New Delhi: Several large companies, valued at more than $1 billion, will be built over the next decade, serving promising areas such as e-commerce, financial services and rural healthcare in smaller towns and cities, says Anand Daniel, leading venture capital partner. Accel signature.
The growth story in these largely untapped non-urban locations is unfolding amid marked advancements in online, financial and delivery infrastructure, he adds in his blog “The Looming Rise of Startups Serving Bharat” .
Accel is also bullish on companies moving into edtech, upskilling and recruiting solutions, as well as content platforms and consumer companies leveraging AI for these high-potential regional markets.The Leading Stage Fund startup, which has invested in prominent companies including Flipkart, Swiggy and Urban Company, is making bold bets on 'Bharat', a market it defines as middle-income households in Tier 2, Tier 3 and rural areas. .
According to Daniel, there is a huge opportunity if a startup can offer exceptional value for this target group at the right prices and taking into account regional dynamics.
"Meesho, Physics Wallah and Zudio are just the dawn. Many more Bharat-adapted companies are yet to emerge," writes Daniel. So far, delivery logistics problems, low propensity to pay, prohibitive distribution costs and Unsatisfactory returns on marketing investment posed challenges that generated skepticism about companies' ability to earn adequate returns.
But now, with its thriving online, financial and delivery networks, this untapped market represents the next frontier for building successful businesses, Daniel maintains.
The value proposition of the incumbent (“established players”) lacked focused attention on the diverse and diverse customer segments in India. Most of these companies are not built in a way to serve Tier 3 and rural areas of the country. As the non-urban market attracts, "platforms that can leverage technology, innovate capital expenditures and build distribution models efficient to offer better products and services at the same or better price will surely open up a large potential market," says Daniel.
The numbers speak for themselves: Today, half of the richest 20 percent of households are evenly distributed in rural India.
The top 20 percent of the rural population has a higher monthly per capita expenditure (MPCE) than about 50 percent of the urban population, the blog states. "This highlights significant purchasing power in rural areas that sometimes often overlooked. We believe there will be omnichannel platforms in commerce, health and education that will address the needs of this target group," says Daniel.
“Accel expects multiple large enterprises, valued at more than $1 billion, to be built for Bharat (non-urban households) in the next decade,” he adds.
While India's urban consumers have enjoyed fast commerce, the best financial products, on-demand professional services and a multitude of brands tailor-made for them, smaller towns and cities still await the majority of these offerings.This market untapped "highly aspirational" non-urban area is waiting to be exploited, says Daniel.
According to the blog post, there is a huge opportunity for a startup to create products tailored to their needs at the right price.
Daniel notes that there has been an increase in demand for used iPhones, 125cc bicycles and double-door refrigerators among the non-urban public; The evolving preferences reflect a willingness for offerings that match aspirations for a better lifestyle and upward mobility. Accel has invested in several early Bharat companies such as Apnamart, Citymall and Arivihan, and the blog highlights subdomains e-commerce, fintech, edtech, health and consumer brands as immense potential for startups interested in accelerated growth.
Several large companies will be built in these subdomains in the next decade.
"Innovative founders must make this market their core and leverage advancements to create scalable and economically viable solutions tailored to the changing needs of Bharat," says Daniel. More companies focused on creating e-commerce marketplaces for Tier 3 cities are needed and beyond.
"We believe vertical markets will emerge across multiple sectors (food, beauty, apparel, medicine, and agriculture) to meet the unique needs and nuances of these markets," Daniel writes.
In the fintech sector, he says, BFSI (banking, financial services and insurance) will generate significant value, and a large part of it can be captured by experienced people creating new-age fintech companies. "From personal loans to livestock loans or housing finance, a new set of lending companies can leverage technology and offer customized products at the right price to cater to Bharat's aspirational and underserved target group.”
Healthcare is also an open opportunity for innovators, whose scope ranges from efficiently managed chains of mobile health clinics to affordable diagnostic solutions and trusted generic drug brands to solutions targeting the growing demand for fertility treatments at Tier 3. and beyond.
The blog written by Daniel further states that solutions that provide primary education, upskilling and offer certification programs at the right price are very limited and very necessary given that India has a sizeable base of unemployed youth."With the advent of AI, we are seeing that platforms reduce the cost of production and delivery," says Daniel.
The growth story in these largely untapped non-urban locations is unfolding amid marked advancements in online, financial and delivery infrastructure, he adds in his blog “The Looming Rise of Startups Serving Bharat” .
Accel is also bullish on companies moving into edtech, upskilling and recruiting solutions, as well as content platforms and consumer companies leveraging AI for these high-potential regional markets.The Leading Stage Fund startup, which has invested in prominent companies including Flipkart, Swiggy and Urban Company, is making bold bets on 'Bharat', a market it defines as middle-income households in Tier 2, Tier 3 and rural areas. .
According to Daniel, there is a huge opportunity if a startup can offer exceptional value for this target group at the right prices and taking into account regional dynamics.
"Meesho, Physics Wallah and Zudio are just the dawn. Many more Bharat-adapted companies are yet to emerge," writes Daniel. So far, delivery logistics problems, low propensity to pay, prohibitive distribution costs and Unsatisfactory returns on marketing investment posed challenges that generated skepticism about companies' ability to earn adequate returns.
But now, with its thriving online, financial and delivery networks, this untapped market represents the next frontier for building successful businesses, Daniel maintains.
The value proposition of the incumbent (“established players”) lacked focused attention on the diverse and diverse customer segments in India. Most of these companies are not built in a way to serve Tier 3 and rural areas of the country. As the non-urban market attracts, "platforms that can leverage technology, innovate capital expenditures and build distribution models efficient to offer better products and services at the same or better price will surely open up a large potential market," says Daniel.
The numbers speak for themselves: Today, half of the richest 20 percent of households are evenly distributed in rural India.
The top 20 percent of the rural population has a higher monthly per capita expenditure (MPCE) than about 50 percent of the urban population, the blog states. "This highlights significant purchasing power in rural areas that sometimes often overlooked. We believe there will be omnichannel platforms in commerce, health and education that will address the needs of this target group," says Daniel.
“Accel expects multiple large enterprises, valued at more than $1 billion, to be built for Bharat (non-urban households) in the next decade,” he adds.
While India's urban consumers have enjoyed fast commerce, the best financial products, on-demand professional services and a multitude of brands tailor-made for them, smaller towns and cities still await the majority of these offerings.This market untapped "highly aspirational" non-urban area is waiting to be exploited, says Daniel.
According to the blog post, there is a huge opportunity for a startup to create products tailored to their needs at the right price.
Daniel notes that there has been an increase in demand for used iPhones, 125cc bicycles and double-door refrigerators among the non-urban public; The evolving preferences reflect a willingness for offerings that match aspirations for a better lifestyle and upward mobility. Accel has invested in several early Bharat companies such as Apnamart, Citymall and Arivihan, and the blog highlights subdomains e-commerce, fintech, edtech, health and consumer brands as immense potential for startups interested in accelerated growth.
Several large companies will be built in these subdomains in the next decade.
"Innovative founders must make this market their core and leverage advancements to create scalable and economically viable solutions tailored to the changing needs of Bharat," says Daniel. More companies focused on creating e-commerce marketplaces for Tier 3 cities are needed and beyond.
"We believe vertical markets will emerge across multiple sectors (food, beauty, apparel, medicine, and agriculture) to meet the unique needs and nuances of these markets," Daniel writes.
In the fintech sector, he says, BFSI (banking, financial services and insurance) will generate significant value, and a large part of it can be captured by experienced people creating new-age fintech companies. "From personal loans to livestock loans or housing finance, a new set of lending companies can leverage technology and offer customized products at the right price to cater to Bharat's aspirational and underserved target group.”
Healthcare is also an open opportunity for innovators, whose scope ranges from efficiently managed chains of mobile health clinics to affordable diagnostic solutions and trusted generic drug brands to solutions targeting the growing demand for fertility treatments at Tier 3. and beyond.
The blog written by Daniel further states that solutions that provide primary education, upskilling and offer certification programs at the right price are very limited and very necessary given that India has a sizeable base of unemployed youth."With the advent of AI, we are seeing that platforms reduce the cost of production and delivery," says Daniel.
