India and the Middle East region share a strong historical bond. Since silk road days, the two were trading partners. In recent years, the relationship has further deepened with annual trading reaching around ~ USD 120 billion.
In recent years, a new dimension has emerged in India’s ties with the region. GCC-based investors & sovereign wealth funds are increasingly drawn towards the Indian start-up ecosystem. In 2020 defying the covid blues, GCC-based funds invested USD 7.5 billion in the Indian start-up ecosystem. A sizable portion of the investment was directed towards Reliance-backed Jio network.) In 2019, GCC-based investors poured in around USD 1.5 billion in the Indian start-up ecosystem.
This is a gradual shift from the earlier stance when Middle Eastern investors mostly preferred to invest in US-based start-ups. The trends are now altering and investors are now drawn towards China and India, wherein the digital ecosystem and consumer tech are maturing. The pandemic has also helped the technology and start-up space in the country as it is now helping digital entrepreneurs to scale up fast.
Today most of the major Indian unicorns such as Oyo, Zomato, Flipkart, Fresh2Home, Policy Bazar, Lenskart, etc have received funding support from GCC-based investors. To scout lucrative opportunities in India’s growing tech ecosystem, GCC-based venture funds and sovereign entities are also setting up their offices in India.
Recent GCC-Based Investments in Indian Start-Up
UAE and GCC offers expansionary ground
The GCC-India ties are not just unidirectional. Indian start-ups are also setting up in UAE and the GCC region to expand internationally. In 2012, Zomato became the first major Indian start-up to enter the Middle East market. In the next 7 years, the food delivery successfully scaled up in the region and eventually was sold at a whopping price of USD 222 million. In 2019, OYO entered the UAE market and soon registered 12,000 hotel rooms across 150 hotels. Likewise Indian eyecare e-commerce start-up Lenskart is eyeing a USD 50 million investment in the region.
The growing presence of Indian start-ups is not limited to the presence of vast Indian expatriates in the region and meaningful historical ties. The region also offers a conducive ground to grow and scale-up for Indian entrepreneurs. As per capita income in the GCC is higher, the profitability and ROIs are also higher.
How the India Watch can Help?
The India watch is an India-centric Business Research and Advisory. We help domestic and international enterprises with tailor-made market intelligence and business consulting solutions. Our clients include corporates, investors, sovereign agencies, and business associations.
GCC-based investors, who are looking to invest in the Indian start-up ecosystem, can avail of our research and advisory solutions. Through our custom services, we can help investors can gain a better understanding of the Indian market, evaluate the target industry, and get in-depth insights on the potential venture.
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