Saudi Sovereign Fund PIF to Invest USD 1 Billion in Jio

GCC based funds are racking up their investments in Indian start-ups. Saudi based Public Investment Fund (PIF) has announced to invest USD 1 billion into the Reliance Jio platform rivaling Abu Dhabi Investment Authority (ADIA) that has also poured in a similar amount Jio.

GCC based funds are racking up their investments in Indian start-ups. Saudi based Public Investment Fund (PIF) has announced to invest USD 1 billion into the Reliance Jio platform rivaling Abu Dhabi Investment Authority (ADIA) that has also poured in a similar amount Jio.

Bahrain based Investcorp has already made notable investments in numerous retail, financial service, & healthcare enterprises. The PE player is planning to invest USD 1.5 billion in India in the next 5 years.

Over the past few years, GCC based public and private investors have shown a strong appetite towards investing numerous TMT, retail, online commerce, aggregators, and logistic based start-ups in India. Earlier they have shown similar interest towards China. However, as the Chinese market reaches saturation, India offers a viable alternative.

A large population, growth in the middle class, an unprecedented rate of digitization, & evolving consumption patterns, make an Indian start-up ecosystem a fertile ground to bet on. Investors from GCC has also witnessed profitable exits, which is further giving the buying boost. For instance, Qatar Investment Authority (QIA) made an early investment of USD 150 million in Flipkart, which was later on acquired by US giant Walmart in 2018.

Investment Drivers

• India's growing middle class: One of the major factors, that is drawing international investors is the bullish Indian middle class. As per Mumbai University, an individual with daily spending of around 10 dollars classify as middle class. By this convention, around 600 million Indians will come under the middle class, which is a huge number.
• Urbanization: India's rapid rate of urbanization is also fuelling its economic progress. In 2000, roughly 28% of the Indian population was urbanized. In 2017, the rate of urbanization had reached 34, as per The World Bank. In the next 10 years, 41% of the Indian population will be urbanized.
• Young demographics: In terms of demography, India has a real advantage. 62.5% of the population is aged 15-59.
• Entrepreneurial culture & Political Stability: A stable political environment and culture that has been traditionally rich in the entrepreneurial mindset are also pull factors for international investors.

Rising Appetite for Indian Start-Ups

The Indian start-up ecosystem, which is 3^rd largest after the USA and China, is a high-yielding ground for various online commerce, content streaming, & tech-enabled aggregator platforms to thrive. In a post COVID world, the interest in Indian start-up space is further going to boost as millions of new internet users are joining each month. As the next sunrise market, international investors will continue to pivot towards India, as there will be a plethora of new opportunities in the Online Retail, B2B E-Commerce, Edutech, Online Healthcare, Analytics, Cloud Software, etc. Big-ticket deals from PIF & ADIA are just the tip of the iceberg. Many more will follow soon.