Cited as one of top 10 emerging technologies by MIT Technology Review, crowdfunding has lived up to its expectations in 2012 – right from discovering the myriad possibilities it offers beyond just creative projects (e.g. for market research, as a precursor for VC funding, and how it can even save white Rhinos from extinction) to the actual realization of many success stories.
Infact there’s been a tremendous push across the West for its implementation – motivating its leaders to ease laws to crowdfund small businesses (equity crowdfunding) and Gold Rush‘s predicted for 2013. With crowdfunding on turbo in the West, lets look at its progress in the East and the emerging world. Crowd Navigator over the next few Months will look at the crowdfunding scenario in SE Asia, India and China. This post’s on India.
India has seen a massive crowdfunding success story many years before the actual the term was coined. Without getting into ancient India, an example from the more recent past would be the ‘rags-to-riches’ story of the Reliance Industries founder Dhirubhai Ambani. His then small yet growing textile business was crowdfunded by communities across the Indian state of Gujarat. In 30 years Reliance Industries had become 60 billion dollar business and is still growing strong. Here’s a scene from Dhirubhai Ambani’s unofficial biopic ‘Guru’-
While the above idea was sold on a physical platform (see speech to investors from the same film) and not through today’s internet-based crowdfunding platform, nevertheless there have many similarities between the approach then and some of today’s relatively smaller success stories on crowdfunding – selling an dream, gaining people’s trust and building a compelling case for its funding.
Today’s India with its huge market and human capital has moved on from the license raj regimes of the past (still more’s needed), becoming a popular destination for global business and other investments that have identified opportunities. Its crowdfunding forays however has been restricted to micro-financing category projects, and the occasional donation-reward funding category.
There haven’t been success stories of Indian entrepreneurial projects through crowdfunding yet, but looking at the global trend of easing funding laws there are reasons to remain positive. Plus India has on its side the human capital, many of them capable of small investments, and several business opportunities.
A handful of crowdfunding platforms have indeed cropped up – Pik A Venture, Funduzz, YoLaunch, Pitchhike, Fundmypitch and Wishberry.in – however most of them are still under beta. Considering the volatility of the crowdfunding platform space, as well as the reach and flexibility of global platforms, there’s going to be some competition in this space. Moreover in today’s open-source world, individuals or companies can easily self-start their own platform and or seek infrastructural assistance from experts.
The bottom-line though is, crowdfunding in India is here to stay. Get in touch if you need more information.