India Insight: a success in Silicon Valley

An employee works at a computer terminal against a backdrop of a photo of late Apple co-founder Steve Jobs at Kinfra High Tech Park’s Start-up Village in Kochi city, southern India, on the 13th. October 2012. REUTERS / Sivaram V

BENGALURU, October 11 (Reuters Breakingviews) – There has never been a better time to be a technician in India. New hires at a Delhi-based fintech startup have been promised free BMW motorcycles and a trip to Dubai to watch India compete in the T20 Cricket World Cup which kicks off in the Gulf emirate on Sunday. These are very attractive advantages in a country where foreign brands are ambitious and the sport is akin to a religion.

Incentives are also becoming necessary as demand for local talent skyrockets as India enters its tech age moment. Silicon Valley experienced something similar over 20 years ago, while China has experienced it for the past decade. There is an acute shortage of people with the right training and experience across the ecosystem, and especially the mid-to-senior level staff needed to oversee the rapid ramp-up of teams.

One of the reasons for the squeeze is that India is creating more unicorns – startups worth $ 1 billion or more – at breakneck speed as foreign capital flows in. This is explained by an astonishing rate of digital adoption: India has 550 million smartphone users against 250 million at the end of 2015, according to Counterpoint Research.

A Credit Suisse rating listed 100 unicorns with a combined value of $ 240 billion in March. Three were hit last week, including Licious, a home delivery service for fresh meat and seafood, and CoinSwitch Kuber, a cryptocurrency trading platform that won a first investment in India from Andreessen Horowitz, a California-based company founded and named after two super angel investors. Rebel Foods has also joined the club.

Existing unicorns are also growing rapidly. Ola Electric, the SoftBank-backed two-wheeler maker, nearly doubled its valuation to $ 5.2 billion in just three months, according to a person familiar with the matter. It happened after registering over 100,000 orders for its first slick scooters in just 24 hours in July.

It’s fuel to put more bums into the seats of Ola’s new campus in Bengaluru where he designs cars, tests scooters, and brings biryanis out of his experimental kitchen. It enters the food delivery business through its adjacent rideshare app which competes with Uber (UBER.N). The group’s lively eight-story workplace has 4,000 employees.

The competition for computer engineering talent is such that the company’s co-founder, Bhavish Aggarwal, joked about sending work to a “cheaper” center in San Francisco, where a decades-long tech boom has taken hold. resulted in some of the highest prices in the United States.

In addition to the thriving startup scene, the original tech legends of India that benefited from Western business outsourcing are in high demand, after the pandemic brought more online business. $ 195 billion employer Tata Consultancy Services (TCS.NS), employer of over half a million people, is hiring on campuses at what it calls unprecedented scale and struggling with steep increase employee churn rate, a problem reflected in the industry.

Tata Consultancy’s revenue increased 16% in the three months ending in late September, the company reported on Friday. Boss Rajesh Gopinathan is confident customer demand will remain strong as banks and corporations step up outsourcing and rush to develop climate risk assessment capabilities and more. But rising wages are a threat to the industry’s closely watched operating margins. Infosys (INFY.NS) also grew at its fastest pace in a decade and increased wages.

For now, the couple are in poor health. Infosys has outperformed since the start of the pandemic, beating Reliance Industries (RELI.NS) $ 230 billion, even though the Mukesh Ambani conglomerate has proven to be a magnet for foreign capital from Facebook (FB. O) to Alphabet (RELI.NS) Google. Its share price rise also exceeded the broader benchmark Nifty 50 Index.

Large, well-established Indian companies are rushing to digitize their consumer activities. Ambani is bringing its physical retail businesses online, and the owner of the Tata conglomerate is testing its points-based super-app so shoppers can browse everything from cars to hotels to jewelry through a single online window. Banks are rushing to improve their game as the government backs new digital infrastructure that will reshape the lending market for small and medium businesses.

Other Indian founders may see a near future where companies in the global outsourcing hub may soon have to outsource. The fact that their tech workforce has experience in managing large-scale projects makes their staff employable overseas. This creates an additional headache for those who are already competing for talent with a wide and growing array of multinationals across many industries including Amazon (AMZN.O), Microsoft (MSFT.O), Volkswagen (VOWG_p.DE ) and major global banks like JPMorgan (JPM.N). Finding ways to win the hiring war, however, is at least a luxury issue for an economy ravaged by the pandemic.

To follow @ugalani on Twitter

Editing by Antony Currie and Katrina Hamlin

Reuters Breakingviews is the world’s leading source for financial calendar information. As the Reuters brand for financial commentary, we dissect big business and economic stories from around the world every day. A global team of around 30 correspondents in New York, London, Hong Kong and other major cities provide real-time expert analysis.

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