As of today, India is home to 61 unicorn startups of which 21 are registered under Indian dominion. While this statistic is one to enjoy and an indicator of innovation and development, it is important to know that the we reached this figure in a matter of just 6 years. This is an almost unbelievable statistical possibility, however if we are to get to the bottom of this blitzkreig like success, we have to take a deeper dive.
Let’s Meet The Investors:
While the founders and startups are Indian the top investors are not. Taking a look at the highest ranking investor, we have Masayoshi Son’s Softbank on the first place, Alibaba Group and Tiger Global Management on number two, Sequoia rolling in on fourth place, and DST Global, Tencent, General Atlantic, and Singapore’s Temasek Holdings securing the later position.
Now if we look at the where these respective venture capitalist firms are from, we see a disturbing pattern. Three of these are from China and three from the USA. Given the geopolitical tensions between India and China this raises alarm for the first point of concern.
The Chinese Communist Party (CCP) undoubtedly exercises significant control over it’s corporation as The Guardian reported in a 2019 investigation, pointing out Premier Xi’s interventionist instincts and the existence of the national intelligence laws introduced in 2017 which makes it compulsory for private entities to comply with state’s espionage demands.
However, the situation isn’t helped by ongoing geo-political tensions between India and China. Chinese influence on top Indian companies puts our national interest in a really precarious position and is akin to holding hostage our national economy. Unicorns to the likes of Paytm, Swiggy, Oyo, BigBasket, to name a few are majorly funded by Alibaba, Tencent, Didi Chuxing, and Alibaba again respectively.
This is a matter of national security and the same has been picked up the government regulators as well, citing a need to curb “opportunistic takeovers/acquisition” investments from an entity in a country sharing a land border with India will hereon require government approval the new regulation indicates. Given that Chinese foreign direct investment into India stands at a staggering $6.2 Billion according to a February report by research group Gateway House and China’s Bytedance eyeing a $1 Billion investment in India indeed paints a very vulnerable position for India.