Outliers #021

In preparation for Seamus Crawford's visit to Bengaluru in India, he visits the 5 Pillars of Growth and considers where opportunity may lie.

A VC's Insight

5 Pillars of Growth

India has featured across a number of our Outliers newsletters over the past 6 months, and for good reason - we truly believe there is a generational opportunity for the region ahead.

However, as an investor that is not currently physically based in India, we are mindful to ensure we are not just another international fund looking to “FOMO” in. Core to our model of ‘network based investing’, we are always looking to cultivate new, and deepen existing, on-the-ground relationships. We are constantly developing our core understanding of the continually evolving local complexities and dynamics - we are always learning.

As part of that learning journey, I am excited to be travelling to Bengaluru, India, in just a few weeks time. With TEN13 having led its first pre-seed investment in the region, I am delighted to be heading to India to catch up with the company’s phenomenal team, as well as connecting with our wider existing network and meeting as many new folks as possible.

In building our deeper understanding of the region, a guiding framework I have found extremely helpful was highlighted in a fantastic report from the folks at Blume Ventures, and on the excellent ‘Return on India’ podcast. In particular it talks about the “5 pillars of growth”.

L to R (clockwise): OurPass (Samuel Eze), Imalipay (Sanmi Akinmusire), VendEase (Tunde Kara), Kippa (Kennedy Ekezie)

Sajith Pai, a GP at Blume, refers to the first key pillar as the “Wang Trifecta” after chatting about the evolution of the Chinese economy with Tony Wang. The trifecta highlights 3 things that were key catalysts for the Chinese economy taking off - cheap bandwidth; a smartphone in every pocket; and a frictionless payment system.

Within the context of India, access to cheap bandwidth has been revolutionised, with the phenomenal story of Jio. During the period of 2014-2021, the Indian consumer went from paying ~$3.50 for 1 GB of data to just ~$0.08 (~INR 6).

We have spoken before about the growth in penetration of smartphones in India, with nearly 500 million smartphone users during 2022.

The third element of the trifecta, but also worthy of recognition as a growth pillar in itself is the advancements in Indian Public Digital Infrastructure. A crown jewel in this Indian infrastructure is UPI (Unified Payments Interface). UPI is a real-time inter-bank payment system in India that enables instant money transfers (like sending a text) between bank accounts. It was launched in 2016 by the National Payments Corporation of India (NPCI) and has become a popular payment method in India due to its simplicity, convenience and security.

Some incredible stats highlight that in late 2022 monthly volume of UPI transactions was ~$134 billion. The majority was accounted for by P2P payments, however ~$30 billion was via C2B payments (e.g. paying for Uber, buying water or chai etc).

Having only launched in late 2016, that $30 billion C2B payment volume via UPI is already more than credit cards and debit cards combined for the whole of India...

In addition to, and further driven by, the Wang Trifecta, GDP per capital across India has grown nearly 6x over the last ~20 years. However, in the wealthier sector of the Indian population per capita income ranges between $10k and even $20k, akin to a number of Western geographies.

As we’ve also highlighted in the past, the Indian talent flywheel is another core pillar. We have seen some strong talent spinning out more seasoned startups such as Flipkart (where one of the Founders we’ve backed spend a part of their career), Udaan, Zenoti, Meesho etc. However, we should note that it is certainly not a pre-requisite to have worked at these types of companies, or have been to an IIT college, to be successful - we have met many exceptionally talented and hungry Founders, without these backgrounds, who are building some very interesting products.

And all of these elements combine alongside the final pillar of e-commerce enablement. Fundamental infrastructure improvements (both physical and digital) have meant delivery of a wide range of products has become relatively frictionless over the last 5-7 years. This has allowed companies like Delhivery to thrive in supporting distribution and facilitating ever increasing consumer demand.

I’m looking forward to exploring this, and other frameworks, in more depth in Bangalore and am excited to connect with the wider Indian Startup Ecosystem.


While the data is just over a year old, the trends would still hold. I have two takeaways from this graph. Firstly, at the top end we can find the most innovative places in the world; Singapore, Israel and Estonia are places we’ve often written about in Outliers. Small populations with an outsized impact on innovation.

At the bottom, I also see opportunity. Populations of billions collectively, with ever-increasing financial inclusion, digital connectedness and spending power who just aren’t receiving the attention they deserve.

Macro lens

A green beacon to finish a quieter year in markets in 2022. Australian VC funding rebounded massively in Q4, bucking the US trend. While deal count was in line with the historic trend, deal value was in line with 2021 levels. After a great start to the year in public markets, let's see how that flows through to private capital.

Your authors this week

Seamus Crawford - A lengthy career on both sides of the table, working in early stage startups in the UK and investments in Hong Kong. Seamus has a particular interest in India and the wave of sub-continental innovation.

Alex Barrat - Fascinated by all things development and demographics. Open to any and all pitches, just reply to this email with your deck.