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Business News/ News / India/  Unicorns having challenging times in India: Indian-American entrepreneur Rangaswami

Eminent Indian-American entrepreneur MR Rangaswami has said that in the past three-four years, a lot of Indians who were living in the US and other countries, as well as, Indian venture capitalists and others invested heavily in India.

However, the period is over now. Those unicorns now are having challenging times with the recession, with these unicorns being funded at very high valuations.

"So, the market in India is correcting right now with these unicorns where some of them will disappear, some will merge, and others will have a challenging time getting to the next level where they can either have an exit or go public," Rangaswami said.

He said investors in the US are monitoring the situation in the country and as a result, the flow of money into startups in India has slowed dramatically in the past 12 to 18 months.

Speaking about the Indian startup ecosystem, Rangaswami said, "There are some vestiges of old rules and regulations that need to be changed in India".

According to the Indian-American entrepreneur, there are issues with the Angel Tax in India; issues dealing with incorporation and moving companies from India to the US require a lot of work; and companies coming back from the US to India require a lot of work.

He suggested that such rules need amendments to facilitate the easy movement of money and companies between India and the US.

Further Rangaswamy added that he has not seen any breakthrough technologies in India. " Some of them tend to be copycat deals. They look like a US company, but working in an Indian model. Some tend to be add-ons and functional improvements to the software. But in terms of breakthrough technologies, we have not seen too many companies in India come out with that type of product or solution at this point," he said.

Rangaswami said that successful Indian startups are coming to Silicon Valley to take a pie of the American market.

Around 300-400 highly successful Indian startups have moved to the US.

“This is a recent phenomenon, that's happened in the past, three-four years when there is a lot of enterprise software as a service SaaS companies that were started in India, using Indian talent, Indian founders, but the customers happen to be in the US since US is the biggest IT market," explained Rangaswami

Rangaswami is the founder of Indianspora. He said, "We are trying to see if these people need mentorship, can we mentor them? Can we advise them? Can we help them get funding? So, this is something that the Indiaspora group is figuring out at this point because a lot of our members here in the US are the leading VCs who have invested in these companies and these CEOs have come here".

Rangaswami said, "People come to Silicon Valley, we are sitting here in San Francisco, people come here because of the craziest of entrepreneurs. The venture investors here also invest in those crazy ideas. The US market lets those companies kind of unfold and work out. For example, here in San Francisco, we have driverless cars running around the entire city".

Calling the environment the biggest reason for innovation disruption, he said, "I'm not suggesting India become like the US, but in its own way, I think it's improving and you'll get its own kinds of innovation".

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Updated: 06 Jun 2023, 02:06 PM IST
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