The homecoming: Startup boom triggers a brain gain
By Prachi Verma, ET Bureau | Mar 04, 2016, 03.00 AM IST
NEW DELHI: India has for long been hit by brain drain, or constant emigration of highly educated and intelligent people, but of late many of those top talent are returning to the country, mostly to join the Indian startup story.
Headhunters are talking about increasing interest young Indians working overseas show in the country's booming startup sector and a matching appetite among the country's ecommerce firms and startups to lap up this talent, especially those with experience in the in the technology and engineering space. "Executives who are now in their 30s and had left about 10 years ago are looking at returning," said Uday Chawla, managing director at executive search firm Transearch. "These people want either to start their own ventures or be part of the startup ecosystem. They have an urgency to do so or else that idea or concept may get dated," he said. There are at least 20 search mandates for young returning Indian professionals, according to five leading headhunters.
Vineet Rao, who had left for the US in 2000 to join Microsoft, is back in India, trying to put together a startup in cross-border ecommerce space. Based in Bengaluru now, the 36-yearold IIT Bombay alumnus said it's the Indian startup story that has brought him back to homeland. "This is the last big market waiting for huge innovation and development to happen. I had to be here right now," Rao told ET over phone.
Bharath Reddy, another technology professional in his mid-30s, moved back to India six months ago after working in the San Francisco Bay area for almost a decade. "A large part of growth story is here and I had to be part of it," said Reddy who now works with ecommerce major Flipkart in Bengaluru.
There are several other young professionals who have returned home in recent months and several more are waiting for their turn. Headhunters say cash-rich ecommerce firms lead the race for young Indians with work experience in Silicon Valley.
"Ecommerce companies are heavily funded by private equity firms and it's the PE firms that generally give the search mandates for tech talent in the Silicon Valley," said Navnit Singh, chairman and managing director at executive search firm Korn/Ferry International. "Just everyone wants to be part of the chaos here in the Indian startup industry, especially the Indians who left about 10 to 15 years ago and are now in their 30s or early 40s," he said. Singh said demand for such technology and and engineering talent among startups has increased by more than 50% in recent months.
Transearch's Chawla said the firm is currently working on five mandates for globally experienced executives compared to only one such mandate about 18 months ago. Its rival EMA Partners in India currently has six mandates to search for returning Indians compared to only three about a year or so ago. There is a demand for returning Indians not only by e-commerce companies but also large Indian conglomerates, said A Ramachandran, the firm's client partner.
One factor luring this top talent back to India is the promising startup ecosystem fuelled by venture capital money and the government's thrust. Also, top startups are making lucrative offers to these executives. "The remunerations being offered by Indian companies now are getting more attractive than previous years for returning Indians. Otherwise mostly returning from overseas had to take a cut in their salary, but now their salaries are if not more but at least equally matched," said Sunit Mehra, founder and managing partner at Hunt Partners.
Headhunters said the salaries are upwards of Rs 1.5 crore (excluding ESOPs) for young techies and engineers. Sunil Goel, MD of GlobalHunt said that compared to 13 search requests at any given point of time for ecommerce space last year, the firm currently has 25 to 30 mandates this year. Experts said that while demand for overseas Indians was always there, earlier it was mostly for talent in financial services and banking space.
This has changed. "Today it is all about engineers and tech talent in big data, Internet of things, product technology in ecommerce companies, talent for private equity and venture capitalists with experience in startups in the Silicon Valley," said Nicolas Dumoulin, regional director at recruitment firm Michael Page India. Michael Page is currently handling 10 search requests for returning Indians in these spaces. "Techies from Silicon Valley are sought after as they have the pedigree and required knowledge," said Dumoulin.
Vikram Gupta, founder and managing partner of venture capital firm IvyCap Ventures Advisors, said there is at least 40% increase in the number of people coming back to India to either join as CXOs or start their own companies. "This trend will continue at least for a few more years. I keep getting calls from people wanting to come back and already planning to settle back," he said.