The Hindu BusinessLine: February 24, 2017
Late last year, YourNest – an early stage investment firm – forayed into Internet of Things with a pre-Series A round of funding to Clovenet, a Singapore-based technology company focussed on powering IoT wearables via its own platform.
In January, YourNest also invested during a pre-Series A round in a defence IoT start-up, CRON Systems.
These investments from YourNest’s Fund II highlight the firm’s intent to pursue innovation and relevance of IoT technologies to large markets like India and South-East Asia.
“There are challenges in India… security or infrastructure challenges. The idea is to solve these Indian problems through technology,” says Vivek Mansingh, General Partner, YourNest.
Nascent but big
The application of IoT technologies in wearables and defence seem largely untapped in India. In wearables at least, the use has been restricted to fitness.
YourNest’s Mansingh says, “Clovenet has taken up the theme of security for women. This may or may not be relevant in the US market… but it’s relevant in India.”
Pawan Gandhi, Founder and CEO of Clovenet, declares: “2017 and 2018 will see the wearables industry maturing beyond just fitness… use cases in wellness and digital wallets will emerge and mature along with their ecosystems.”
With respect to the defence sector, according to CRON’s founder and CEO Tushar Chhabra, there aren’t enough start-ups in “one of the industries with the highest spends”.
Chhabra says: “India has funds of over Rs. 2,000 crore for the modernisation of the paramilitary forces, primarily the Border Security Force, which have not been utilised. There weren’t enough products, hence the fund was lying idle for years with very few companies trying to compete.”
Mansingh says, “Our partners visited the border as due diligence and to see the technology at work… the border is a massive problem for India, but there are other challenges too – how are our nuclear reactors protected; how protected are many of our airports, etc?”
The US market, for example, is way ahead when it comes to wearables, while many brands that cater to India in the product segment aren’t Indian. However, IoT as a broad concept has already found resonance with street lighting, utilities and the likes, in the country.
“IoT is about connecting people, processes, data and things. Water and electricity meters getting connected is one of the first IoT applications to take off in India. Many start-ups are involved in this piece and no one is a leader.
“One of my pet themes, however, is for users of wearables to be alerted about an oncoming heart attack, for example. That stage is not too far,” says Mansingh.
IP creation in IoT-based wearables is not only welcome but also increasingly becoming necessary. In 2014, Clovenet says it embarked on a research project with Future Factory involved too.
Clovenet’s Gandhi says the research venture revealed: mothers wanted a solution to keep connected with their teenage children; many women were keen on simpler solutions that weren’t “over-engineered” as the smartwatches in the market at the time; they wanted wearables to notify them if they had an important call coming in, etc.
CRON’s Chhabra says that with the total size of the defence industry predicted to reach over Rs. 4 lakh crore by 2020, and with spends on gadgets and equipments averaging over Rs. 5,000 crore each year, the shortage of players in India on the supply side is unfortunate.
“The western frontier… a border of over 750 km where the Centre was welcoming new innovative ideas… the only organisation with (an India specific) solution was CRON,” Chhabra claims. He aims to be profitable by the end of this financial year. He also wants to start looking at prospective clients in Middle East, Africa and Europe.
Over the next 4 years, YourNest’s second fund announced in October 2016 will invest in a total of 25-30 start-ups maintaining a “deep focus” on Big Data, Robotics, Artificial Intelligence besides IoT.