SEEK’s $12.5 million stake in Babajob is just the first in what will be a number of cross-regional investments

- April 30, 2015 3 MIN READ

India is attractive right now for investors. In the last 12 months, investment into India’s tech scene has increased threefold – it has become the world’s third largest startup ecosystem just behind the United States and United Kingdom, according to the 2014 National Association of Software and Services Companies (Nasscom) report. The same report also suggests that the number of startups in India will rise from around 3,100 currently to over 11,000 by 2020.

There are a number of key drivers behind the incredible growth of India’s startup industry that have been working away in the background over a number of years. There has been a rapid growth in the country’s GDP. The number of personal tech devices that has been adopted per capita is one of the largest in the world, particularly with smartphones. And India has over half a billion citizens that are under the age of 25, more than any other country, including its Chinese neighbours in the Asia-Pacific region.

In recent months, some of Australia’s most notable companies and investors have started making there way into India through some very strategic investments and acquisitions. In December, Rupert Murdoch’s Newscorp acquired Indian startup BigDecisions and its parent company FinDirect Services – the products neatly fit into Newscorp’s growing portfolio of startups in the information and comparator markets and perfectly complements other investments in India including PropTiger, a real estate platform Newscorp bought 25% of prior to BigDecisions in November last year.

US based tech companies have been getting in on the action in India for a little longer than Australia; and over the last year companies like Yahoo! (which acquired Indian startup BookPad) and Facebook (which acquired Indian startup Little Eye Labs) have been looking at opportunities to expand their reach in the region.

Yesterday’s announcement that SEEK Limited injected $12.5 million into Indian startup Babajob, founded by expat (from Seattle) entrepreneur Sean Blagsvedt (who was the co-founder of Microsoft Research India) does not come as a surprise, especially when you look at the numbers. The platform currently has 2.5 million listings and over 3 million users searching for jobs each month. For SEEK Limited, which has traditionally operated in relatively first-world markets, this investment into what is known in India as the “grey collar job market” is a chance for the company to get in early on what will fast become a platform that plays at all three points of the spectrum (blue, grey and white collar jobs). The number of white collar jobs is set to increase rapidly especially as the half billion citizens under 25 begin to move on from study and into the workforce.

On the investment Blagsvedt told Indian tech publication Your Story that he is happy the investment came from such as strong partner already playing in the space.

“We are excited to find a strong partner in SEEK, who shares our vision of using technology to connect everyone on the planet to better jobs, especially those in emerging markets. We are [honoured] to be their first investment in India and look forward to bringing access to better jobs to every Indian and to helping every employer reliably hire aspiring workers.”

Over the next 10 years, we are likely to see two things starting to happening regionally between India and Australia. The first is more investment like this from some of Australia’s largest and most established tech companies, as well as some of the ones that may be medium in size now but growing fast. The second is, like many Australians are doing in China and Singapore now, is a relocation of some startups or at the very least a strong presence within the Indian market in order to leverage their growth potential.

Given India is the one location on earth where we can actually gain an in-depth insight as to what a population looks like where majority of its internet usage is driven by mobile devices, it will be interesting to see how that plays a role in shaping what (primarily desktop based) industries like recruitment, education, medical and business services to name a few could end up looking like in the future.

Featured image: Babajob founder, Sean Blagsvedt