40% of India’s start-ups operate in the B2B space, securing more than 30% of overall tech funding in 2017. 43% of new start-ups incorporated in 2018 were focused on B2B. There are currently 3 Indian unicorns operating in the B2B space, with 7 more likely reaching unicorn status soon. Why aren’t Indian start-up founders focusing on the next 500M internet users in the country?

India’s ecosystem has witnessed a shift of focus from B2C and on-demand services to deep and emerging technology such as artificial intelligence and machine learning to solve both, local and global problems.

NASSCOM approximates India to have over 700 advanced tech start-ups, highlighting a shift away from the “lift and shift” start-up culture of a few years ago. This indicates a significant maturing of the Indian start-up ecosystem, driven by more experienced entrepreneurs with access to talent with international operating knowledge returning to India.

Artificial Intelligence, it seems, alone has the power to change the Indian business landscape over the next few years. Accenture estimates that artificial intelligence alone could add $957 billion to the Indian economy, increasing the country’s income by 15% by 2035. Capgemini also estimates that 58% of companies in India are using AI at scale, paving the way for quicker development of related products and services.

There is also a growing number of VCs laying special focus on emerging tech start-ups. B2B start-ups saw a 10% increase in funding during 2017, while B2C start-up funding declined by 5%. YS Research shows that AI start-ups in India received US$ 295M in funding during 2018. Venture capital data firm Tracxn also estimates B2B start-up investments went up by 28% in 2018 YoY.

The emergence of dedicated B2B start-up funds such as pi Ventures and Cornerstone Venture Partners alone suggest a transfer of focus to the B2B space. Interestingly, VCs are also paying attention to tier 2 and tier 3 cities (also read: Drivers of Start-ups in India), where entrepreneurs are quickly catching up to their counterparts in the metros.

Indian tech entrepreneurs also have access to the world’s largest IT talent pool, continuously skilling itself in emerging technology. The presence of development centers from the likes of Microsoft, Uber and Google across India also allows Indian start-ups to compete on a global level right from inception.

In addition, a wave of corporate partnerships programs is bolstering founders in the emerging technology space. There are currently over 200 incubators in India, among which are more than 35 corporate accelerators, all preparing Indian entrepreneurs to compete on the international stage.

When taking a 50,000-foot view on the Indian start-up ecosystem, it’s no surprise that Indian entrepreneurs are redeploying their resources to fixate on emerging technologies. With increasing connectivity, access to talent and availability of capital, the Indian B2B start-up ecosystem is sitting on a golden opportunity to revamp how the enterprise does business. Where it all leads to however, remains to be seen.

You may also want to read: AgriTech in India and FinTech in India.