New Delhi: Several Indian entrepreneurs Friday rallied in unison after Commerce Minister Piyush Goyal questioned Indian startup ecosystem’s value and innovation proposition, as prominent names such as Zepto CEO Aadit Palicha and Zoho founder Sridhar Vembu voiced their opinion on the issue that has stirred quite a debate in the startup circles.
Palicha – one of the most recognised faces in the startup circles and the cofounder of Zepto – cited the quick commence company’s contribution to jobs, FDI, and termed it a “miracle in Indian innovation”. He underscored the role played by consumer internet companies in pushing technology-led innovation.
The young founder argued that startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of “local champions” and “not pull down the teams that are trying hard to get there”.
Zoho’s Vembu saw the minister’s call as a challenge to engineers and technologists and not as pointing fingers.
“What we need are smart engineers who roll up our sleeves and get it done. Keep in mind the vitamins and cancer cure argument – sequencing how we pay for our big tech ambition is very much part of the `engineering problem’ that smart engineers must solve! We can do this,” Vembu said in a social media post.
Infosys’ former CFO Mohandas Pai reacted to Goyal’s critique, urging ministers to keep faith, help deep-tech startups, and remove difficulties, and assured that the industry will deliver on the promise. He said any comparison with China is not right as India too has such starups albeit “small”.
Taking to X, Shark Tank India judge and founder of Shaadi.com, Anupam Mittal said that he was left mighty impressed by a few deep-tech companies that he has met.
“In the last few months I have met a few deep-tech companies that have absolutely blown me away. From AI and space-tech to material science, Indian entrepreneurs are ready to take on the world. But capital and the eco-system for growth and commercialisation are severely lacking,” he said.
Founders can do most things but not everything, Mittal wrote.
Zepto’s Palicha – in an elaborate post on LinkedIn – said: “It is easy to criticise consumer internet startups in India, especially when you compare them to the deep technical excellence being built in US/China. Using our example, the reality is this: there are almost 1.5 Lakh real people who are earning livelihoods on Zepto today – a company that did not exist 3.5 years ago.”
His statement came after Goyal on Thursday asked the Indian startup community to shift their focus from grocery delivery and ice cream making to high tech sectors like semiconductor, machine learning, robotics, and artificial intelligence. The minister had questioned Indian food delivery startups for turning unemployed youth into cheap labour.
“Are we going to be happy being delivery boys and girls… Is that the destiny of India… this is not a startup, this is entrepreneurship… What other side is doing — robotics, machine learning, 3D manufacturing and next generation factories,” Goyal said on Thursday, comparing the nature of Indian startups with that of Chinese.
Palicha rose to the defence of Indian startups and went on to list the many contributions of Zepto and economic value created by his venture as he placed his arguments.
“Rs 1,000 plus crores of tax contribution to the government per year, over a billion dollars of FDI brought into the country and hundreds of crores invested in organising India’s back-end supply chains (especially for fresh fruits and vegetables). If that isn’t a miracle in Indian innovation, I honestly don’t know what is,” Palicha wrote.
Why doesn’t India have its own large-scale foundational AI model, he quipped, then added “It’s because we still haven’t built great internet companies”.
“Most technology-led innovation over the past 2 decades has originated from consumer internet companies. Who scaled cloud computing? Amazon (originally a consumer internet company). Who are the big players in AI today? Facebook, Google, Alibaba, Tencent etc. (all started as consumer internet companies),” Palicha said.
Consumer internet companies drive innovation because they have the best data, talent, and capital to put behind it.
“We need to build great local champions in the internet that are generating hundreds of millions of dollars in free cash flow (FCF) first if we ever want to get a piece of great technology revolutions. The startup ecosystem, the government, and the owners of large pools of Indian capital need to actively support the creation of these local champions, not pull down the teams that are trying hard to get there,” Palicha argued.
Zepto, he said, is still far away from being a great Internet company that can hold a candle to the global best, but is “executing day in and day out to get there”.
“I can promise that any capital we generate from this business (and it honestly looks like we will) will be invested towards long-term innovation and value creation in India.
“That is essentially what I am dedicating the next few decades of my life to try to do: create dynamism in the Indian economy and our capital markets, in the same way the Americans have for decades. We have the talent and capital; we just need the execution,” he further said.
PTI
