Startup Sectors to watch out in 2016

With an eventful year drawing to a close, it is time to look to the future in anticipation of what 2016 can bring. Let’s look at some of the sectors that will do well in 2016.

Internet of Things (IoT) – Around the world Internet of Things is hot and the same is the case in India. IoT enables objects to collect data and transmit it over the internet, which means things or objects look and behave a IoT like it did in Sci-Fi movies. We will see some interesting applications emerging in sectors such as automotive, construction, fitness and healthcare where objects in our lives are getting connected.

Software as a Service (SaaS) – When Twitter acquired ZipDial early this year; it marked the coming of age for India SaaS startups and further reaffirmation of the quality of new companies in the space. Boutique and niche cloud consulting and services companies such as TurningCloud will drive the next generation of applications. SaaS has gone on to encompass a wide range of functions and global SaaS companies operate across like cloud infrastructure, security, marketing, sales, HR, ecommerce, retail and others.

Marketplace Lending – Born from the ashes of the financial crisis in 2009 and the widespread mistrust of the established banking channels, alternative finance platforms have become much bigger than anyone could have imagined. Using technology as their main weapon, these platforms has gone on to create quite a bit of ripple.

Education – India’s educational gaps are well known and the opportunities it provides for participation is well chronicled. Startups have managed to create a niche around Education Technology or commonly known as EdTech. While EdTech is relatively small in the space, startups like FutureVidya, EduPro App, EduKart, and Toppr are doing a stellar job in addressing problems in the education space.

Healthcare – India’s healthcare sector is expected to be $280 Billion in size by 2020, growing at a compound annual growth rate of 16 percent. Practo, Portea and Lybrate are great examples in Healthcare sector. The year 2016 is likely to see the sector grow even stronger as it starts tackling even larger and serious healthcare problems in the country. 

Best startup sectors in 2015

With the year almost drawing to a close, there are startup sectors which turned out to be major players in coming years. Beginning early this year, there was a great rush of venture money. As a seed round of a million dollars became the new norm, startup started mushrooming throughout the country. Some of the sectors that saw significant interests are IoT and Wearables, Hyperlocal, Food Tech, Logistics Management and Local Services Marketplace.

With the likes of Grofers, BigBasket and Pickingo vying for attention as on demand delivery partner, there is an explosion of Hyperlocal services. From delivering nuts, vegetable, to transportation services, Hyperlocal startups have managed to grab their fair share of eyeballs and investor money. However, this sector has become very competitive and it will be interesting to see how these startups scale and evolve in the future.

According to startup analyst firm Tracxn, about 90 startups and 50 plus startups have been founded in 2014 and 2015 in Logistics Management. Top funded startups include the likes of Delhivery, TinyOwl, Ecom Express and Gofers. The sector has seen a lot of interest because of the growth of ecommerce in India. This has led to the emergence of local delivery startups, food delivery startups, intra-city, inter-city, overseas, ecommerce shippers and freight aggregators.

The entire Internet of Things (IoT), which has meant over a billion dollars have been invested in startups in the IoT space globally over the past few months. Big VC firms like Sequoia Capital, NEA, Andreessen Horowitz and others have made a sizable investment in the space. On the other hand Wearables segment has seen a number of significant products taking over our life. Fitness bands are the most popular Wearables today, followed by smart watches. It is not surprising that many startups now consider Wearables the next big things.

Food tech is perhaps the most surprising sector. This has been mainly because the food and restaurant industry till now has been largely fragmented with little or no tech adoption. Startups have figured out a lot can be done in the aggregation business and in delivery. The sub segments that have done well in the space include both eat at home ordering and delivery, restaurant discovery and booking, in restaurant payments, office food delivery and food aggregators.

In a city where we are increasingly busy, availing services may not be easy. Whether one need a doctor, plumber, electrician, drivers, a bunch of startups now help in on the desired service provider. Startups like UrbanClap, Taskbob, LocalOye and Qyk have raised funding. Investors active in this field are SAIF Partners, Accel Partners, Tiger Global and even Snapdeal cofounders. While the primary way to avail local services have been through online search or classified platforms, Local services marketplace make it seamless. This has led to increasing popularity of startups.

Network Role in Internet of Things

Internet of Things (IoT), also called Internet of Everything is a scenario in which people are provided with unique identifiers and the ability to transfer data over a network without requiring human to human or human to computer interaction. Small and Medium Sized Businesses in India today have access to new technologies, new markets, suppliers, and customers and are constantly looking shaping industry conditions.

Increase in competition has driven companies to reach out for IT and the Internet as a basic infrastructural requirement for optimizing efficient operations and businesses. SMBs are looking at Internet of Things to enable new business models which will increase profit margins for companies. After some time, IoT solutions will originate from start-ups that are less than three years old.

There are certain challenges in IoT. Foremost is managing the Network. When network grows in complexity, small business needs to focus on comprehensive network solutions. A dedicated IT staff is required, who is up to date with the complex nuances of IoT ecosystem and can help manage the network. Second challenge is Security. Organizations need to protect their businesses through theft of information, virus break prevention, and application abuse with limited additional cost and manageability issues. Most businesses have Cost Restrictions.

Organizations now required a simplified Infrastructure. Because of tremendous increase in number of devices the infrastructure requirement has evolved drastically and new devices run on different bandwidths. It needs to be redesigned so that cost and complexity can be reduced. There is need for a new security model. Strategic IT investments in the right network infrastructure can help businesses capture the IoT opportunity and continue to drive innovation in India.