BCG: Next Generation Tech Innovators in Emerging Markets
Digital technology discussions and debates tend to focus on the west coast of the US and the east coast of China – the so-called “gold coasts”. But according to Boston Consulting Group (BCG), the global tech industry is more diverse and dynamic, with exciting digital disruption and innovation coming from emerging markets.
According to BCG’s analysis, tech companies from Africa, Asia, Israel, Latin America, Russia, Turkey, and the UAE may not yet achieved the global scale of the likes of Apple or Alibaba, but they are bringing products and services to market – often in new ways, and growing fast in both size and number.
These innovators are reinventing their industries and gaining the attention of existing major players as a result.
In this latest edition in the global challengers series, BCG examines 100 emerging-market tech challengers – their innovative, rapid growth, and expanding global positions.
Geographic Diversity and Leadership
China has dominated the emerging-market tech scene in recent years, but other markets are growing in sophistication. Entrepreneurs are improving their access to technology, ideas, and capital. A next generation of younger, smaller, and much more diverse tech companies is emerging.
Of the more than 10,000 tech companies that have been founded in emerging markets since 2014, almost half are located outside China. Among emerging-market tech unicorns (companies valued at US$1 billion or more), a third are not from China.
The 100 global tech challengers on BCG’s 2020 list are truly global, representing 14 countries from all major regions. They are active in multiple sectors, spanning B2C and B2B. While two-thirds focus on consumer apps or services, the rest are active in B2B – transforming how other companies work. More than half have expanded beyond their domestic market, and 40 percent are active in developed markets.
These tech challengers average US$2bn in revenues, yet are still experiencing annual growth of almost 70 percent.
Innovation Reigns For Tech Challengers
These companies are innovative. Some develop products and services designed to solve problems in emerging markets. Others go beyond new products and services to innovate transformative business models in their industries.
Many tech challengers are addressing such challenges as socioeconomic problems related to lack of infrastructure, limited financial inclusion, and inadequate health services. Innovation often sees them reshape markets, address inefficiencies, and establish new industries. Increasingly, tech challengers are challenging multinational competitors from developed markets and gaining recognition on the global stage.
Challengers Reshaping Tech Sector
Tech challengers are reshaping the sector, as well as other industries where they see opportunities, and many are keen to expand beyond their initial market or sector.
They face incumbents on three main battlegrounds. The first is existing revenues and profit pools in local markets, which challengers attack through technological and business innovation. The second battleground involves a focus on future value pools of emerging markets. The third battleground is global, as some tech challengers reach far beyond their local markets to establish an international presence.
Challengers also provide opportunities for partnership and collaboration. Their tendency to work through ecosystems encourages them to be more open to collaborative models than many of their predecessors.
Recognizing the value and the collaboration potential of challengers, many incumbents see challengers as attractive opportunities for investment or even acquisition.
Whether as adversaries or as allies, emerging-market tech challengers are a force to be reckoned with.
ShareChat parent raises US$145m at $2.88bn valuation
Mohalla Tech, the parent company behind social media apps Moj and ShareChat, has raised an additional US$145 million at a market valuation of $2.88 billion.
The latest Series F funding, led by Singapore state investor Temasek, Moore Strategic Ventures (MSV), and Mirae-Naver Asia Growth Fund, is an additional investment beyond the $502 million raised in April this year.
"We are immensely proud of what we have been able to achieve with Moj and ShareChat in the last 12 months. We have been very fortunate to attract a bunch of very high-quality names in our series F and the list just got longer with Temasek, MSV and Mirae-Naver joining hands with us," said Ankush Sachdeva, CEO & Co-founder, Moj and ShareChat.
According to the company, investments raised this year, including the latest, will be used to double down on its plans of building an AI feed, incentivising its creator base and amplifying platform health and safety. In the past few months, the company has hired global senior executives with specialisation in AI and ML and continues to look for more such senior hires.
The continuing growth of social media
Founded in October 2015, the social media company has raised close to $911 million over seven funding rounds so far. This has helped both Moj and ShareChat to continue their growth journey, differentiate and deliver a unique social media experience. Moj has become India’s number one short video app with the highest monthly active users, with an average user time spent of 34 minutes every day, scoring over 4.5 billion views daily.
ShareChat, the Indic language social media platform, is positioned uniquely with an average user time spent of 31 minutes daily. Moj and ShareChat together, with a 340 million-strong user community, envision building a cohesive AI-powered content ecosystem to address India’s growing digital needs.
James McIntyre, Senior Managing Director and COO at MSV said, “We are excited to partner with Moj as they build India’s premier short form video platform, and have been impressed by this management team’s speed and agility in capturing the opportunity. This round will help to accelerate that growth and allow Moj and ShareChat to continue to develop the best ecosystem for content creators and consumers alike.”