Yesterday, a small company called Little Eye Labs, which helps optimise Android apps got acquired by Facebook. Normally, not a lot of press would be extended to such an acquisition, since the company being acquired is rather small; but the media in India exploded with this news.
This acquisition is the quintessential, ‘One small step for man, is a giant leap for mankind’, moment for the Indian startup eco-system.
Typically, investors look to invest in startups because they have the ability to grow faster than established firms, simply because they start from a lower base. So, if you asked anyone; What is the kind of business would an investor seek to invest in? They would say, there should be a strong team, the idea should be great, you should solve a real problem, it should be scalable, there should be barriers to entry, large addressable market, etc.
The fact that most miss out is that an investor seeks to enter a business that he can profitably exit. Exit being the keyword here. For most small software product businesses, scaling the business to its full potential can take a decade or longer. Acquisition is a very attractive exit for investors. Up until this point, Indian startups had not been acquired by US technology firms. This one deal has opened the doors for many such deals to be explored in the future.
What does this mean for Indian startups? Well, the confidence on the part of the investors would be on a whole different level as such deals begin to materialise. Moreover, the exposure that the Indian startup eco-system would begin to get as a result of this is going to propel things forward.
This one step for one Indian Startup is a giant leap for the Indian startup eco-system!
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