Talent crunch biggest obstacle to Indian startups’ US expansion, says report

• Finding the right talent, high cost of expansion are the biggest challenges for Indian startups who wish to expand into the US.
• According to a report by CII in 2020, around 155 Indian companies created nearly 125,000 jobs in the US with investments of over $22 billion.
• Companies that want to expand to the US need to spend considerable money and time in order to do so.

About 75% of Indian startups want to expand their businesses in the US market but are not able to do so because of a lack of talent, reveals a new report by Alariss Global, a tech-enabled global expansion marketplace.

“Many respondents also stated that they have tried entering the US market in the past but had their hands burned due to a variety of reasons, especially hiring the wrong local person to lead sales for them, and were forced to delay their plans,” the report highlighted.

However, talent is not the only hurdle that startups face. According to the respondents, the biggest hurdles that get in the way of expanding in the US, other than hiring talent, are the costs of expansion and managing overseas teams.

“Indian startups have a strong interest and capability to take their products to a market like the US. As barriers to entry reduce and access to global resources become more democratised, I think the time is right for Indian companies to grab the opportunity and make a global impact,” said Joyce Zhang Gray, chief executive officer (CEO) and co-founder of Alariss Global.

The survey received responses from over 1,000 Indian startups, out of which 42.9% were Series A-funded and the rest were seed-funded or bootstrapped.

In the past few years, various Indian SaaS, food-tech, hospitality, mobility companies have made a mark globally thanks to their cost-effective world-class products.

According to a report by the Confederation of Indian Industries (CII) in 2020, around 155 Indian companies had created nearly 125,000 jobs in the US with investments of over $22 billion.

However, expansion in a market like the US is still not an easy task for small and early-stage companies.

“In most cases, companies that want to expand to the US need to spend considerable money and time in order to do so. More often than not, the CEO or the executive team has to make a visit to the US in order to set up operations. The process can take up to 6 months and isn’t always successful,” the report added.

The report also revealed that over 95% of the startups looking to scale up their businesses were looking for a local partner who would manage the sales vertical in the country. About 24% of respondents said they wanted a partner who could also provide a local tax accountant, while 19% said they wanted a partner who could also provide a local lawyer.

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