SI Reporter | New Delhi Last Updated at August 29, 2019 10:05 IST
Today Big Data, Cloud Computing and Artificial Intelligence (AI) rule the world. However, India has been left out from being a part of this revolution. India has geared up considerably. However, there is still a very long way to go. In 2016, IT and ITeS contributed to 7.7% of the GDP. The cloud computing market is currently valued around $2.2 million and it is expected to grow to $4 million by 2020.
Despite the enthusiasm about AI in India, Abhinav Khare deep dives into the roadblocks that come in the way while adopting and integrating this technology in our system. Here, our cost of failing is several notches larger than the west. If the risk of failing would have been lower, we could have adopted bolder mover and delved farther into the Silicon Valley like the West. Added to this, the tendency of Indian businesses to just be Ctrl C + Ctrl V of successful business models shows how we are lacking when it comes to innovation.
The few challenges that the cutting edge technology of AI face are software malfunction and investment. AI is an extremely capital intensive industry and it seldom finds investors for it. Data is referred to as the next oil but it does come with its downsides. Big Data contains sensitive personal data and face a serious issue of breach and theft.
Indian education system is focussed on rote learning and only good for clerks. With the current changes to technology, the need of the hour is to re-skill our workforce. It is said that most of the graduates of our country are unemployable. Thus, re-skills and innovation are the only way for employment as most of their current skills shall soon be rendered useless.
Cybersecurity is becoming a big issue globally with new data breaches emerging. The threat has been affecting India enterprises as they’re rapidly digitising their services. These companies have been witnessing a rise in data breaches and exposure of confidential information.
IBM is trying to turn this into a business opportunity. The New York-based tech giant has started providing its artificial intelligence (AI) platform Watson to detect, assess and resolve issues of data threats without relying on the physical workforce.
Vaidyanathan Iyer, security software leader of IBM India, said India is digitising at breakneck speed because of faster digitisation. Therefore facing more security threats.
“The average total cost of a data breach in India is INR 13 Cr, which represents an increase of 7.29% from the prior year,” he added.
The technology is said to be an effective tool replacing the team of tech experts with just one AI. IBM, also known as the Big Blue, has been working with various small and medium businesses and enterprises in the country to install Watson embedded products and services for end-to-end cybersecurity management.
What Makes Up The Market For IBM’s Security Services?
IBM has been growing in double digits in India and expects to maintain the same pace over the next few years. There has been a 50% year-on-year (YoY) increase in the adaptation of this security software solution in the first half of 2019, said the company.
IBM’s core demand is coming from various sectors like banking, financial services, insurance, government, defence and manufacturing. India’s flagship markets exchange, the Bombay Stock Exchange Ltd, is one of the customers of the company.
IBM has been working with BSE to design, build and manage cybersecurity operations centre (SOC) to safeguard the company’s assets and protect stakeholders’ data. Such centres will enable around-the-clock security event monitoring, event handling, security analysis and incident management and response.
Shivkumar Pandey, CISO of BSE, said, “The end-to-end security solutions, services and global expertise from IBM will help BSE consolidate and fortify best practices under one umbrella.”
IBM is also providing its products to SMBs for extensive endpoint security. One of the biggest reasons for the installation of Watson is due to the shortage of “skilled security teams” within their organisation to assess threats.
BharatPe, UPI payments and digital lending platform for offline shop-owners in India, on Monday said that it has raised $50 million (about Rs 350 crore) as a part of its latest round of funding, led by Ribbit Capital and London-based hedge fund Steadview Capital. Existing investors including Sequoia Capital, Beenext Capital, and Insight Partners also participated in the round.
According to the founders, the funds from this round will be deployed to expand their current merchant base of 1.45 million to over five million within the next one year. The funds will also be used to fulfill the capital requirements of the under-served offline merchants in India by lending to them.
[Funding Alert] Insight Partners makes its first Indian fintech investment, leads $15.5M Series…
This funding comes just four months after the startup had raised their Series A round of $15.5 million in April this year, led by US-based Insight Partners. With this round, BharatPe has raised four rounds of funding worth a total of $68 million till date.
Co-founded in 2018 by Ashneer Grover, and Shashvat Nakrani, the company is working towards driving the adoption of UPI among merchants, and has established operations in 20 cities namely, Hyderabad, Bengaluru, Delhi, Pune, Mumbai, Ahmedabad, Indore, Bhopal, Nagpur, Chandigarh, and Jaipur.
“We are determined to serve the small merchant community in India, which was largely underserved by financial institutions till date.” adds Ashneer Grover, Co-founder and CEO of BharatPe.
Providing a single interface for all UPI apps (including Paytm, PhonePe, Google Pay, BHIM, MobiKwik, Freecharge, Truecaller, and a hundred others), the company empowers the merchants to accept UPI payments for free through the BharatPe QR. Further, merchants can sign up instantly and start receiving funds immediately in their bank account.
The company in a statement said that within a year of launch, the company claims to have achieved $1 billion annualised TPV and currently facilitates over 18 million UPI transactions monthly.
“The continued support of our investors is testament to their belief in BharatPe, and we are grateful for such ardent supporters. The funding will help us in further strengthening our lending business and consolidating our market leadership in QR payments offline.” Ashneer added.
The company also said that it is on track to serve over 50 lakh merchants on its network in the next one year.
BharatPe’s investor Ribbit has also invested in other fintech startups in India including, RazorPay, Capital Float, PolicyBazaar, and ZestMoney. While Steadview’s marquee investments in India include Flipkart, Ola, and Bajaj Finserv.
(Edited by Evelyn Ratnakumar)
As the multibillion-dollar market opportunity awaits tech-dominated food delivery startups in India, there is one more disruption waiting to happen as Amazon is all set to make its entry into the foodtech space.
Notwithstanding the ongoing slugfest between restaurant owners and food delivery app companies like Zomato on their steep discounting model, this market is expected to be a $17 billion opportunity by 2023, recording an annual growth rate of 16 percent, according to a report by business consultancy firm Market Research Future.
At present, the food delivery space in India is dominated by Swiggy and Zomato, with the presence of other players like Uber Eats and Foodpanda. It is into this crowded market that Amazon has planned its entry, and it has only aroused the curiosity of many.
People familiar with the development and those entities with whom Amazon has had discussions told YourStory that the global online retailer is likely to have a very differentiated approach.
“Unlike the conventional aggregation of restaurants and delivery of food, Amazon is likely to have a differentiated approach with highly curated offerings on its platform,” an executive says.
According to sources, Amazon is unlikely to create kitchen networks of its own but partner with entities that will provide these foods.
However, for now, Amazon has started reaching out to restaurants with an offer of lower commission fee in the range of six to seven percent. This is much lower than the 15-20 percent charged by Swiggy and Zomato.
“What will help us is that Amazon’s entry gives us the option to break the exclusivity contract with the possibility of expanding our business,” a restaurant owner says.
According to sources, Amazon will first launch its service in Bengaluru during the Diwali season, and the service will be available on its Prime Now app.
Competition may increase efficiency
The entry of Amazon is certainly going to shake up this segment and may also prove beneficial for everybody.
Rohan Agarwal, Engagement Manager, RedSeer Consultancy, an analytical firm, says, “Having multiple players is always good for any ecosystem. The competition ensures that users – both the restaurant partners and end consumers – get better services. It ensures better suppliers, reduces inefficiencies, and the gaps in the market get filled.”
The entry of Amazon could also bring in innovation, especially the way the food offerings are positioned. “This gives room to much experimentation and opening of newer formats and brands. In the end, the consumer benefits,” says an investor on the condition of anonymity.
According to sources, Amazon has held talks with Foodpanda, looking at different partnership options. Foodpanda, which is now owned by Ola, has rejigged its business and focused on selling private brands.
Amazon’s entry into the space may also come as relief for many restaurants, especially standalone entities on various delivery platforms, as currently their profit margins are being squeezed.
“As order volumes through these apps keep increasing, restaurants factor in that demand and work on adding to their daily (raw material) procurements. But then, after a point, you start paying the customer for eating food, with each increase in (the) margin (i.e., the amount paid to Swiggy),” says another restaurant partner on the condition of anonymity.
There is no denying the value the online food delivery platforms have brought to these restaurants. To several of them, each of these players give close to 5,000 orders in a month.
From India’s fastest growing unicorn to having 1.2 lakh restaurant partners across 290 cities -…
A larger base
Foodtech has always garnered a lot of interest and attention. Whether it was in the funding ‘fear of missing out’ (FOMO) peak in 2015, where practically every foodtech company was raising funds, or the churn in 2016-17, where many well-funded startups like Tinyowl shut shop.
But just a year after the investment slowdown, foodtech startups started getting the limelight again. Today, it isn’t just about the top 10 cities, but the top 100 cities. And what does it take to run ops in a sustainable model? Rohan explains it cannot be the same model that worked in the cities.
“It is about what works in these markets and with these locales. The markets are ops intensive, and many might need to follow an outsourcing model. But if players like Amazon come into the space, they already have the ecommerce presence in these markets and logistical arm, which makes it easy for them to break into the markets. They just have to cross-leverage it,” Rohan says.
He adds that the advantage for entering so late in the market is “you have an audience already used to your service”.
There also is an openness to more choice, with more players. It reduces a monopoly or duopoly, believes another restaurant partner.
The India opportunity
The planned entry of Amazon into India is also very interesting for the global online retailer, considering that its foray into the food delivery space in the US and Europe was a bitter experience.
In June this year, it shut down its restaurant delivery service in the US, and in Europe it invested in Deliveroo, which also closed down.
However, many are optimistic about its India business. “India is a supply constrained market. That is what makes the food delivery players and market in India different,” says an investor, seeking anonymity.
The restaurant business involves high investments in space and equipment. Operating expenses are also high, and the only way to remain profitable is to increase volumes. This, they hope, can be attained through food delivery apps.
“This is what makes dark kitchens and concepts like Swiggy Access very popular. India doesn’t have the restaurant penetration that is seen in the US or even in Southeast Asia. And the eating out culture is just starting to grow. This is what makes food delivery so lucrative in this market,” explains an analyst.
The cash guzzler
The food delivery space in India is certainly for deep-pocketed players. Both Zomato and Swiggy are unicorns, which have raised considerable amount of funding. Amazon’s entry will only strengthen this thesis.
This is also expected to increase the cash burn in the segment. Several reports state that both Zomato and Swiggy burn around $30 to $40 million every month on discounts, tie-ups, and logistics. Zomato fulfils over one million orders across 500 cities, and Swiggy stands at around 1.2 million.
Uber CEO Dara Khosrowshahi has termed the Indian food delivery market as very competitive. Uber is also likely to invest around $90-120 million into Uber Eats.
Given the capital required in this segment, it would be interesting to see how Amazon is going to make its presence felt in this market.