More S’pore start-ups scale up in India – the gateway to Asia, Europe
First published 08 Aug 2023 / Last updated 29 Aug 2023
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: More S’pore start-ups scale up in India – the gateway to Asia, Europe
BENGALURU/CHENNAI – More Singapore start-ups are setting up offices in India to scale up their technology in a large and diverse market that is fast becoming a gateway to Asia and Europe.
From satellite mapping and AI-enabled data analysis to cleaning and e-waste recycling, at least 300 Singapore start-ups have entered India since 2019, according to Enterprise Singapore (EnterpriseSG), an agency championing enterprise development under the Ministry of Trade and Industry.
The linguistic and regional diversity of India’s 1.42 billion people offers Singapore’s early-stage entrepreneurs ample opportunities to deepen their capabilities and test their products on a varied consumer base.
“India is like a continent in itself,” said Mr Nishant Kumar, who leads the India unit of SmartClean, a data-driven cleaning solutions start-up founded in Singapore in 2017. “It is a good place to scale up our technology, and develop the solution for diverse markets that are sensitive to cost and labour.”
Once trained and perfected in Indian conditions, the company’s digital cleaning management services are ready to be replicated for its commercial real estate clients in Indonesia, Dubai and Malaysia.
Likewise, robot maker Botsync, established in Singapore in 2017 by four twenty-something Nanyang Technical University graduates, set up an assembly plant and research centre two years later in India’s technology hub, Bengaluru.
Demonstrating its flagship robotic lifter for logistics and manufacturing companies at the Bengaluru plant, Botsync’s co-founder, Mr Nikhil Venkatesh, said he “moved to India to expand technical operations”. At 27, he is the oldest of the four entrepreneurs.
In the past year, Botsync sold its robots to Ashok Leyland, one of Asia’s biggest truck and bus manufacturers. With the “credibility of patenting robotics technology in Singapore and field experience in India”, it has found buyers across South-east Asia too.
EnterpriseSG, formed in 2018 to help small and medium-sized Singapore companies innovate and internationalise, has seen a steady increase in interest in India.
In 2022, it supported 100 Singapore companies to seek new opportunities in the market, up more than 40 per cent from pre-Covid-19 levels in 2019.
“As India continues to urbanise and become more digitally competitive, it has increasingly become an attractive market for companies operating in the infrastructure development, manufacturing, and lifestyle and consumer sectors,” said Mr G. Jayakrishnan, an executive director overseeing EnterpriseSG’s work in South Asia, the Middle East and Africa.
“Tech innovations and sustainability solutions, which cut across all sectors, are also top-of-mind for Singapore companies looking to enter the market and capitalise on new government initiatives catalysing growth in the digital and green economy.”
Multinational conglomerates already in India are “an important pool of customers” for Singapore start-ups, he added.
Digitally savvy labour pool
India’s young population, 65 per cent of whom are under 35 years old, is an enormous digitally savvy market and labour pool. Over 1.5 million engineers graduate in India every year.
“I won’t be able to employ 180 engineers in Singapore. I can do it only in India,” said Mr Suresh V. Shankar, co-founder of big data analytics company Crayon Data, pointing at the dozens of young men and women working in its colourful open-layout office in Chennai.
The nine-year-old Singapore company uses artificial intelligence to analyse data and personalise services for global clients such as banks, credit card companies and fintechs, including Visa, India’s HDFC Bank and Abu Dhabi Islamic Bank. As the volume of work grew, Crayon set up a data analysis centre in the South Indian city in 2019.
“The average age of our employees is now under 27. Many joined us straight after graduating, while in Singapore, the hiring would have been more lateral, of employees from other companies, and so more expensive,” said Crayon co-founder Aarti Ramakrishnan, who leads the India operations.
Real estate group CapitaLand, which pioneered business parks in India by constructing the country’s first in 1994 in Bengaluru, is now building four data centres in Noida, Mumbai, Hyderabad and Chennai.
CapitaLand India’s chief executive, Mr Gauri Shankar Nagabhushanam, said that after building 31 business and logistics parks in India for 250 multinational and Indian companies, data centres are “a logical next step” as “the amount of data that needs to be stored securely is growing”.
Challenges of land acquisition, confusing policies
Although India’s infrastructure, education and per capita income have improved steadily over the years, Mr Nagabhushanam said that the toughest obstacles of land acquisition, power uncertainty and confusing government policies still remain.
“In the light of the US-China trade war and China Plus One diversification, India and Vietnam have become the new shores. Vietnam has better policies and infrastructure, but the labour pool, (operational) cost and incentives the Indian and state governments offer are better,” said Mr Nagabhushanam.
In 2019, EnterpriseSG and Singapore-based early-stage funder Anthill Ventures launched an acceleration programme called Global Innovation Alliance (GIA) in Bengaluru to help more Singapore start-ups meet market entry requirements as they venture into India.
The programme’s immersion workshops and innovation hubs have facilitated the entry and expansion of around 300 Singapore start-ups in the Indian market. It also offers grants for market-readiness and scale development.
This includes aiding Singapore companies to enter fledgling Indian sectors.
Satellite-imagery-based analytics start-up Skymap Global, for instance, tied up with the Indian Space Research Organisation (ISRO) in 2016 to provide data analytics as the country was beginning to privatise satellite and space applications.
India became the first country to land a spacecraft in the Moon’s south polar region last Wednesday.
“India gives a lot of value to satellite data because of the amount of work that scientists and state-sponsored institutions have done on remote sensing. It has research capability, advanced facilities and lots of experts,” said Skymap founder Abhay Mittal.
Skymap now helps uncover insights using artificial intelligence from satellite and aerial imagery for defence, agriculture and crop insurance, urban development, mining, forestry and infrastructure.
Aware that India produces 4.5 million tonnes of electronic waste each year, with the volume growing at the world’s fastest rate of 29 per cent annually, Singapore electronic waste management company Vans Chemistry established a recycling and metal extraction unit in Bengaluru.
“In five years, India will be the largest e-waste generator after China and the United States because of digitalisation, higher education, increased manufacturing and aspirational consumption of technology,” said Vans Chemistry founder Venkatesha Murthy.
As the Indian government attempts to regulate the largely informal and unmonitored recycling process, Mr Murthy hopes to offer “scientific and environment-friendly technology” to municipalities, electronics producers and consumers.
In the Bengaluru office, the Singapore resident who hails from Karnataka state can be seen instructing workers prising open printer motherboards in the local language Kannada.
He conceded that familiarity with India went a long way in navigating a hyperlocal and undeveloped segment like recycling.
Many Singapore start-ups in India happen to have India-origin founders, but this was less relevant when working with multinationals, said Mr Eugene Goh, director of JM Vistec System.
He was in Chennai in July to diversify his business from China, and sell the company’s industrial cameras, optics and lighting for sensor-based inspections to global manufacturers in India.
As Mr Goh talked to potential business partners in India about more automation for efficiency, he found that “our Singapore credibility and Chinese experience” mattered greatly to start-ups or big conglomerates which “want to service the local market, and then be able to supply to the whole world”.
Singapore companies eyeing India also face the challenge of choosing the right location for their businesses – a decision that can impact their tax liability, regulatory requirements, gestation period, transport costs and ability to attract talented employees.
“Each state government offers different policies, each place has its pros and cons,” said Mr Jeyesh N.M.P., southern regional director of trade association Confederation of Indian Industry.
He added that Singapore’s historic, cultural and financial ties with southern India, and the region’s relative political stability, gave it a head start.
Appeal of Chennai and Bengaluru
The southern cities of Chennai and Bengaluru are home to the largest number of Singapore organisations, followed by India’s capital, New Delhi.
Manufacturing and export-oriented companies such as Singaporean sofa manufacturer HomesToLife (HTL) favour the coastal city of Chennai for its smooth roads, availability of large land parcels and closeness to seaports.
After 29 years in China, HTL decided to shift some of its manufacturing to India in 2021 “to mitigate the risk and challenges from geopolitical tensions, and continue to supply our key customers in the US”, said Ms Celeste Phua, its global brand head.
In its 300,000 sq ft assembly and sewing plant in the Oragadam industrial corridor, 90 minutes from Chennai, young workers stitch leather seats in powder blue, yellow and beige, overseen by factory manager Liew Ah Leh, HTL’s first Singaporean employee to move to Chennai with his family after living 20 years in China.
The leather is still imported from HTL’s Chinese tanneries, said Ms Phua. Although the India operations are “only a tenth of what we have in China”, manufacturing in India is crucial for the firm to export sofas to the US, the Middle East and Europe.
Tech start-ups, meanwhile, prefer entrepreneurial and cosmopolitan Bengaluru. Despite its crumbling public infrastructure and infamous traffic snarls, weather that feels like spring 10 months a year and fast-growing social infrastructure make it popular among techies.
Although he grew up in Chennai, Botsync’s Mr Venkatesh set up his robotics assembly plant in India’s Silicon Valley as he was sure to find skilled experts. “Bengaluru is so much cooler – both in climate and lifestyle,” he said.
Mr Rijul Jain, investment head of BAce Capital, a venture capital fund based in Hangzhou, China, that invests in early-stage companies in emerging economies, said that the firm’s “entire India portfolio of start-ups is located within 2km” of Koramangala and HSR Layout, two Bengaluru neighbourhoods.
“The tech people who made money in Bengaluru decades ago bought houses here, and now the funding, mentoring and scaling ecosystem for start-ups is here,” he said.
Listing Bengaluru’s social life, international schools, apartments, branded stores, restaurants and bars, Mr Nagabhushan said: “This social infrastructure is like any big city in the world. It makes it easier to convince a young workforce, expats or foreign-returned Indians to move here.”
