Five Tech Giants Betting Big on India: Amazon, Facebook & Others

India, whose economy has been boosted by lower energy prices in recent years, has overtaken China as the fastest-growing large economy in the world. The World Bank anticipates the Indian economy to grow 7.8% in 2016 and 7.9% in the subsequent two years, predicting that India will continue to remain the fastest-growing economy in the world in the next three years. India, the second most populous country in the world, has been a bright spot of the global economy in recent years; thus, becoming the hottest growth opportunity for American technology companies. Frustrated by the tiring demands from the Chinese government, most U.S. tech giants have turned their focus on the appealing Indian market. Therefore, the following article will discuss major moves implemented by five top U.S. tech companies to increase exposure to the fast-growing Indian economy.

Before proceeding to the discussion of those expansion moves, Insider Monkey would like to recommend Indian citizens or other international investors interested in financial markets attend the inaugural Sohn India Investment Conference that takes place in Mumbai on June 3, 2016 (register here). Not only does the conference provide a platform for attendees to receive fresh market insights and investment ideas from top investors from India and around the world, but it also raises critical funds to support cutting-edge pediatric cancer care in India.

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India among Fastest Growing Markets for E-Commerce Giant Amazon

Let’s begin our discussion with Amazon.com Inc. (NASDAQ:AMZN)’s expansionary initiatives in India, which was reportedly the fastest growing market for the e-commerce giant last year. In December 2015, e-commerce company Amazon announced that it had led a $23 million investment round in India-based home services on-demand company, called Housejoy. The U.S. tech giant was joined in the Series A investment round by existing investor Matrix Partners India, as well as new investors such as Qualcomm, Vertex Ventures and Ru-Net technology Partners. In addition to on-demand house cleaning services, Housejoy also provides in-house computer repairs, beauty treatments, bridal services, as well as maintenance and home repairs. According to trustworthy news outlets, Amazon India continues to grow at a high pace despite facing strong competition from domestic giants Flipkart and Snapdeal, as the online retailer’s shipments increased a massive 150% year-on-year in the first calendar quarter. In July 2014, Amazon.com Inc. (NASDAQ:AMZN)’s CEO, Jeff Bezos, said that “We see huge potential in the Indian economy and for the growth of e-commerce in India”, after announcing a $2 billion investment in its India operations. Fresh reports suggest that an approximate number of 130 million Indians will shop online by 2020, with retail e-commerce sales in India anticipated to reach $55.3 billion in 2018 versus $14.0 billion in 2015. Alex Snow’s Lansdowne Partners upped its stake in Amazon.com Inc. (NASDAQ:AMZN) by 19% during the March quarter to 2.20 million shares.

The next two pages of this article will discuss several India-focused moves implemented by four other U.S. tech giants.

Facebook’s FbStart Supports Indian Mobile Developers

In May 2014, Facebook Inc. (NASDAQ:FB) launched FbStart, a program that offers mobile developers across the world free tools and services to assist their startups succeed. An article posted by Business Insider in August 2015 discussed the success of the program with Facebook’s Head of Commerce and Platform, Deb Liu. The article reveals that $20 million of the $50 million in benefits channeled into Asia Pacific startups funded mobile apps in India. Back in August 2015, when at least 70% of developers integrating apps with Facebook came from outside the United States, India was the largest Facebook international developer community in the entire world. Even though only a small portion of India’s population is online, the world’s second-most populous country has the third-largest number of internet users in the world. Meanwhile, the social networking giant recorded 125 million users in India in mid-2015, representing Facebook Inc. (NASDAQ:FB)’s second-biggest market globally. Adage Capital Management, founded by Phillip Gross and Robert Atchinson, owns 3.55 million shares of Facebook Inc. (NASDAQ:FB) as of March 31.

Microsoft’s Accelerator Program in India Bears Fruit

Earlier this month, Bangalore-based HealthifyMe, a mobile health and fitness startup that graduated from Microsoft Corporation (NASDAQ:MSFT)’s Microsoft Ventures accelerator program, announced that it had raised $6 million from IDG Ventures India, Inventus Capital and Blume Ventures. HealthifyMe, which launched as a calorie counter app in 2013, was founded by Tushar Vashisht, Sachin Shenoy, Mathew Cherian and came back to Microsoft Ventures India a few years ago to assist other startups achieve success. Microsoft Corporation (NASDAQ:MSFT)’s Accelerator Program in India has been assisting startups in fields such as live music, gaming, data security and healthcare develop and grow. While it is not entirely clear how much the tech giant benefits financially from supporting these startups at this point in time, Microsoft Ventures definitely plays a role in the future economic and entrepreneurial development of India. Through its mentor-driven accelerator program, Microsoft assists entrepreneurs in building a sustainable business, gaining customers and scaling to global markets. First Eagle Investment Management, overseen by Mehdi Mahmud, is the owner of 23.62 million shares of Microsoft Corporation (NASDAQ:MSFT) as of the end of March.

Alphabet’s Accelerator Programme Set to Mentor and Fund Six Indian Startups

Similar to Microsoft’s accelerator program, Alphabet Inc. (NASDAQ:GOOGL) is also helping Indian startups through mentorship and equity-free funding. Just recently, the search engine giant announced that six Indian startups were shortlisted for the Google Launchpad Accelerator Programme at the company’s headquarters in Silicon Valley, California. The six-month long mentorship program includes $50,000 in equity-free funding and will commence in mid-June. The aforementioned six Indian startups include: Taskbob, which offers a range of home services; Programming Hub, which offers an app to learn up to 15 programming languages like Python, HTML, and C, among others; ShareChat, which provides a social networking chat platform in Indian languages that enables video, image, and song sharing; RedCarpet, which provides instant credit for online purchases that is paid in installments later on; PlaySimple Games, which enables users build simple social games; as well as Magic Pin, which allows users to find local merchants and transact with them. Dan Loeb’s Third Point LLC acquired a new stake of 700,000 Class A shares of Alphabet Inc. (NASDAQ:GOOGL) during the March quarter.

Apple Increases Focus on India as Global iPhone Sales Slump

As global sales of iPhones have been sliding in recent months, Apple Inc. (NASDAQ:AAPL) is seeking to concentrate on the world’s second-largest smartphone market, India. According to market intelligence firm Counterpoint Research, the iPhone market holds a minuscule market share in India, with the country accounting for a mere 1% of global iPhone sales in terms of both volume and revenues. Earlier this month, the Cupertino-based company hosted approximately 40 Indian entrepreneurs at its headquarters, where they discussed mobile app development. It is believed that Apple Inc. (NASDAQ:AAPL) may soon form a local team in India to engage with local developers in developing India-focused apps for the company’s operating system. While most Indians may opt for cheaper versions of smartphones at the expense of Apple’s relatively high-priced iPhones, an increased number of Indian-focused apps may lure more users to buy iPhones. Just recently, Apple also invested $1 billion in China’s largest cab-hailing service called Didi Chuxin, which represents a strategic investor of India’s largest ride-hailing network called Ola. Warren Buffett’s Berkshire Hathaway acquired a new stake of 9.81 million shares of Apple Inc. (NASDAQ:AAPL) during the first quarter of 2016.

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