Most Anticipated Deals of 2017
The India startup ecosystem is maturing year by year, not only the founders are learning from their mistakes, but even the VCs are... What to do & what not to do is always the struggle but some things we can all anticipate. Here, BWDisrupt brings which sector could be the hottest to explore and invest in 2017.
The year 2017 is expected to be a year of consolidation and mergers in the online space even as investors are expected to tighten purses to high valuations, e-commerce space will witness a rearrangement. 2016 was a year of rationalization for the Indian startup sector, as biggest investors spent cautiously unlike in 2014 and 2015, which saw higher irrational investments.
Let's take a look at some of the major announcements that we may encounter this year-
Companies Filing IPOs
Founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk, Airbnb is an app and website that connects people seeking lodging with renters who have listed their personal houses, apartments, guest rooms, etc., on either platform.
Their IPO Buzz has been brewing since 2014, even though the internal fights were in news and Chesky had refused an IPO till a time it actually benefits the company. Despite arch-rivals like Roomorama, Homeaway and the Expedia owned Housetrip, AirBnB has the potential to become one of the hottest upcoming IPO.
Uber of all the possible 2017 IPOs, a public offering from ride-hailing giant Uber, valued at nearly $70 billion, would doubtlessly be the biggest of the year. Uber CEO Travis Kalanick has spoken of pushing back an Uber IPO for as long as possible, but a recent merger of Uber China with bitter Chinese rival Didi Chuxing could pave the way for a 2017 offering. This makes a 2017 IPO more likely since China was a huge profit suck for Uber. Still, Uber lost over $1.2 billion in the first half of 2016. Uber needs to get expenses and losses under control quickly.
As Snapchat’s parent company gets ready to go for an IPO, considering a paying users for their content through revenue sharing options with brands, the market says it might not be the biggest digital marketing advertising leader. Despite, Snap holding 2-4% of the total advertising budgets, most of the stakes are with Google and Facebook. Hence, it wouldn’t be wrong to say that the company Snapchat would need more time to reach double digits in the ad-revenue pie.
4. Palantir Technologies-
Palantir has yet to lay out any specific plans for an IPO, but after its latest round of private funding, investors are beginning to get excited about the potential for a blockbuster debut in the near future. Late last year, the company completed a funding round that raised $880 million and put its valuation at $20 billion. Analysts have estimated Palantir’s 2015 revenue to have been around $1.5 billion. One must keep an eye on Thiel and Palantir as the company looks to position itself for further success soon, however the stocks that aren't in the news yet.
Pinterest, a popular online service that allows users to pin (attach) pictures or videos—which web aficionados call “pins”—related to their interests (hence the name) could go public. Indeed, the cards are all there for a Pinterest initial public offering (IPO) in 2017, given that the company announced that it can count on over 150 million active users. This user number is 50% higher than a year ago, and an IPO would help fuel momentum. Pinterest, founded in 2010 in California, has an estimated value of $11.0 billion.
Now. let’s take a look at the top sectors that are likely to have the largest chunk of investment this year:
There are more than 20 odd players who are functional in this space currently, who are on the mission to bring a change and solve a variety of problems faced by people. From business issues to investments and individual wealth management problems, there’s a solution to everything. With the growing digitization, the coming years are going to witness a massive advancement in the FinTech startup industry. Soon, even block-chain technology will start to show distributed-ledger concept and gain traction due to its promise of transforming the operating models in various industries & banks (just like Citicoins).
FINO PayTech, ItzCash, Mswipe, Citrus Pay, MoneyOnMobile, Transerv, PayMate, Coverfox, Cogencis, Heckyl, Capital Float, Ezetap, Tracxn, Fintellix, QwikCilver, MoneyView, JusPay, CustomerXPs, ComplyGlobal, BankerBay, BankBazaar, Chargebee, CreditMantri, FundsIndia, Faircent and many more have a unique business model and are some of the favorites on VC’s wish list.
EdTech startups are expected to play a key role in delivering education in India using the Internet to scale and solve the last mile problem. Combined with the availability of cheap smartphones and affordable Internet, they enable people to access quality education, anywhere, any time. Startups are looking to disrupt education using a variety of business models - from platform plays, to online courses, delivered through pre-recorded videos and curated content, paired with study materials, online assessments and industry certifications. Other EdTech business models have been built around test preparation, edutainment, and discovery use cases.
Toppr, Walnut Knowledge, X Prep, WizlQ, Edukart, Vedantu, Embibe, Meritnation, BYJU’s, Top Scorer, Genext Students, Unacademy, SuperProfs, Simplilearn, Nayi Disha, SchoolGuru, TestBook are some of the biggest players in the edtech space currently and doing very well with investments. They need time to grow organically though.
3. IoT, AAI/VR, Saas
The year 2017 would be a software era. More and more companies would invest in software development and cloud enablement. Software as a Service (SaaS) products will have a higher adoption and IoT will impact every aspect of life (robotics, automation, sensor-reporting) etc would be coming closer to home. Also, digital services will drive most of the investments when customer’s experience will be enhanced through things like driverless taxis or Social, Mobile, Analytics and Cloud (SMAC) technologies. Gartner predicts that by the end of 2017, one in five leading global retail brands, or 20%, will be using augmented reality (AR) and Virtual Reality (VR). Not just that, voice interfaces will also make life easier, web, mobile or TV, voice-based technologies will simply communicate across the digital device mesh- Alexa, Siri, Cortana, or OK Google will join the race of intelligent apps.
This sector is one of the biggest hot-beds investors would ever come across in this millennium. The investors who had lost their capital betting on money-guzzling food and grocery startups, now have turned their heads to capital-efficient enterprise software or (SaaS).
The new investor darlings are – (SaaS) startups like: Helpshift, Druva and Mindtickle, Firstcry, Letsride, Plobal, Alitzon, Arcatron Mobility, Tork Motorcycles, ProximiT. And in AI/ VR the set includes: Staqu, Absentia VR, Drishya 360s etc In IoT, we have players like: SenseGiz, Cooey, EasyReach, CarlQ, Lechal, Touchkin, Retisense, ActoFit Wearables and so forth who are the front-runners even in terms of seeking funding and gathering traction.
The healthcare delivery space saw a lot of interest from PE firms in 2016 whereas pharma was, as usual, dominated by strategic deals. The past few years have seen the emergence of single-specialty companies focusing on eye care, dental care, mother- and child-care, orthopaedics and oncology chains, among others. 2016 itself saw a significant investment in mother- and child-care firm Motherhood and oncology firm Cancer Treatment Services International by TPG Growth
Most of the startups, that have dominated in the previous year and likely to see greater traction and seek the role of a healthcare moderator very soon.
For example: Health care at home, Zoctr, Vatsalya, Care 24, Zozz, Healers at Home, Nightingales, Portea, Doctor on Call, Tribeca etc.
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