For many investors, entrepreneurs, and startups, there is no more tantalizing prospect than putting down roots in Silicon Valley. Though the American West Coast (and the United States in general) is seen as a holy place for unicorns, with almost half of the world’s unicorn companies originating from the country, it’s not the only place investors should look.
Other Asian countries—China and India in particular—have given investors pause. Chinese investors are already realizing the potential for a new market, heavily investing in Indian startups at a growing rate. Outside of the US, more and more capital is being generated and put to work, particularly when it comes to technology companies. China’s internet giants, including Baidu and Tencent, have had their eye on firms in their regions, and are swiftly catching up to the US as leaders in the industry.
So where’s the interest coming from? What has caused Chinese investors to latch onto India as a potential source for new unicorns? We’ve seen China’s startups fare well in the market, so their expertise has already been proven as they challenge the US’s dominance over venture capital.
India’s status as an emerging market for investors comes from a variety of factors. The country’s young population makes it a growth market for innovative ideas and startups. Additionally, India’s government encourages startups, and the large population allows for ideas to spread quickly. The pool of capital available for Indian entrepreneurs is certainly sizable, but the country’s startups have stopped just shy of rivaling those of the United States. This is because India is not without its problems, many startups seeking to emulate popular western counterparts rather than innovate.
The duels between American and Indian companies have often not ended well, but certain corporations, including Amazon, have taken an interest in the potential for them to excel and capture a new segment of the market.
As always, the tide of technology stands to heavily impact the way that startups plant their roots and flourish. Investors have chosen to examine countries with a high population of people willing to integrate their online and offline experiences. Unwieldy corporations that have proved unable to take advantage of these trends have created markets ripe for disruption by savvy corporations. This leads to the successes of things like financial technology (Fintech) startups that have taken hold in these emerging markets.
No matter where one looks, it’s obvious that startups are becoming much easier to, well, start up. Reduced costs and ample capital have lured many entrepreneurs to try their hand at creating the next unicorn. Other companies, such as Endeavor, have been created with the express purpose to identify these emerging markets and help budding entrepreneurs make an impact with them.
Changes to how the world views innovation have brought boons to many countries and the talented individuals willing to make a difference there. Change will happen on a global level and not a national level, but only if investors realize that there’s a place for capital in places other than Silicon Valley.
They’ll just have to find them first.