Apple’s recent acquisition of Indian machine-learning startup Tuplejump offers further evidence of a revival in the interest of global technology giants in the country’s startup space, especially in areas such as artificial intelligence, cloud infrastructure and automation.
Enthusiasm for tech startups in India had waned in the last two years with fewer exits, a funding crunch and an inability to scale up. That seems to be changing with Intel, Apple and Nutanix shopping around for companies and the people who work there. Intel bought Soft Machines, a Silicon Valley chip designer with offices in Hyderabad, for $300 million in September. The company was cofounded by former Intel veteran Mahesh Lingareddy. Last month, Intel acquired California-based deep-learning startup Nervana Systems run by Indian-origin entrepreneur Naveen Rao in a deal reportedly valued at $408 million. Sequoia-backed Calm.io was acqui-hired by global enterprise tech giant Nutanix in August. . Most of Calm.io’s 43-member team based at its development centre in Bengaluru will be moving to new Nutanix offices.
What’s appealing about Indian entrepreneurs and their ventures is a combination of talent, technology, traction and transactions, said Ravi Gururaj, Nasscom product council chairman.
“Talented small teams are working within an interesting technology area, where they are exhibiting some early product traction and a transaction which can be closed on relatively attractive terms,” he said. Major acquisitions in 2016 point to growing demand for technologies that are ‘hot’ right now, including machine learning, cloud infrastructure and automation, experts said.
The tech giants are keen on acquiring companies that specialise in machine learning and artificial intelligence, said Thiyagarajan M, head of mergers and acquisitions (M&As) at software product thinktank iSPIRT.
The attention on Indian tech startups also has to do with the maturing of the ecosystem in the last few years. Indian startups are now creating products and technology solutions that contribute to filling the gaps for large multinationals, said KS Viswanathan, vice-president, industry initiatives, Nasscom. “Digital change that is taking place globally is much more rapid than reported,” said Viswanathan. “Silicon Valley needs capacity from all over the globe and they are now looking at India more seriously than ever before.” Experts said the number of deals and valuations will likely increase.