siliconindia | | February 20178THE BULL CASE FOR INDIA'S TECH SECTORBy David Lawee, Partner, CapitalG-GoogleWe have been hearing questions in 2016 about the sustainability of some of India's largest in-ternet companies. Subsidizing growth through deep discounting isn't working out the way in-vestors expected it to and is leading to a drop in investor interest. At the same time, compa-nies with strong fundamentals and unit eco-nomics are being rewarded on a relative basis. The pullback from the heady days of 2015 is positive in our view; it forces entrepreneurs to be resourceful and pace investment to the size of today's market. Entrepreneurs who have de-fined their addressable market expansively are better off. Often, this requires thinking outside the box and looking at solving problems more expansively than their counterparts in the U.S. To be clear, we could not be more bullish on the long-term prospects for India's econo-my, its people and its technology sector. In-dia's macro indicators for GDP growth, Inter-net penetration, wireless infrastructure and the quality of Internet products and services look better than ever. In 15 years, India will be one of the world's largest economies. As exciting as the long term prospects are, it is critical to appreciate that we are still in the very early in-nings. There are only 60-70 million people in India today with annual incomes over $5,000. India's online transacting customer base is still fewer than 100 million users. India's GDP at $2 trillion is far closer to that of the UK than China; so today's Internet and tech-nology economy will not resemble China for some time.The businesses that will survive the cur-rent turmoil and capture the growing market opportunity understand these fundamental re-IN MY OPINIONHeadquartered in the U.S., CapitalG-Google is a late-stage venture capital fund focused on larger, growth stage technology companies, and invests for profit rather than strategically for Google.Indian consumer Internet businesses have the benefits of high quality tech talent similar to that employed in the U.S.David Lawee
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