If I ask you to name one startup from each of the BRICS countries, chances are you will stutter Alibaba, maybe Vkontakte, and then try Google something (which you won’t find).
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So for you to shine at your next dinner party or just to fill your wealth of knowledge, here’s a guided tour of big startups from Brazil, Russia, India, China, and South Africa.
Brazil’s Hotel Urbano: how to beat Bookings.com in one year only
Let’s start with Brazil, both because it’s the first letter of the BRICS, but also for the coverage they get these days. The World Cup, the Rio Olympics in 2016, general elections in October, a lot of events put the focus on South America’s largest country and economy.
While anyone with a sense of adventure and curiosity wish they went to Brazil, actually few did. With only five million tourists visiting the country every year, Brazil is five times less visited than Mexico (24m visitors).
But it may change, and rapidly. With 50% of the population in the middle-class, world class events and a global brand for fiesta, nature and culture, tourism in Brazil is bound to boom. That’s where Hotel Urbano comes in.
The startup, founded in 2011, now has 500 employees, 15 million users and 450 000 rooms available in 35 000 destinations. More impressively, it took them only a year to beat Booking.com. With US$85 million in funding, they can envision a regional expansion in other Latin America countries.
Russia’s B2B-Center: US$101-million funding for a B2B startup in one country
If you think B2B startups are not sexy, just think twice, as the enterprise market is poised to be the next big thing in technology. Russia’s B2B-Center illustrates this perfectly.
The startup, founded as early as 2002, has bet on the specific context of doing business in Russia. If you (correctly) associated this last sentence with corruption, lack of transparency and bribes, then you understand the value that an open, accessible online marketplace can bring.
In 2012, the Russian government itself sent a clear sign of support of this trend. They passed a law making a huge part of government-owned agencies, ministries and institutions go through this kind of marketplace to buy everything from printers to medical services or waste management systems.
As a result, said B2B-Center CEO Alexey Degtyarev in 2013, companies like “Bashkirenergo saved more than US$26-million, Tyumenenergo US$81-million and Bashneft over US$60-million.”
B2B-Center got more than US$100-million in funding overall. In 2012, they recorded 47 600 deals and US$23-million in revenues. They are now expanding in Turkey, Ukraine and Bielorussia.
India’s BookMyShow, 100 million tickets sold online
In a common trend for emerging countries, India’s startups bet on the growing middle-class, which, from 50 million population in 2007, should reach almost 600m by 2025.
The story of BookMyShow is an interesting one, as it’s definitely not an overnight success. Originally founded with the idea to sell tickets for events back in 2002, it cleverly pivoted as an outsourced call-center and then development company during the post dot-com burst years.
Only in 2007 they return to their original idea thanks a first round of investment. Since then, they have been taking advantage of both the growth of the GDP and the middle-class and the incredible rise in mobile penetration.
With a recent additional US$25-millions in funding, BookmyShow has now a US$166-million valuation, and could aim for an IPO by 2015.
China’s Picooc smart body scale valuated at US$100-million
Did you know that as of 2014, 25% of machine to machine connections happen in China? This means that the country is poised to take a big chunk of whatever profits stem from the internet of things, a field in which so many startups have been entering recently.
You may not know Picooc yet, but this startup has raised US$24-million overall, pushing its valuation around US$100-million. Their main product, a smart body scale named Latin, should sell 100 000 units just this year.
Their main advantage when facing the competition from Withings or Fitbits is both the price (up to three times cheaper) and their knowledge of the local market again.
With investors such as JD.com (second biggest e-commerce player after Alibaba) and Tencent (owner of WeChat, China’s most popular messaging platform), Picooc is sold online in two of the largest e-stores of China.
The scale itself comes with a dedicated companion app which tracks health figures, including body fat, body mass index, body water, and muscle mass.
South Africa’s Remitix: making remittances easier for all stakeholders
Last but not least, we’ll be finishing this tour of top startups in BRICS countries with South Africa.
Remitix is an interesting example as it plays in the hot field of remittance. In Kenya, “only” five per cent of the GDP comes from remittances. But in Bangladesh, the same stats amounts to 12%, and it goes as high as 16% for Honduras and, for the record, 47% in Tajikistan.
If every migrant know about Western Union, they also experience their high prices (6-12% fees depending on the region), long queues to remit on week-end days, and a lot of paperwork to fill. The innovation of Remitix is to offer a safe and fast service to remit, in partnership with banks.
Take the example of a Kenyan student remitting back home. He would be able to send money through an app or online, for a flat fee of £5, plus a one or two percent change rate commission. Back home, his mother, say, receives an SMS telling her she received the remittance. She can go to a bank partnering with Remitix, open a bank account in no time, and convert the voucher she has as an SMS into cash. In the meantime, the bank gets one new client.
If we don’t have any figure of funding or valuation for Remitix, the company already employs more than 200 in South Africa alone, and boasts to send to Zimbabwe three percent of their own GDP.
BRICS Startups: what do they share in common?
With all these stories in mind, we can try to wrap-up and find key takeaways. In countries where the US and European tech companies are barely present (with the notable exception of German based Rocket Internet companies in the field of e-commerce), we note that successful companies:
– know how and when to tap into the growing middle-class new frenzy for consumption. The 2000s proved to be too early times to conquer a too narrow population. Fast forward ten years, and huge populations are technologically ready to pay for goods and services online.
– have an invaluable knowledge of local behaviors and patterns of production and consumption. If Hotel Urbano was able to beat Bookings.com in a year only, that’s because they knew 85% of the local hotels were independently owned. So it was key to have big teams of business development to identify them and make them join the platform.
– are funded locally for a big part of them. The US VCs still seem to favor companies located or relocating in the Silicon Valley. In the meantime, funds from the BRICS countries were able to raise a first series of giants, and for the most interesting trend we can see here, more funds are transiting from the emerging markets to the emerging markets.
All in all, it’s good to see that startups from the BRICS found their own way of development. And, from India to South-East Asia, Africa and even parts of Europe, a lot of countries remain untapped.
The question is: where will you place your bets?
Image by Dave Moyer via Flickr
