Ruchira Shukla has over 25 years of experience in venture capital and private equity investing, strategy consulting, and investment banking across Asia, the U.S. and Europe. Her sector focus has spanned climate tech, health tech, enterprise SaaS, consumer Internet, edtech and e-logistics, with a keen interest in STEM-led and IP-led business models.
She is currently the co-founder and managing partner of Synapses, a New Delhi-based VC Fund focused on STEM-led investments in climate tech and health tech. Shukla previously was the South Asia regional lead for disruptive technology investments at the International Finance Corporation (IFC), World Bank Group. She led IFC’s investments in early-stage technology businesses as well as VC Funds and represented IFC on the boards of several startups and LP advisory committees. As the Global Lead for the health tech business at IFC, she led IFC’s search for global health tech innovations with a focus on women’s health. Shukla also ran IFC’s South Asia business in technology, media and telecom, as well as InfraVentures, a business focused on early-stage infrastructure investments. Earlier in her career she worked for Boston Consulting Group and Lehman Brothers.
Shukla studied at IIT Delhi and IIM Ahmedabad in India and graduated as a Palmer Scholar from The Wharton School, University of Pennsylvania. She recently spoke to The Innovator about innovation in India.
Q: As a longtime industry observer and investor how is innovation in India evolving?
RS: I have been actively involved in the Indian innovation ecosystem for 14 years. Before that I had the benefit of living and working in the U.S. and Europe. The India innovation ecosystem has come a long way. As is well acknowledged, India has always been a leader in technology. Global service providers, including Infosys, WIPRO and TCS, started from India and built leading global software businesses, tapping into India’s technology talent over several decades. However, the pace of innovation and disruption we are seeing now is an even more powerful phenomenon with the ability to push India’s technology leadership to a new level. This is driven by certain fundamental shifts in the country in the last decade. I call them the five Cs:
Connectivity: This goes beyond people being connected to the Internet with digital tools being fully integrated in every aspect of the economy; today Indians engage more deeply on digital platforms across various facets of their lives and across all socio-economic groups. A connected Indian is not just an information consumer; she or he engages actively in the digital economy due to the proliferation of micro exchanges, in both content and transactions. These shifts have become part of people’s day-to-day lifestyle, not just in urban areas but in rural India as well. And the shift is at scale. Some 40% of global real-time transactions now take place in India. This is thanks to the India Stack, now called the Citizen Stack, a set of open APIs and digital public goods created by the government that has unlocked identity, data, and payments at population scale in India, helping promote financial and social inclusion. The Unified Payment Interface enables all kind of B2B payments and peer to peer micro payments, allowing the entire Indian population to be active participants. Indians living increasingly digital lives are engaging and contributing to the digital economy as well as India’s participation on the global stage. The impact of this participation is being felt domestically as well as globally with the emergence of large and growing digital businesses from India that are spreading across countries and regions.
Capability: All sides of the innovation ecosystem have built enormous muscle power over the past decade. Just in the past ten years, India has produced tens of thousands of digital entrepreneurs, and they have become mentors to new ones, creating a positive cycle that has helped the ecosystem become stronger. The global venture community has also evolved, and there is a deeper understanding and ability to navigate the complexities of a market like India. Tech talent is another factor. The early tech boom has become increasingly more inclusive. It is not just mainstream urban areas that are demonstrating strong engineering talent. Connectivity is enabling more people to participate, learn, and grow. International companies have been setting up Global Capability Centers (GCCs) in India for the past three decades and there are about 1,600 of them today. Initially these centers were providing back-office support to headquarters but now they are doing more critical research, solving cutting edge issues, and are becoming the R&D engines of these multinationals. All of these developments have helped India’s technology ecosystem score high on capability.
Credibility: Global multinationals relying on India to serve important research needs and driving critical development from India, has bolstered India’s credibility in the fields of cutting-edge scientific research, advanced analytics, engineering and system design. This is reinforced by SaaS companies from India winning customers in global markets, such as Freshworks, which is listed on the NASDAQ. Increasingly low-cost manufacturing has been set up in India and serving global markets. The US News and World Report (2022) ranked India as the nation with the cheapest manufacturing cost, ahead of China and Vietnam. This is why companies like Cisco and Amazon are setting up their manufacturing in India. Taken together, India has become a credible and valued leader on research, software and manufacturing.
Confidence: The combination of connectivity, capability and credibility gives India’s innovators the confidence to blossom. Young founders are taking on large, global problems and building solutions and companies that are well placed to become leaders in their sectors. New solutions for new markets are being envisioned and created. India has become the third largest entrepreneurship ecosystem behind the U.S. and China and there is a high level of optimism in the economy on the ease of doing business and potential for success according to the Global Entrepreneurship Monitor.
Circumstances: Geopolitical circumstances are also playing in India’s favor. Every country and every industry is keen to diversify supply chains. The world is recognizing and looking to diversify away from China’s dominance in the supply of a wide array of products. The confluence of this with the ‘Make in India’ program by the government of India to transform the country into a global design and manufacturing hub, coupled with capital support from the private sector, are creating a perfect enabling environment.
These developments are spurring rapid entrepreneurial growth across the country, and not just in selected large cities. India has over 1,12,718 startups across 763 districts of the country as of October 2023, according to Invest India. India now has 111 unicorns with a total valuation of $349.67 billion, and many more with the potential to reach that growth stage.The World Economic Forum’s 2024 Technology Pioneers include 10 companies from India.
Q: India has made headlines recently for its advances in space. What are some of the other areas that are seeing major technological advances that could be exported abroad?
RS: India is an important stakeholder in the climate dialogue. Even though India ranks third in the list of countries with the highest GHG [greenhouse gas] emissions, its energy consumption per capita is less than a tenth of that of the U.S. and is expected to double in the next six years. India is an aspirational economy and growing rapidly, resulting in surging demand for more air conditioning, more cars, more data centers, and energy-guzzling lifestyle goods driving an unprecedented increase in energy consumption. And given India’s massive scale, the impact of India’s growth on the global energy equation cannot be ignored. India’s needs to get to Net Zero in order for the world to get to Net Zero. India is rapidly innovating for its own journey to Net Zero and these innovations will be relevant for the world. We are already starting to see some of those solutions emerge. Promethean Energy, a company working on waste heat recovery in manufacturing plants is helping India’s massive industries reduce their carbon footprint. Its product is seeing demand from countries in Southeast Asia as well as the U.S. Similarly, another company called Machphy is using phase change materials to enable cold supply chains while reducing the need for refrigeration. Thermistance, a deep science innovator is commercializing miniature closed loop heat pipe technology, a passive cooling solution that can be used in various industries globally including electronics, electric mobility and data centers.
Q: Are there other areas where you see India making its mark?
RS: There is a big shift in the market where the goal to reduce GHG emissions is pushing us towards large scale electrification across sectors. This will drive the need for reliable, low cost and safe energy storage and we expect to see a big surge in battery innovation from India with a laser focus on cost. Batteries for long or short-duration energy storage and load re-balancing with data from smart meters that make electricity consumption smarter are some of the emerging areas. At the same time there is the growth of the sharing economy where the assets being shared are increasingly decentralized and these distributed assets need to be tracked, traced and monitored. The greening of manufacturing requires alternative raw materials, large scale renewable energy access and upgrades to age-old industrial equipment. Smart agriculture methodologies based on data to enable better use of resources and management of shifting weather patterns, are also needed. As populations grow and climate adversities threaten food security, we need to build new technologies to create robust food supply chains. Managing healthcare is another area with high potential impact. People are living longer lives but aging populations with escalating disease burdens are stretching our already stressed healthcare systems. We need portable, low-cost medical devices that make quality health care accessible at the right price points and advances in genomics that will lead to personalized care pathways. Indian companies are working on solutions in all of these areas and are well positioned to achieve global leadership in these spaces.
Q: Can you give some specific examples?
RS: MedGenome is a genomics research and diagnostics company with a mission to improve global health by decoding the genetic information contained in an individual’s genome. Its unique access to Indian genomics data alongside clinical and phenotypic details provides insights into complex diseases to facilitate research leading to personalized healthcare. It is building Southeast Asia’s largest genetic database and filling a big gap in the market. Today, over 88% of genetic data is Caucasian. Drugs developed through genetic research based on largely Caucasian data do not work on Asian and African populations in almost 30-40% cases. We urgently need genetics data from Asia and Africa in these databases, especially for complex diseases like cancer. To deliver effective medical care for diverse populations, we need more inclusive approaches that deliver better answers.
Voltrez Tech, another company based out of Mumbai, has developed a unique anode plating that prevents battery fires, solving for the urgent need for battery safety and has the potential to address this large and growing market across the globe.
Pratyaksha Agro is leading the charge on improving biodiversity and food security through its innovative tissue culture technology that enables the propagation of local food varieties as well as locally produced planting materials for phytopharmaceuticals. Besides reducing dependence on food imports, their unique business model preserves local heirloom crops and supports farmer livelihoods.
Also, supporting climate mitigation and adaptation in the agriculture sector, Takachar, views itself not just as a carbon removal company, but as a carbon justice company. The company’s unique portable reactor converts biomass to biochar and comes equipped with a smart control system to measure the associated carbon credits. The heat generated during the reaction can also be repurposed for applications such as cold storages and grain dehydrators. The company recently won the Earthshot Prize and is competing for the global XPRIZE for Carbon Removal.
As these examples illustrate, India’s innovations are solving problems that are shared across countries in the Global South and the Global North. Moreover, these solutions are built at cost structures that work well across most developed and several developing countries, and hence stand to win across markets.
Q: What is the best way for multinationals to engage with innovation in India?
RS: Multinationals can play an important role in furthering India’s innovation engine. A few key ways of providing this support are:
- Become early adopters of these technologies: Almost all of these startups want to sell to corporates but have no way of reaching them. Corporates could reach these innovators through funds like ours to get an early look and assess these technologies while they are still in the development stages. This gives large companies a way to pilot these solutions in their own operations and build early feedback loops, becoming a direct participant in the development process. One example of this is SBES Technologies, an Indian company that has created a fuel-flexible burner that can combine hydrogen and LPG [liquefied petroleum gas], and also use various combinations of other fuels for industrial heating. This is an important area as industrial plants need to upgrade their equipment to accept greener fuels. Having tested its products in partnership with industry participants in India, the company is receiving inbound interest from global customers even as it goes through early product iterations.
- Give young companies capital support to scale and acquire new customers. It is important that large companies invest and support startups, but not acquire them too soon. Startups need an agile environment to continue the experimentation that is critical for their growth.
- Undertake joint research partnerships: Plug startups into your internal R &D initiatives. Partnering with research teams of established businesses can be a shot in arm for younger startups and serve as an opportunity for both sides to benefit from a cross pollination of ideas.
- Share Problem Statements and Conduct Challenges: Leverage industry associations to work with startups and throw challenges at them. Startups love to work with their future customers and such hackathons can accelerate the innovation cycle. The Indian Electrical and Electronics Manufactures’ Association (IEEMA) has launched several such initiatives.
- Invest in India-based venture capital funds to get an early look at the nature and direction of innovation. The upside from such investment can help strengthen the case within the organization for deeper involvement and immersion in the startup ecosystem.
With any of the above levers corporates can play a pivotal role in driving innovations forward while benefiting from the revolutionary solutions these startups are building. Indians like to say in Hindi “apna time aayega” which translates to “our time will come”. Our time has indeed come; it is here now, and India is ready to seize the moment.
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