The languages spoken in India change every few kilometres, as does the taste of the water – popular Hindi saying.
With the surge of smartphones and internet penetration across India, startups targeting the next 100 million internet users by building products for them to communicate and be informed and entertained in their own languages are drawing the attention of marque investors.
To begin with, these startups are mostly creating products focused on content as founders believe that what brought people to the English-dominant internet—entertainment, information and social networking—will work in the vernacular as well. Monetisation is a focus area for later, once customer reach is solved.
The first wave of Indian language content startups with entertainment as the theme has already garnered a lot of attention from investors in India as well as China.
ShareChat, a mobile app for users to share jokes, videos, wallpapers and photos in their own languages, has raised about $124 million in venture funding from investors including SAIF Partners, Lightspeed Venture Partners, India Quotient, China-based Shunwei Capital and Chinese smartphone maker Xiaomi.
Roposo, a social media photo and video sharing app, has raised about $26 million from New York-based Tiger Global Management, Bertelsmann India Investments, and others.
Shunwei has been a prolific investor in Indian language-focused startups. It has invested also in voice-based knowledge-sharing platform Vokal (other investors include Blume Ventures, Kalaari Capital and Accel India); storytelling platform Pratilipi (Omidyar Network, Nexus Venture Partners, Times Internet*); and mobile-based social platform Clip app (India Quotient, Matrix Partners India).
Venture capital investors say there is place for over a dozen startups in this space.
“While language is one complexity, there are also cultural and taste-related complexities. Then, there are issues around how familiar users are with social media and what kind of features to offer them,” said Anand Lunia, general partner at India Quotient, an early investor in multiple companies in the space including ShareChat, Lokal and Clip. “Now what has happened is that these multiple buckets are becoming big enough and that produces chances for new platforms.”
Over the past few months, several ideation-stage startups focused on news and debate in local languages have raised cheques of $4,00,000 to $1 million from investors — including Circle.news from SAIF Partners, Awaaz from Matrix and Lokal from India Quotient, according to multiple people familiar with these deals. In September, telecom operator Bharti Airtel invested in news video app Editorji Technologies, founded by former NDTV chief executive Vikram Chandra.
“In this space, I think investors are purely looking for fast growth since it means you have found some product market fit,” said Aprameya Radhakrishna, founder of Vokal. “Vernacular means numbers. English-speaking internet audience is 50-100 million in India. To get to 500 million users in India, you have to be in vernacular.”
Harsha Kumar, partner at Lightspeed added: “At an early stage in most content plays, I look for organic growth and high engagement. Retention and scale typically follow. In addition, I would look for a team that demonstrates deep understanding of its very diverse user base and rapid experimentation, since this is a relatively new category.”
With an overall online population of 500 million in 2017, India has one of the fastest-growing internet populations in the world. Google and KPMG projected in a study last year that nine out of 10 new internet users in India between 2016 and 2021 would use local languages.
“Distribution of localised content in rural areas is now possible via online channels due to cheaper smartphones and low data costs,” said Revant Bhate, partner at Kstart, the seed fund of Kalaari Capital. “I believe startups that build credibility with the next billion user base by making hyper-local content experiences can scale efficiently.”
Startup entrepreneurs say that in India’s small towns and cities, consumers mostly seek news and content relevant to their region. Presently, this gap is being fulfilled primarily by platforms such as YouTube, Facebook and WhatsApp. These consumers, though, have shown intent to use other products more suited to their needs.
To bridge this gap, startups such as Manch are building community-driven vernacular platforms that allow users to discuss and react to news and events, as well as to search for, follow or create content mapped to locations or interests.
“Unlike English-speaking users, the next 100-million internet users communicate in multiple regional languages; their festivals, interests, preferred mediums of communication are very different,” said Pritam Roy, founder of Manch. “Their journey to express themselves would be facilitated by a new set of internet products that reimagine the medium of expression for them.”
With regional language news, the underlying thesis remains engaging users with topical or local information.
While some startups are hiring stringers to generate local news and some are aggregating local news, several are focused on developing discussion forums across video, text and audio formats in vernacular languages.
“There is a need to know about local affairs — whether it be about politics/politicians, regional festivals or local incidents/accidents,” said the founder of a local news startup, declining to be identified.
“This consumption till date has largely been offline with newspapers, radio and TV being the primary modes of distribution, which is not a barrier anymore thanks to the internet,” he added.
Kumar of Lightspeed, expects the sundry efforts to “converge on a hybrid model that involves aggregation, user-generated content as well as proprietary content. In the end, exclusivity, speed and the entertainment quotient will likely matter most,” he said.
Solving for monetisation and distribution of vernacular content, however, still needs to be proven.
“One big difference between China and India is that India is not one large market, it is 10-12 different markets and there isn’t a large overlap between these markets,” said Karan Mohla, executive director at Chiratae Ventures. “Also, how these communities and groups interact is very different.”
There are also questions around whether there exists a big ad model for this largely lowerincome consumer group, and on the distribution strategies. “Today, WhatsApp is the only thing that unites us. There needs to be a more innovative approach such as tie-ups with phone makers and for offline distribution,” said Mohla, who has invested in YourQuote.
Sajith Pai, director at Blume Venture, however, said the vernacular content space is at an early stage of evolution and investors need to realise that use cases for monetisation cannot be set in stone and new use cases would evolve, including branded content, subscription model, micro-transactions. “If there is an unmet meet… business models will be figured out.”
*Disclosure: Times Internet owns ETtech
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