From ‘breathtaking to very good’: PwC on India’s startup scene

According to PwC, Bangalore, India, is one of the leading startup cities that houses several blockchain and machine learning engineers, an assertion that is difficult to substantiate but one that probably feels accurate to the people on the ground in India who are working with the startup community. Focused primarily on financial technology (FinTech), driven largely by India’s United Payments Interface and its 10-plus million transactions per day, the startup community in India may need a few years to catch up to ecosystems like Boston or Silicon Valley, but the essential elements are in place, including support from large technology vendors, funding from a diverse set of resources, and assistance from experienced consultancies used to working as a bridge between small startups and enterprise-level buyers. Notably, the PwC report mentioned India startups have drawn funding from within the country, from U.S.-based investors, and from banks and sovereign wealth funds in Asia and the Middle East. Asked if PwC sees substantial differences in the size and nature of these funding streams, Talasila called out investments from Japanese investors as particularly robust in recent years, echoing a sentiment TBR heard during a recent visit to Gurgaon, India. Even with a FinTech focus, PwC said the startups have shifted from a copycat mindset to an emphasis on problem-solving and more fully developing a broad ecosystem, two elements that fit well with PwC’s go-to-market approach and overall consulting strategy. As is evident in the use cases that follow, the startup community has embraced working across all lines of business and tackling challenges beyond throwing software at a problem.

Digital potholes and drones defeating mosquitoes

Bringing the startup scene to life, Talasila described a few use cases, ranging from roads to drones to transfer pricing. One startup has developed a new means to measure road surface quality, potentially diminishing the time between a pothole emerging and concerned authorities fixing it. Another startup uses drones to measure mosquito infestations, a potentially massive-scale application across India and other parts of the world. According to PwC, the firm has been engaged, “at any given moment,” with three to five startups outside the FinTech space, including a new electric bus service that could help reduce pollution in India’s cities.

Policy, plumbing and being part of constant change

Before exploring expectations, we need to understand where things were and how much has changed. TBR’s interest in speaking at length with PwC on this topic stemmed in part from trying to better understand PwC’s role and how it has evolved along with the startup community. Talasila said the firm’s efforts around startups in India began in earnest three to four years ago, at a time when the startups were not particularly differentiated (“too many ‘me too’ startups”), and the firm sought advice from its own global member firm network on how to provide meaningful incubation and advice. While PwC US had deep relationships with some startups, the firm did not have an explicit program for early stage engagement. The Israel-based member firm, similarly, worked closely with that country’s nascent startup scene, but the lessons from Tel Aviv did not easily translate to India. As a result, PwC India relied on its own understanding of the market and the players, including the funders, to craft its own role within the startup ecosystem. Notably, according to Talasila, the firm quickly partnered with state governments and federal agencies on policy making with respect to startups, including areas like intellectual property and tax considerations. In PwC’s view, the firm acts as a valuable go-between, bringing government officials first-hand knowledge of the challenges startups face with tax, audit and compliance issues.