Startups Journey: October 6, 2018 – Author: Girish Shivani
DeepTech – Is this another technological buzzword or a promising business model for technology-based disruptions in the real world? Short for Deep Technology, DeepTech is an industry terminology that encompasses today’s most innovative technologies such as Artificial Intelligence (or AI), Machine learning (or ML), Internet of Things (or IoT), and Augmented and Virtual Reality. A DeepTech startup is any new business enterprise that is founded to explore and build on any of these industry technologies and create revolutionary technology solutions that can either create new industries or disrupt existing ones. These solutions include advanced medical devices that can save human lives, data models to solve global hunger or poverty, and clean energy models to stop climate change, and much more.
The DeepTech Startup Ecosystem in India and Industry Projections
Over the last decade, India is witnessing significant growth in its startup ecosystems, thanks to consumer-centric companies such as Flipkart, Ola, and Snapdeal. The startup ecosystem is slowly shifting back towards advanced technologies such as AI and machine learning.
An independent study conducted by Analytics India estimates that the AI industry alone in India is valued at around $180 million in annual revenues. With an approximate number of 28,000 AI professionals in the country, India is ranked globally with the 3rd largest AI startup ecosystem (according to a 2017 NASSCOM-Zinnov market report). As per the same story, India also ranks 3rd globally for the highest number of startups with over 5000 startups and an addition of over 1000 enterprises in the year 2017 only. A NASSCOM research study reports that the investor funding for the Indian AI startups has increased from $44 billion to $73 billion in the space of just one year.
5 Major Industries Being Disrupted by DeepTech
The growth of DeepTech technologies along with the support of investor funding is having a disruptive effect on the functioning of several existing industries including:
AI-based healthcare technologies are expected to exceed a valuation of $6 billion in the next three years, up from an overall valuation of $600 million in 2014. The combination of AI and machine learning is disrupting the healthcare sector through the deployment of medical diagnostics, virtual health assistants, and the growth of mobile health apps. Indian startups such as the Bangalore-based Aindra and Artelus are using AI and machine learning technology to make healthcare more affordable and accessible to all Indians.
2. Military defence
AI and Robotics are also bringing disruptions to the military defence industry. The capabilities of these technologies are driving the shift of the U.S. Department of Defence from traditional weapon system to smaller AI- and Robotics-based systems. Traditional defence contractors are facing an industry challenge from smaller technology players in the development of air defence systems and precision strike weapons. The Indian government is also planning to include AI to improve the military preparedness of the armed forces through the inclusion of unmanned tanks, aerial weaponry, and robotic forces. Closer home, one of YourNest Venture Capital’s portfolio companies, Cron Systems, is a Surveillance IoT solution for perimeter security and intrusion detection at international borders counts and is a disruptive startup in the international border defense sector. It implements cutting-edge technologies designed at a fraction of the costs of other leading products in the same space. This solution is being deployed for perimeter protection in both homeland security, key installations and corporate/industrial areas beyond India including Malaysia, Kenya and Bangladesh.
Technology is disrupting the way shoppers buy products and how retailers promote them. Advancements in the fields of AI, Robotics, and Consumer analytics are making both online and offline shopping more attractive and appealing to customers. U.S.-based traditional retailers such as Macy’s and Nordstorm are using technology-based products such as Magic Mirrors to let shoppers check out virtual clothes in the fitting rooms.
Bangalore-based Hyperworks is using AI in the retail food market to scan food items using computer vision instead of barcodes. This company is among the 22 startups that are partnering with a global retail giant, Target. Another Indian startup company, Cogknit is applying machine learning to make shopping more inclusive for all customers, including the visually challenged. Talk about Amazon Go.
With the use of AI and machine learning algorithms, DeepTech is having a significant impact on the way financial services are offered. Among the major gamut of financial services that will be impacted by AI includes personalised financial services, the overall cost of financial services, wealth management, and voice-assisted banking.
One life-impacting usage of AI is the work being done by Arya, a young startup that joined the YourNest portfolio in 2015 and has changed the way banks and insurance companies do business: with totally automated processes that leverage AI, machine learning and natural language processing at high speeds and unprecedented accuracy levels, Arya has been able to reduce cheque processing and clearance time for banks from 3 seconds to 0.3 seconds and, for an insurance major, its systems scan and read all documents (including x-ray reports, handwritten prescriptions, etc) so that claims can be processed in 15 minutes instead of the average six hours.
The convergence of Internet, AI and IoT are also transforming the agriculture industry. This includes innovations such as the use of aerial robotics for pesticide spraying in farms, the growth of organic farming, along with the use of water monitoring solutions to reduce the wastage of water in modern farms.
The National Institute of Agricultural Extension Management has signed an MOU with IIT Hyderabad to initiate an AgriTech Startup accelerator program. This program is aimed at the use of the latest DeepTech technologies and innovations to solve agriculture-related problems in India. Founded in 2017, AgroWave a startup plans to innovate agricultural supply chains using analytics. Another Indian startup, Farm Again has been successful in converting over 2,500 acres of land in India into organic farms using technology tools.
How Can DeepTech Startups in India Make a Global Impact?
Analytics India reports that over 700 Indian startups are offering advanced technology solutions with AI being the fastest growing segment. As shown by the 2017 acquisition of the AI startup company, Halli Labs by Google, Indian DeepTech companies are drawing global attention in the levels of funding, which are only next to the China and the U.S.
A Chennai-based technology-based voice assistant and speech recognition company, Uniphore Software Systems raised funding from the former Cisco CEO, John Chambers in November 2017 and is one of YourNest Venture Capital’s investees. Similarly, SIFTR Labs, a Jaipur-based AI startup, which was founded in 2015, was acquired by Chinese mobile internet provider, APUS in March 2017.
An increasing number of global tech conglomerates are being drawn to the Indian startup ecosystem to invest in advanced and innovative technology solutions. These auger well for advanced tech startup companies in India, which is set to grow at a healthy CAGR of 30% in the coming future.
With the fastest growing base of technology startups in the world, India can capitalise on its diverse technology pool to establish itself as an innovator. The growing value of funding and investment into the Indian DeepTech sector is advancing DeepTech technologies to disrupt multiple industries such as healthcare and retail and create better social and economic value for customers and all the involved stakeholders.