In a future where energy grids are managed through blockchain, where driverless cars are more norm than a novelty, and where entire cities can think and perform tasks automatically, humanity will have the DeepTech ecosystem of today to thank. The pioneering work done by DeepTech startups today is set to transform fields as diverse as healthcare, hospitality and commerce, among many others. DeepTech has a pivotal role to play in tackling the sustainability challenges of the future. Because of its intensive focus on science and technology, it demands a strong research base, heavy financial investment and a challenging business model. Therefore, corporates and governments need to work with these startups to nurture a thriving ecosystem.
A study by Inc42 found that only one per cent of the total investment in the country was put into DeepTech in the first quarter of this year. Indian investors remain lukewarm about DeepTech for four reasons—a lack of appropriately skilled professionals, conservatism towards technology adoption, the strong market presence of global players and a weak intellectual property framework.
On the other hand, countries like the United States, China and Israel have seen a surge in investment. A study by BCG and Hello Tomorrow that looked at seven categories of DeepTech found that the aggregate global private investment had risen by over 20 per cent between 2015 and 2018. Nonetheless, Indian DeepTech startups have attracted interest from both governments and private players and given enough time, both will be pivotal to revolutionising the field in India. Consider this startup/corporate/government collaboration in three fields: Artificial Intelligence (AI), Internet of Things (IoT) and blockchain.
Leading Tech Giants Eye Artificial Intelligence Start-ups
India had the third highest number of AI startups among the G20 nations in 2016, and its AI market is expected to touch $47 billion by 2020. For over five years now, large corporations and startups have been experimenting with AI. The Big Six–Google, Amazon, Microsoft, Apple, Facebook and IBM–have been on an acquisition spree for most of the decade. Indian players like Flipkart, Oyo and Paytm, too, have not shied away from investing in or acquiring AI startups.
However, the acquisition is not the only route that corporates can take. Google, which made news in 2017 with its acquisition of Bengaluru-based Machine Learning startup Halli Labs, has been making deeper inroads into Indian DeepTech since. The tech giant has developed an accelerator program based in India to nurture upcoming startups, particularly in the AI and ML space. By March 2018, it had already supported over 30 startups.
Governments, too, are incubating AI startups through premier research institutes like the Indian Institute of Technology (IIT) and the Indian Institute of Information Technology (IIIT), which can provide the right resources combined with a strong research base. The central government is also set to launch a National Artificial Intelligence Centre in July 2019, which will provide skilling and research facilities and examine potential uses of AI in fields like healthcare, education and agriculture from the point of view of public systems delivery. Since DeepTech startups have already made breakthroughs in these areas, it gives the government a chance to work with them to drive effective solutions.
Internet of Things is Making Cities Smart
The National Association of Software and Services Companies (NASSCOM) predicts that the Indian IoT market will touch $15 billion by next year and account for five per cent of the global IoT market. Corporates have recognised IoT’s potential to disrupt several industries. India’s IoT explosion is said to have begun when Qualcomm Ventures and Cisco invested $43.3 million in Hyderabad-based Ineda Systems in 2014. The company was later acquired by Intel earlier this year. From 2006 to 2017, 120 IoT startups from India have received more than $169 million in funding according to a study by Zinnov.
The Indian government has taken a keen interest in IoT, leveraging its potential as a part of its Digital India mission. It has reportedly allotted INR 7,000 crore for the development of 100 smart cities, conservation of water and power and improved security, healthcare and transport. For instance, the platform developed by Sanshodhan E-waste Exchange, a Hyderabad-based T-Hub-incubated waste management startup, has been adopted by Amravati. Mumbai-based Gaia is currently driving e-governance for the Swachh Bharat Mission, working in areas like tracking, sensing, metering and analytics.
Governments Woo Blockchain Startups
Blockchain, the distributed ledger technology that drew worldwide attention for the cryptocurrency Bitcoin, now has a range of potential uses in cybersecurity, online transaction, business process management and even energy management. The Indian government has been quick to recognise this trend. In 2018, NITI Aayog co-hosted the biggest blockchain conference in Asia with the state governments of Goa and Telangana.
Also, the public sector in India is currently undertaking over 40 blockchain initiatives, according to the India Blockchain Report 2019. State governments are involving blockchain startups in these initiatives. In May 2019, the Telangana government promised land at subsidised rates and funding for research, regulatory and policy support in its draft blockchain policy. Startups are even partnering with state governments on public projects. For instance, Hyderabad-based Zebi is in a partnership with the government of Andhra Pradesh to develop blockchain-based land registry solutions.
Corporates, too, have recognised the potential of blockchain startups. Funding aside, corporates can nurture blockchain startups through active partnership as IBM demonstrated in 2018. The multinational IT giant launched an accelerator program that works towards building and scaling blockchain startups globally. Since Blockchain is still currently in its infancy, accelerator and incubator programs from leading corporates can nurture budding startups through guidance and access to resources.
Governments and corporates have much to gain from collaborations with DeepTech startups. Such collaborations are imperative since DeepTech has enormous potential in the long run to tackle contemporary sustainability challenges. With global trends indicating greater investment in the field, undoubtedly governments and corporates in India will soon follow suit to usher in a DeepTech revolution.
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