Sabahat Contractor
Moneycontrol News
The next wave of the startup ecosystem will aim to capture 300 million middle-class consumers, prompting quicker business growth, according to Anup Jain, Managing partner of venture capital firm Orios ventures.
“Businesses will take lesser time to become profitable because they will be more broad based on the next 300 million. Earlier, businesses were based on a small group of people around 25-50 million people living in metros. The cost of reaching these 300 million people is less than the cost of reaching these top 50 million people,” said Jain.
Jain said that with businesses becoming profitable much quicker, some of them may not require multiple rounds of funding.
"In fact, you might see them progressing to the public markets without the help of large one billion dollar cheques," he added.
Business model to target Tier 2-3 markets
“Startups like Zomato, Paytm, Flipkart were meant for the English speaking class and were meant for people who were seeking convenience in top cities targeting 50-75 million. These same people transact again and again and that’s what these startups were based on,” said Jain.
According to Jain, these startups saw growth and expanded to international markets because of their business model, but it was not applicable to the middle class.
“In these last 18-24 months, a whole lot of Indians came online. However their DNA and their access and their affordability are very different,” said Jain.
“So now the next wave of business is going to be different in terms of DNA (business model). It's going to be designed for this affordable middle class which has already got on to the internet and the businesses are going to be around their needs,” he added.
Healthcare, Fintech, ed-tech and interactive language entertainment are one of the big markets in small towns according to Jain.
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