and Silicon Valley giants such as Apple, Google and Facebook are courting Indians with their own initiatives.
“India has become, besides the U.S., the biggest opportunity still out there,” said Sanjit Singh Dang, investment director at Intel Capital, the venture capital arm of the chip maker.
Apple in February announced that it would open a 150-person office in Hyderabad. Last year, while iPhone sales were flat worldwide, sales grew by 76 percent in India, prompting Chief Executive Timothy Cook to call the country an “incredibly exciting” market.
India’s demographics make corporate titans swoon. The median age is 27, nearly a full decade younger than in China. Only 40 percent of the mobile phones shipped in the last quarter of 2015 were smartphones, indicating the market still has huge growth potential.
But Facebook faltered here this year when Mark Zuckerberg’s pet project, a no-cost mobile app for emerging economies called “Free Basics” was blocked by regulators who ruled that it discriminated against other Internet sites.
Even though hundreds of millions of mostly rural Indians still lack Internet access, it is a golden age. Everything from doctor’s appointments to movie tickets can be booked online, and a growing number of transactions are made using mobile wallets — all using apps designed by Indian companies.