This paper was undertaken as an individual research by me during the summer of 2018. The main idea behind writing this paper was to familiarize myself with the current startup trends around the world and what makes a start-up attract huge amounts of funding from financial institutions and/or other big co-operations.

1. White Paper on Startup Trends across Developed and Emerging Markets
Objective of the Research:
 To Analyze the current trend in the startup sector in USA, China & India
 Primary sectors which are favored by investors across the markets
 Prominent investors across various sectors in the above markets
Synopsis:
Startups in the past few years have gained a lot of momentum and attention. The past decade
itself has seen a large growth in the number of startup establishments all around the globe.
The success to failure ratio of startups has begun to reduce as well. Over 1000 tech startups
were registered in 2017 in India, taking the total to 5,200 and making India the world's third-
largest startup ecosystem. Similarly, The United States of America and China have seen large
number of startups added to the economy.
Key observation Key Insight and findings:
 Startup are still the flavor of the season and a strong idea with equally capable
founders are successful to receive seed funding both from angel investors and also
VE/PE fund
Research Methodology:
 Primary research using secondary data and off-line journals

2. Findings
The United States of America:
Technology-based start-ups have long been an important driver of America’s economic growth
and competitiveness. According to the Technology Trends Index of USA by KPMG, the
technology start-ups perform well not only as a standalone sector but side by side plays a vital
role in other start-up sectors as well. As of the stock time period March, 2018 the top 3 trending
start-up sectors in the technology helm are Autonomous Vehicle Sector, Smart Grid (Energy
Market) and Quantified Self (Fit Bit Market). The attention that these Start-up sectors get in
percentile is 67%, 54% and 36% respectively. With these sectors getting massive attention
from angel investors and boot-strap investors there are some start-ups where the attention from
investors is fading at a constant and sometimes increasing rate. These sectors are
Machine2Machine (technology that enables networked devices to exchange information and
perform actions without the manual assistance of humans), Telematics sector and Near Field
Communication System Market. The drop in attention that these sectors have witnessed are -
27%, -20%, -19%.
Out of all the start-up sectors, the Automotive Industry is in the early phases of what is expected
to be rapid and fundamental change. The gradual rise of four automotive trends will lead to
massive shifts and changes in the business models of traditional and existing companies and
open the door for other players who have, until recently, not been a part of the industry at all
or only been indirectly tied to the automotive industry.
Overall since 2010, more than $111 Billion has been made in new mobility technologies which
are part of the automotive industry as investments. Out of the $111 billion, more than 60 percent
of the investments come from large chunks with disclosed transaction values greater than $1
billion, and the rest from small investments. However, much can be learned from these smaller
investments because they are related to smaller companies with special capabilities or
technology.
To understand these investments closely, they can also be broken down by trend. The largest
investments were in autonomous solutions and sharing. It’s also worth noting that the pace of

3. overall investment has been accelerating greatly between the periods of 2010–13 and 2014–17,
the average annual investment across all technologies jumped nearly six-fold, from $4.3 billion
per year to $25.3 billion per year. Investments in 2017 to date are as large as the total between
2010 and 2014. While investments in sharing and autonomous solutions account for much of
this acceleration, investments in hardware like sensors and semiconductors are rather stable,
showing a steady trend of consolidation.
Overall, these statistics and current trends go to show that the automotive industry is a
lucrative and profitable sector for start-ups to be based upon as their corporate growth has
been healthy since the early 2010 and with the investments in 2017 being almost equivalent
to the investments between the time frame of 2010 to 2014, the coming decade and further is
also predicted to have continuous growth.
Who are the Investors?
The current start-up trend signals that auto tech investors have their foot on the paddle when
it comes to investing in start-ups whose technology is based on self-driving (autonomous)
cars. Investments in the automotive sphere have steadily increased over the last few years
from 26 deals in 2012 to 87 deals in 2017. Till the end of 2017, auto commerce start-ups have
seen almost 90 deals totaling to $2.3 Billion in disclosed equity funding.
Studying the deal count since 2012, Germany’s BMW till now has been the most active
automaker with more than 30 major disclosed investments out of which 10 were from 2017.
The majority of investments and funding by BMW take place through its corporate fund,
BMW iVentures, which invests across multiple sectors, including autonomous driving,
electric vehicles, AI and automotive cloud technology. BMW iVentures invests across stages
and most of its deals have taken place at the early stages round. Taking the summer of 2017
into account, BMW iVentures invested $38 Million in Shift and $159 Million for Nauto (a
start-up that develops AI enabled camera technology for automotive driving).

4. (The first graph shows the number of deals made by automakers in the fiscal year 2016)
1
1
2
2
3
3
4
5
6
11
18
0 2 4 6 8 10 12 14 16 18 20
Tesla
Volvo
SAIC Motor
PSA
Volkswagen
General Motors
Jaguar Land Rover
Ford
Toyota
Daimler
BMW
Disclosed Investments Since 2016 by Automakers
Number of Deals

5. (The second graph shows the increasing trend in automotive investments over the time frame
from 2012 to 2017. This graph goes to show that automotive start-up funding deals have been
steadily increasing over the years)
Automotive start-ups like New York-based online car sales company Vroom have raised 2
rounds in 2017, totalling $81.8M and California-based peer-to-peer used car marketplace Shift
Technologies have $38 Million in July, have contributed to this lead, with each company
raising multiple rounds.
The following table shows some more automaker investors who have invested financial capital
in up and coming automotive start-ups:
Intel Capital INRIX, PELOTON
Castrol Innoventures PELOTON, ZUBIE
Founders Fund AUTOMATIC, SMARTDRIVE
Volvo Group Ventures Capital LYTX, SMARTDRIVE
Combinator AUTOMATIC, CRUISE
All these statistics if anything point to further acceleration of the automotive sector, with
Toyota recently unveiling a $100 Million AI focussed Venture Fund and Ford scaling up its
tech-focused Ford Smart Mobility division. Moreover, if any industry’s investment activities
are going to follow Newton’s first law of thermodynamics, it ought to be the automotive start-
up Industry.

6. India:
Start-up Tech Vacuum in India:
The foundation of successful start-ups in India has till 2016 been technology based start-ups.
In the beginning of the 21st
century, MakeMyTrip Limited founded and Rediff.com India
Limited became India’s first dot.com company to be listed on NASDAQ. In 2007, Flipkart was
founded and ever since then there has been a surge of big yet successful start-ups such as Ola,
Zomato, Snapdeal, Paytm etc. With an estimated 375 million Internet users, India is now the
second largest Internet market in the world.
However, post 2016 Demonetization, the Indian Tech Start-up ecosystem has seen a dip in the
volume of financial traffic coming towards the sector and due to this new behaviour in the start-
up ecosystem, the number of new start-ups that entered the market were a total of 80 compared
to a whopping 6000 pre demonetization. Further reports showed that from the total start-up
pool, 12 start-ups raised $8.84 Billion through 19 deals. That means, the rest of the 98% start-
ups were left with 30% of the total financial pie. This goes to show that investor faith in new
up and coming tech start-ups has also been falling at a rapid rate
Fintech and Healthcare Start-ups are now the chart toppers:
With Fitbit apps, drug comparison apps and many more platforms under Healthcare start-ups
and PayTM, Mobikwik under Fintech start-ups that are attracting huge amount of funding,
India’s health-tech start-ups appear to be on a fundraising tear.
The trend of innovation and efficiency in many start-up sectors has improved a lot of lives
backed by products and services. From booking an appointment with a doctor to online
pharmacy delivering medicines to your doorsteps, health care has witnessed a lot of
technological innovation in the recent past. Digital Payment Mediums on the other hand, ever
since demonetization in 2016 have been gaining nationwide funding from investors as the

7. increased use of paperless digital transactions has given incentives for more start-ups to step
into the Fintech Market.
If only 2017 is taken into account, statistically, India has added 1000 technology start-ups just
in the first half of the year out of which healthcare technology and financial technology
companies have gathered the maximum funding in the past one year. The total number of start-
ups in the financial technology sector has risen from 275 in 2016 to 360 in the first half of 2017
which indicates that there has been a 31% growth in the number of start-ups. The healthcare
technology sector shares somewhat the same success story with an increase from 250 start-ups
in 2016 to 320 in the first half of 2017 recording a 28% growth in the number of start-ups in
this sector.
In the story of financial and healthcare technology, there has been a direct proportion to the
number of companies to the amount of funding that all the companies have gathered. Fintech
alone has received $200million in 2017 as against only $85 million in 2016. The sector has
seen a whopping 135% increase in funding in the past one year. The funding in the health care
sectors witnessed 129% increase in funding from $70 million in the year 2017 to $160 million
in FY18.
The amalgamation of Artificial Intelligence Technology along with health care and financial
technology and one supporting the other is the main reason why these two sectors have been
getting maximum attention from investors, especially when it comes to getting funding. The
fact that healthcare tech start-ups offer affordable solutions to the basic needs of the society
through innovative models, has also been gaining a lot of investments. Given such numbers,
this make the sectors lucrative for the entire technology sector as well as their own respective
sectors.
Who are the emerging Front Runners?
With Healthcare and Fintech start-ups topping off the charts of being the companies gaining
maximum attention, it is only necessary to point out the companies who are the front runners
and getting huge amounts of funding.

8. Healthcare Start-ups:
 CureFit is a health solutions start-up which is an integrated platform which recommends
the best depending on the individual using the services when it comes to food, fitness
and meditation. CureFit also has smaller services under its belt such as Eatfit, CultFit
and MindFit. With 5 company acquisitions and 3 rounds of funding with over $60
Million, CureFit is one of the top emerging start-ups in Bengaluru with projected
revenue of over $100 Million within just 2 years since the company laid its foundation.
 PharmEasy is an online pharmaceutical portal founded in 2015, which helps the
customers to connect with their respective local medicine shops but also offers free
sample collection service for diagnostic tests by authorised phlebotomists. Further if a
customer does not have a prescription the team of PharmEasy provides it patients with
a valid prescription after the required tests have taken place. The firm has tied up with
nearly 700 doctors across India. The start-up is based out of Mumbai and in a short span
of 2 years, the company has raised more than $25 Million. Firms like Bessemer Venture
Partners and Astrac Ventures are some of the investors that have funded PharmEasy.
 IGenetics which was founded in 2013 in Mumbai, is a firm whose owners had over a
decade of previous experience in healthcare investment, strategy and marketing areas.
IGenetics offers clinically relevant differential diagnosis panels in addition to a highly
accurate range of individual laboratory tests specifically in areas of critical care,
oncology, gynaecology, and infertility. The start-up has raised over $20 Million from
investors such as Manipal Education and Medical Group and CDC Group plc.

9. Fintech Start-ups:
 MoneyTap which is based off in Bengaluru is one of India’s first app based credit
assessing and credit providing online portal. The start-up currently caters to customers
with monthly income ranging from 25000 to 70000. MoneyTap’s proprietary
technology strives to solve this problem of insufficient consumer credit line by targeting
the country’s fast-growing middle-income group. Founded in 2016, the Fintech firm
has gotten more than $12.3 Million in the form of funding from investors such as
Sequoia India and Prime Venture Partners.
 Mumbai based Kissht is a Fintech start-up founded in 2015 that provides instant credit
to consumers for making purchases at digital points of sale. The start-up also provides
cash loans, down payment and EMI options to its customers based on their income and
other financial documents. More than $11 Million has been invested in this start-up by
investors such as Endiya partners and Ventureast.
With these facts and figures, it is safe to say that the Fintech and Healthcare Start-ups will be
the chart toppers of start-ups when it comes to gaining maximum attention from investors for
the foreseeable future.
China:
Ever since 2014, Chinese Start-up companies have gained increasing attention from investors
and Venture Capital Firms. The FY’17 itself saw 10,279 individual investment cases, the
majority of them being targeted at early-stage start-ups as well as pre-Series A and Series A+
financing rounds. Among all the sectors and business models under the investor’s radar, the

10. Sharing Economy, Finance, AI, new retail, and transportation industries are the sectors that
come out on top.
To choose the best out of all the sectors, the sharing economy was the winning industry. They
stood out as winners both for the innovation in the sector and the follow up to that innovation
that is getting huge funds from interested investors as a recognition to their innovation. The
largest funding was made in Ride Hailing frontrunner Didi Chuxing with receiving around an
estimate of $4 Billion for Artificial Intelligence and International Expansion. Bike-sharing
company Ofo ranked second, securing USD 700 million in financing.
(The above Bar Graph shows the top 10 start-ups that were heavily funded in the fiscal year
2017)
Who are the Front-Runners and their Investors?

11. Didi Chuxing:
Didi Chuxing founded in 2012, is China’s top ride-hailing startup that has spread ride-hailing
services around the world. After purchasing Uber’s Chinese operations in 2016 and eliminating
its competition, it looked forward to international expansion and establishing itself as a global
service firm. In March 2017, Didi opened a research and development lab in Silicon Valley to
focus on autonomous driving technologies and AI-oriented security. Since its founding in 2012
till FY’2017, $13 Billion has been invested this ride hailing firm from companies like Alibaba,
Apple and Tencent. In the current round of funding, Soft Bank and Mubadala are going to join
in as investors.
Ofo:
Ofo is a bike sharing start-up that was founded in Beijing in the year 2015. It provides users
with bicycle rental services in China and some other countries. Ofo is one of the largest bike
sharing companies all across China and has recently closed it Series E funding round for the
motive of global expansion. It is crucial for ofo to expand its services to other countries as in
the past few years, China has witnessed a rapid growth in bike sharing companies. The first
ever investors of Ofo were Didi, DST and Global and they are also included in the Sereis E
funding. New additions to the list of investors include Alibaba, Hony Capital and Citic Private
Equity.
Face++
Face++ is a facial recognition firm that provides artificial intelligence products and industry
solutions to enterprise customers based on deep learning algorithms, IOT technology and
Brain++ Engine. The enterprise customers of this firm comprise of five industries that include
financial security, city security, mobile phone AR, business networking, and industrial

12. robots. One of the earliest investors of face++ was Alibaba. The latest series funding round
includes investors such as Alibaba Group Holding Ltd affiliate, Ant Financial, and Foxconn
and together they have invested more than $460 million for Series C on November 2017 to
develop artificial intelligence superpower for global expansion.
Dasouche
Dasouche is a car trading service provider which operates an Online to Offline car trading
platform. It aims to improve car trading efficiency through the Internet and big data technology.
Besides their primary function of Online to Offline trading, Dasouche also operates car trading
oriented financial services to enable customers to purchase cars with instalment payments. The
company was founded in Beijing in 2012 and has currently formed partnerships with 60% of
the car dealers in the country which amounts to more than 100,000 partners. Some of
Dasouche’s existing investors include Sequoia Capital, Ant Financial and Warburg Pincus. The
Series E financing round was led by Alibaba with Warburg Pincus, Primavera Capital, and
CMB International participating. Together these investors have funded the firm more than $335
Million in the Series E funding round. The company plans to use the funds to promote its
financial products based on Ant Financials big data and risk control support, as well as improve
its service efficiency.
Since the time of their establishment, these start-ups take innovation and diversification
seriously which leads to their rapid growth in a short period of time. Thus due to these
attributes, investors see potential which leads to their huge investments in these companies. In
the case of China, the amount of capital investment made in these start-ups has also increased
exponentially in 2017 itself.

13. (The above Scatter Plot Diagram shows the huge increase in funding start-ups in 2017)
Government backed Venture Capitalists have also involved themselves in the funding of these
start-ups to make sure that start-ups pay close attention to the Research and Development of
Advanced Technology which could be put to commercial use for areas such as energy,
manufacturing, Internet security, AI, finance, and infrastructure.
To conclude, it is safe to say that most of the start-ups that secured financing would continue
to hold their dominant position in the future, and they are more likely to win the trust of
investors and secure funding for further development.

14. References:
 KPMG Technology Trends Index USA
 Kasser, Matthias & Tschiesner, Andreas. (2016). Analysing Start-up and Investment
trends in the Mobility Ecosystem. Mckinsey&Company.
 Klich, Tanya. (2014).The top Investors in early stage Start-ups. Article 242702.
Entrepreneur
 Glasner, Joanna. (2017). 2017 U.S VC Market. Crunchbase
 Rawat, D & HV, Harish. (2016). Start-ups India – An Overview. Grant Thorton India
 US Start-up Outlook 2017. Silicon Valley Bank.
 Kashyap, K. (2017). Five Trends That Will Rule India's Startup Ecosystem in 2017.
Forbes Magazine.
 Start-up Watch list. Economic and Political Weekly.
 Shi, K. (2017). The top 10 startups and investors that led China’s tech investment
trends in 2017.