A few weeks ago Omar Siddiqui, 30, an American of Indian origin arrived in Bangalore with a mission—to hire key engineers and set up grabHalo, an online social network which aims to connect people across geographies. Siddiqui, an engineer from Columbia University with an MBA from Stanford has met some promising candidates for his ‘very early stage’ company.
In an unmistakable trend, scores of Ivy Leaguers and top foreign university graduates, like Siddiqui who graduated in 2010, are turning to India shortly after finishing college, to become entrepreneurs. What started as a trickle two years ago is turning into a veritable stream.
As the numbers build up, India’s technology eco-system could get a much-needed innovation boost. And the country could hope to beget the next few billion dollar companies. “It is a gold rush. heady and exuberant,” describes Anshuman Bapna, 34, who arrived in Bangalore two years ago to start up Mygola, a personalised online travel planner. “The time spent in the United States after college is shrinking. Most graduates don’t want to waste a year even, they are heading out straightaway.”
Bapna graduated from Stanford University’s Graduate School of Business in 2005, worked for Deloitte and Google before moving to Bangalore in 2009. He co-founded Mygola with a former classmate from IIT Mumbai and hired a team of engineers for its operations. Mygola has just received funding from two venture capital firms from the Bay Area.
Sameer Maheshwari, 35, who graduated from Harvard Business School with an MBA in 2007, and Prashant Tandon who graduated from Stanford’s Graduate School of Business in the same year, quit their investment banking and consultancy jobs to arrive in New Delhi in 2009. Their company Healthkart, set up in March 2011, is already dominating healthcare e-commerce in India. The company received seed funding from venture capital firms Sequoia Capital and Kae Capital in mid-2011.
The recent trend is a radical shift. The homecoming of the first wave of returnees, Indians or even those of Indian origin, was to do with caring for aging parents or raising children in Indian culture. “In the old days, the central theme was to move to India for personal reasons and then contemplate starting a company. These days, the core idea is to start a company. in India,” says Bapna. It is about giving your business the best chance of surviving and scaling up, he said.
The tipping point is the 2008 recession, says Ramesh Kumar Shah, angel investor and treasurer of the Harvard Business School alumni network called the HBS Club of India. With shrinking job prospects on Wall Street, entrepreneurship in fast-developing economies like India is appearing even more attractive.
Not just Indians but second-generation Americans of Indian origin and even foreigners are coming to launch start-ups, says Shah. “India represents a greenfield opportunity where English is the language of business, and Ivy League grads have a strong, ready country network to tap into,” says Shah who is co-founder of HBS Angels of India, an angel investor network comprising of Harvard alumni.
India’s domestic market is exploding and of an impressive size where there is much pioneering still left to do. Ambitious start-ups as well as product companies find great value in setting up in India because of the talent and the cost, says Siddiqui of grabHalo. In Silicon Valley, too much money is chasing scarce talent after the successes of the Zynga and LinkedIn public offerings, he said. “Coming here is about giving your business the best chance to survive and scale up.” Siddiqui, who worked in a multinational bank, is the envy of many of his Ivy League peers for the ease with which he has made the transition from college to India.
The new trend accentuates the obscuring of boundaries for start-ups. “The notion of `moving back’ to your country is a bit outdated,” says Bapna. “It is a business decision, more like moving back and forth.” In Bapna’s mailbox, there has been a recent spurt of questions from new graduates such as, “How easy is it for start-ups to hire and retain talent?”
On the flip side, aspiring entrepreneurs need to deal with uncertainty that is doing business in India, says Raj Chinai, a returnee himself after stints with Yahoo! and Bank of America Merrill Lynch who is now the Bangalore-based principal partner in venture capital firm IndoUS Venture Partners. “Expectations may not always match ground reality, you have to have the mindset to make it in this country,” says Chinai, who has degrees from Harvard and the Kellogg School of Management.
Returnees lament that the quality of life in Indian cities is not great. Besides shopping, watching a movie or hanging out with friends, there are few other entertainment avenues. “But for a start-up entrepreneur that may be a blessing as India presents zero distractions.”
Shah, the entrepreneur and angel investor says he is seeing traction in non-Indians—with no Indian connections whatsoever-too wanting to make the move. “An American woman studying at Harvard was here a few weeks ago to recce India for her start-up idea.”