What are China’s weak points?

What is common to PayTM, Ola, BigBasket, Swiggy and OYO? Yes, they are all made in India startup success stories. Some of them have achieved global success too. Did you know Ola taxi service was launched in London in February? And OYO rooms are available in almost a dozen countries other than India? However, the other common factor to all of them is that they are substantially funded by Chinese investors. As reported by digital publication, The Ken, all the top ten startups of India, ranked by venture funding raised, have Chinese investment. Apart from the five mentioned above, these include the app-based self-learning platform Byju’s and a very successful logistics company called Delhivery. A startup needs angel funding in the very beginning, and venture funding soon thereafter. Indian banks cannot help. Once the startup becomes successful, its value increases. If its value exceeds billion dollars (which is roughly Rs 7,500 crore today), then it is called a unicorn. The Gateway House, a think tank, reports that 18 out of 30 unicorns in India have Chinese investors. These investors are crucial to the startup community, because in their earlier years these companies have been incurring losses, and these have to be funded by some rich uncle, at least to pay salaries. Since there are not enough Indians willing to patiently fund losses for the first few years of startups, the Chinese have happily stepped in. In the process, Indian companies have achieved scale, and some can become world beaters. The Chinese investors will make handsome money, but that is because they took risk and were patient for all these years. Besides, eight out of 10 startups fail. So the investor makes up by hitting a jackpot on the ninth or the tenth that does not fail.

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