Several Chinese investment funds and mobile tech companies are betting big on early-stage Indian mobile startups. Some 15 of them are currently on a trip to India, organized by China-based venture capital management organization OnionFans, with the objective of identifying opportunities for investment. Among them are Zhejiang Investment Group, Incapital, Grand Capital, Yeahmobi, and Hangzhou Zhexin Information Technology. A few already have investments in India, and want to build on them.

At an event in Bengaluru in association with the Internet and Mobile Association of India (IAMAI) on Tuesday, the ventures interacted with more than 100 Indian startups.

Jessica Wong, Investment Director in Yeahmobi, a mobile advertising firm that counts Baidu, Cheetah Mobile and Paytm among its clients, said the Indian mobile startup ecosystem is where China’s was a few years ago. “So we consider ourselves as ‘advantage investors’ – with our resources and industry know-how, we would like to get involved with high-quality Indian startups from the very beginning“, she said.

Yeahmobi, which launched an India-specific fund last year, has already invested in six startups in India and is planning to make a seed investment of $500,000 each in another 12 this year. The fund is focused on financial tech, education, healthcare, e-commerce, and business-to-business ventures.

Investment interest from China began about two years ago, with the entry of players like Alibaba, Baidu, Cheetah Mobile and Apus Group. Now the interest appears to be exploding, with many more players looking at a wider range of India opportunities.

Satyendra Verma, Associate VP in IAMAI, said the Chinese investors are now particularly focused on the hundreds of smaller app developers. “They want to invest in these startups right at the beginning“, he said.

The investors say Indians’ strength in the English language gives them an edge globally over their Chinese counterparts. “People here are very international and they work hard. The startup founders are well-educated and young; that is a big advantage“, said Jianbiao Xiang, Founder of Incapital, an early-stage investment firm that manages a fund of 800 million yuan ($123 million).

Incapital plans to invest $5 million in each of the Indian startups that it shortlists.

The China market is now seen as fairly mature, and investors see better opportunities for their money in countries like India. “I wasn’t sure about the India market first but that has changed after my interaction with the startups here“, Xiang said.

Wang Huachan, Chairman of Zhejiang Investment Group, noted that authorities of Hangzhou City, where the Group is based, are keen to further communication lines with India.

There is some degree of disappointment too. “When it comes to innovation, Indian startups could do more. All the startups we have interacted with have business models that are already well established in China“, said Xiang.

Wei Hajiuan, Founder of Grand Capital, noted that China’s internet industry has grown faster than India’s perhaps because of better infrastructure there. “Chinese investors can come into play here and India can learn from mistakes that China made“, he said.

Source: The Times of India