Investcorp, a global investment manager, specializing in alternative investments, today outlined the growth and investment opportunities in India’s digital economy driven by digitalization and accelerated by Covid-19 in a newly released white paper, “Digital India: The $1 Trillion Opportunity”. The whitepaper finds that India’s demographic advantage and its rising incomes, strongly positions the country to be the world’s fastest growing digital economy – unlocking US $1 trillion in value (up from approximately US $250 billion in 2020), and accounting for over 25%[1] of India’s overall GDP by 2025.
The white paper provides an overview on how India is poised to become a digital first economy, how the country has evolved its digital landscape, and reasons for increased investment interest, despite the pandemic. It also analyzes the factors that should propel this transformation and the opportunity for investors.
Gaurav Sharma, Head of Private Equity, Investcorp India said, “The global pandemic and the subsequent lockdown accelerated digitization in India. Investors continue to realize the opportunity in India over the next five years, driven by strong digital infrastructure, continued business innovation and strong investor appetite. With rapidly adopted digitalization, India has made tech-enabled businesses not a choice, but a ubiquitous reality.”
The whitepaper notes that with continued interest in India’s tech business models, the country is witnessing 15 new unicorns added in H1-2021 alone, with these players raising an aggregate of US $6 billion at a combined valuation of US $28 billion[2]. Furthermore, the investment ecosystem is now seeing strong public investor appetite as the first IPO of a digital first Indian unicorn- Zomato, was 38x oversubscribed and saw a 53% pop on listing day to touch a market capitalization of $13 billion.
It concludes that investors will need a combination of deep networks, local on ground presence, technology expertise and multi-cycle/stage investment experience to capitalize on this value creation opportunity.
In India, Investcorp has invested across the consumer tech, healthcare, financial services, retail, SaaS, e-commerce, and technology sectors. Its investments over the last four years include Intergrow Brands, Bewakoof.com, Freshtohome, Zolo, InCred, Citykart, ASG, NephroPlus, Unilog, XpressBees, and Safari Industries. The complete white paper and list of Investcorp’s investments can be found at www.investcorp.com
[1] IVC Analysis, Financial Express (https://www.financialexpress.com/economy/govt-sticks-to-5-trillion-economy-target-emphasis-on-infra-aimed-at-achieving-goal-dea-secy/2187845/)
[2] Venture Intelligence Unicorn Tracker, IVC Analysis (https://www.ventureintelligence.com/Indian-Unicorn-Tracker.php)