Research Article

Foreign startups expand India operations to tap into niche tech talent

Photo Credit: Pixabay

Photo Credit: Pixabay

Many global startups have begun entering India primarily to tap into the readily-available technology talent pool, especially in niche digital areas like analytics and data science.  

Take the case of Fluxon Apps Plc, a San Francisco-based tech startup operating since 2017, which expanded its operations to India in 2019 and plans to hire about 1,000 people in the next 2-3 years. They plan to expand their existing office in Hyderabad as well as set up a new hub in Bengaluru by end of 2022. 

Erad Fridman, CEO, Fluxon, asserted that India is an "exciting market for Fluxon where we can discover the best talent and create impactful business opportunities to work on. We have already started working on exciting projects with India-based companies and we will be opening two new offices next year.”

Likewise, Mitsogo Inc., a software-as-as-service (SaaS)-based enterprise security startup, also based in San Francisco, recently launched a new office in Chennai to tap into the talent pool. It plans to hire 300 technology professionals in Chennai in the next few months which will be in addition to the 250 employees in Kochi. Mitsogo also has offices in Australia and Germany.

Indonesia-based ride hailing startup Go-Jek, on the other hand, is an example of a foreign startup that has set up an R&D centre in India only for talent as it does not have any direct operations in the country. Till date, Go-Jek has aqui-hired three companies in India to build its talent pool – Bengaluru-based software company C42 Engineering, Delhi-based development and operations company CodeIgnition, and Bengaluru-based AirCTO, an AI-based recruitment platform.

Bridgeweave, an AI-based fintech based in London, has 80% of its staff in India. It has recently launched a new product in India and plans to double its headcount by the end of this year in various technology roles including digital and data science.

“Product innovation is at the core of what we do, and India is critical to us for two reasons. Our products are designed for digital investors and India is a unique market of substantial scale that is young, digital and very investment friendly,” said Akshaya Bhargava, founder and executive chairman, Bridgeweave. He added, "So, we see India as an unparalleled business opportunity. Secondly, India is a source of talent for us."

US-based iMerit Technology, a data solutions company, plans to expand in tier-2 and tier-3 cities in India. It recently set up a new centre of excellence for AI training data in Hubballi, Karnataka. iMerit has 90% of its employees in India out of its total headcount of over 5,500.

“We have seen that the skills required across our teams working on cutting-edge solutions for AI can be found across India, but hiring tends to be saturated in limited urban pockets. There is a need for recruitment and skill development across the landscape. Our vision is identification of talent in tier-2 and tier-3 cities, followed by a robust skilling process,” said Anirban Roychowdhury, vice president of human resources at iMerit.

According to Jayanth Kolla, founder and partner of consulting firm Convergence Catalyst, tech talent crunch is a global phenomenon "and the pandemic has led a lot of the tech talent to move away from the Silicon Valley and Bay Area…meanwhile, the Indian tech talent has also moved up the value chain which makes them sought after”. 

Hiring experts believe more global startups are likely to set up offices in India. 

“Global companies have been setting up businesses in India due to a vast multitude of benefits extended from the Indian government and the presence of skilled young workforce. Many large companies in these sectors have expressed their intention to hire around 20,000-25,000 employees by end of 2022 in order to leverage high quality talent at efficient costs,” said Sanjay Shetty, director, PSS and Key Clients, Randstad India.

“Moreover, the startup ecosystem in India has been evolving at a fast rate attracting talented professionals who look forward to working in these companies due to better incentives, growth opportunities and flexibility to take on diverse job roles,” added Shetty.