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A Landscape Study of Bharat Startups: An Introduction



In India, the informal sector employs about 80% of the total population. These include people of the low and middle-income segments – employed as well as self-employed. In recent years, the segment Bharat – comprising the young, Indian customer characterized by the rapid adoption of mobile technology – has become very attractive to startups. In the last couple of years, a lot of Indian startups have started interacting with the Bharat segment. Some of these also have gained traction, and therefore garnered attention. As the opportunities in this market expand, venture capitalists have been looking towards these startups, intending to invest in this space. The following article highlights startups in a landscape study and analysis of Indian startups that have been catering to the Bharat segment.


The Bharat market space

Total internet users in India grew from 498 million in 2018 to 636 million in 2019 – nearly half of the internet users coming from rural geographies. By the end of 2020, the figure is expected to touch 700 million and is projected to reach 974 million by the year 2025. In 2016, Jio entered the Indian market, drastically reducing the rates of using the internet to encourage mass adoption. With better access to the internet, various startups have also entered the market, hoping to cash in on the lowered rates. These are in the space of e-commerce, fintech, entertainment, agritech, accommodation, social commerce, edtech, and travel.


A 2019 study found India has more internet and mobile phone users in the rural areas compared to urban geographies, and thus a large segment of potential customers are awaiting services that cater to their various needs. We will be running a five-part series on the Bharat startups and the features that are common between them.


An Introduction to Bharat Startups

For the landscape study, we picked and curated startups from a search on Tracxn. Filtering for location (India), sector, business model, and year of founding, we handpicked 25 startups that were found to be catering to the Bharat segment. We selected these 25 based on their relative success, such as funding, about five years in running, expanding customer base, and proven product concept. Most of these have been in business for an average of 4.5 years, with an average of USD 277 million in funding.


We also picked these startups because they were doing well according to the success metrics of their respective sectors. While there are other startups as well that are catering to Bharat, but we chose to focus on 25 as these cut across sectors. Most of these are (Business-to-Business) B2B startups, which highlight a trend that the direct consumer in the segment is still to become internet savvy.


ECommerce

In the e-commerce space, Udaan, ShopX, and ShopKirana are B2B startups catering to retailers of mom-and-pop stores. ShopX comes with a feature that also allows the retailer to onboard customers seeking specific commodities, thus enabling stickiness to the platform. ShopKirana builds on a loyalty points system and customer analytics that help deepen engagement with the app. The main characteristics of the startups are a zero inventory model, elimination of middlemen, making available a wider range of products, and also disbursing credit as a source of revenue.


AgriTech

In the agritech space, Jumbotail, Ninjacart, and CroFarm are working towards the delivery of fresh produce sourced directly from farmers/producers to retailers, restaurants, and large grocery chains. CropIn is into farm management using AI (artificial intelligence) and big data analytics. It has also partnered with the Department of Agriculture and the Government of Karnataka for the delivery of farm management insights. Startups in this sector intend to connect to farmers and retailers directly; eliminating middlemen for farmers while ensuring fresh produce for customers.


FinTech

In the Fintech space, there are several startups offering credit for small and medium services. KhataBook is into digital lending and aspires to deliver other financial services as well. BharatPe, OkCredit, Finova Capital, and Lendingkart are chiefly into credit lending services for MSMEs and small-middle income consumers. This space has opened up for people of low and middle income by giving them access to financial solutions; especially, credit and savings.


EdTech

In the edTech space, Byju’s has seen profitable growth in recent months. Byju offers tutorials for competitive exams as well as online classes on various subjects. Doubtnut is an app that helps students clarify doubts about classroom topics. Startup Blackboard Radio uses voice-based AI (Artificial Intelligence) to teach English to non-English speakers.


Travel and Tourism

Travel and tourism as a sector have also perceived value in catering to middle-income consumers. First started as an app providing comprehensive information about trains, RailYatri recently started a bus connectivity service to create a multi-modal solution for inter-city travel. With 65 destinations across 18 hubs, RailYatri is catering mainly to the Bharat segment. TravelKhana is a startup that delivers food to seats during train travel. Further, OYO Rooms provides affordable no-frills accommodation solving the problem of dependable accommodation for the travelling middle-income customer.


Social Commerce

Meesho and DealShare are social commerce startups that target homemakers as micro-influencers to sell goods at discounted rates among their social networks; thus leveraging the Bharat segment’s social networks.


Each of the sectors covered in this article has the potential to grow soon. The Bharat segment is coming to the fore and further waiting to be serviced. It holds vast potential for startups looking towards them.

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