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In recent years, Indian startups have been receiving increased attention. 

And rightly so. 

New-age entrepreneurs are coming up with innovative ideas. Some of these ideas have disrupted complete industries, for the better. 

Not surprisingly, several of these startups have turned into unicorns i.e. they command a valuation of more than a billion dollars.

Now, early investors in these startups are making a killing. Take the recent example of Info Edge.

An early investor in Zomato, Info Edge has multiplied its money more than 60x already. In fact, Info Edge has been an early investor in many small businesses.

Now you may be wondering how you can invest in high growth niche startups and tap into some of these humongous gains? 

Here’s where the problem lies. All these startups are unlisted. You cannot buy them directly like how you buy shares on the BSE or NSE.

Investing in unlisted ventures is only for big investors (HNIs) or big companies. Even then you may not get to invest in these startups unless you ‘know’ where to find them. 

All a retail investor can do is dream about making stellar startup returns.

But is the opportunity really lost? Should you completely give up on the idea of startup like returns?

No.

There’s a way you can benefit from these startups without being directly invested in them.

How?

By investing in listed companies which are actively investing in startups.

It’s not straight forward...but it works. Like we saw in the case of how investors in Info Edge got an opportunity to profit from Zomato. 

And we also believe this approach to investing in startups is here to stay.

You see, one thing that is becoming crystal clear is that innovation and disruption are no longer the preserve of the large, influential companies.

Today, all you need is a visionary and a few coders. It’s here where the real innovation is happening. 

Companies have recognized this and are figuring out ways to join in. 

Therefore, to foray into artificial intelligence (AI), 5G, drone technology, or electric vehicles (EVs), Indian companies are tapping into these opportunities by investing in startups.

For example Info Edge invested in nearly two startups every month in 2021. It will be fair to say that it has made a killing following this investing approach. 

Now, the question is this...

Are there any other Indian companies that have built up an enviable portfolio of startups that few know of?

Today, I’ll talk about Bharti Airtel.

Bharti Airtel’s startup accelerator program

In 2019, Bharti Airtel launched its startup accelerator program to support early stage Indian tech startups.

This program allows startups to leverage Airtel’s ecosystem. It includes access to a vast range of online and offline distribution network, deep market understanding and platform of global strategic partners.

Airtel’s team also provides advisory services as many startup CEOs still need guidance.

How it works is that Airtel picks up a stake in startups admitted under this program and helps them in raising funds. It also commits to partner with them in a way that both parties will benefit.

Investing in a brighter future

Here are some of the startups which Airtel has invested in.

#1 Vahan

Bengaluru-based Vahan is a tech startup founded in 2016 and backed by famed investors Y Combinator and Khosla Ventures.

Vahan leverages advanced AI to match job seekers with employers. It’s a field with explosive growth potential.

Basically, what Vahan does is it finds jobs for Indians in delivery, driving, retail, BFSI, BPO, and hospitality sectors. Zomato, Swiggy, Dunzo, Rapido, Grofers, and Flipkart, among others are its customers.

When Airtel launched its startup accelerator program in 2019, it brought an 8.8% stake in the startup.

#2 Spectacom Global

In May 2020, Airtel acquired a 10% stake in Spectacom Global. This was Airtel’s second acquisition under the accelerator program.

The startup was founded by Adnan Adeeb and Zeba Zaidi, the creators of highly popular Devils Circuit military-style obstacle races.

Gurugram-based Spectacom creates digital content that allows consumers across geographies and languages to access health and fitness training initiatives and programs.

The startup also carries the exclusive digital rights for promotion of all content for brand Devils Circuit, including the new seasons of its popular shows.

Again, a startup in an area, health, that is riding a megatrend of people wanting to live healthier lives.

#3 Voicezen

This Gurugram-based startup is developing advanced solutions that leverage machine learning, AI, speech to text, and voice technologies, to offer real time analytics to help brands serve customers better.

These solutions will offer Airtel with real time analytics and insights to make conversations with its customers more engaging.

Bharti Airtel has a 10% stake in Voicezen.

#4 Lattu Media

Lattu Media is a Mumbai-based EdTech startup, founded in 2017 by Vivek Lath, Vivek Bhutyani and Arvind Kumar.

It offers learning and development content through streaming platform for kids between 3-8 years of age.

Airtel acquired a 10% stake in Lattu Media back in June 2020.

As the pandemic gave a huge boost to the EdTech sector, Bharti Airtel saw this as an excellent opportunity.

The education industry has changed. As per a report, the online education market for class 1-12 is projected to increase more than 6x in the coming year to become a $1.7 billion market.

A developed platform like upGrad has crossed 1 millio users and is projected to cross the 2 million mark by 2022.

This just shows the rapid growth of EdTech sector and how it’s here to stay after the pandemic.

With this stake acquisition in Lattu Kids, Bharti Airtel added edtech to its premium digital content portfolio and offered quality learning material.

#5 Waybeo

In September 2020, Airtel picked up 10% stake in Kerala-based tech startup Waybeo as part of its strategy to scale up its cloud offerings.

Waybeo focuses on AI based analytics for cloud telephony.

Leads for online businesses are lost due to delays in connecting with potential customers. Waybeo makes these communications hassle-free.

#6 Quikmile

In November 2019, Airtel acquired Gurugram-based Quikmile for an undisclosed amount. This startup builds tech-enabled logistics platforms.

Quikmile aids easy monitoring of fleet management from engine behaviour, tire conditions, mileage, etc.

The logistics sector today is shifting towards digitization and contactless operations. It’s not that the need for logistics would be required just to transport vaccines all over the country. India will need solid logistics infrastructure for decades beyond that.

Airtel has invested in yet another megatrend!

#7 AuthMe

In October 2018, Bharti Airtel acquired Bengaluru-based startup AuthMe ID Services, which specialises in artificial intelligence solutions.

With this, Airtel also has proprietary rights for two flagship solutions developed by AuthMe—Callup AI and Fintech OCR.

Apart from this, Airtel had in February 2017, acquired a stake in Goa-based financial technology startup Seynse Technologies. But the stake was divested this year in January.

Currently, Bharti Airtel is evaluating as many as ten more new startups for potential investment. It shows Airtel’s ever increasing effort to invest in new-age technologies.

Over time, as these startups mature and hopefully come to market or get acquired, we will know if Bharti Airtel’s strategy worked out well or not.

Opportunities galore, but be watchful... 

India's startups are thriving. Deals are being done as fast as ever and huge money is flowing in this space.

Studies have already predicted that 'fintech' startups and other new tech-based companies will have a big edge over banks.

The successful initial public offer (IPO) of Zomato was a turning point for India. After Zomato came CarTrade Tech, the profitable tech startup which also received a thumbs up from market.

There’s also a strong line-up of internet startups IPOs which includes the likes of Paytm, Nykaa, MobiKwik, Delhivery, Byju’s, and Policy Bazaar.

Even though most of these startups are loss-making, the hype is huge.

Traditionally, companies are valued based on their profits. Most of these internet startups don't make profits. People are betting on the tech-factor and how it can be a game-changer.

This could work out. Or not.

Be watchful no matter how you decide to play this startup space.

It’s just begun...

The era of startups has just begun in India and it will provide massive opportunities in exciting markets like drone, blockchain, EV and others to those who can spot the right trends at the right time.

You just need to keep one thing in mind. Be sensible with your picks, have a long term investment horizon and ignore the near term volatility.

Watch this space for more and look forward to our next piece on another company like Bharti Airtel that could be a great way to play the startup opportunity.

Happy Investing!

This article is syndicated from Equitymaster.com

 

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