A Clue To Softbank's Mega Deals In India Can Be Traced To Its Alibaba Hit

With mega venture deals now hitting India's startup shores, it seems clearer than ever that my Startup Asia premise of a narrowing gap between China and India's tech scene is spot on. It's just taken longer than the five years I predicted in Startup Asia for India to come close to matching China's Baidu, Alibaba, Tencent and Xiaomi. It's more like 10 years, if India can keep the momentum going.

Some evidence that India might produce some winning startups on the scale of China's own mega successes can be seen in the recent venture capital investments that are pouring into emerging Indian companies. Take the $627 million that Japanese tech giant Softbank invested this week in an eBay of India, Snapdeal, at a $1 billion dollar valuation.  Or look at the $210 million investment in the Uber of India, Olacabs, a deal that Softbank again led this week with previous investors Tiger Global, Matrix Partners India and Steadview Capital.

If you want an indication of where this might be going, consider that Softbank was an early investor in Alibaba. Softbank aims to replicate its China success in India.

More proof of India's climb can be seen in the new venture funds that are being raised to go after this opportunity. Lightbox recently raised a $100 million, second fund to invest in as many as eight startups over the next two to three years. The fund, run by partner Sandeep Murthy, builds upon a first Lightbox fund that took over the portfolio of  Sherpalo Ventures and Kleiner Perkins. Sequoia Capital also is investing in a new fund, $530 million. See my earlier Forbes post covering these developments.

Murthy, who came to India in 2005 to head up Sherpalo Ventures with Google angel investor Ram Shriram, is keen on the prospects for India startups to break through. He sees a new steadier, more consistent government and strong growth in online business models as the drivers of India's digital rise. Rising valuations to invest in up and comers could be a downer though.

Still, the promise of emerging Indian companies is not to be dismissed.  Several rising startups have substantial revenues, a profitability track, a footprint outside India and a goal to go public in the U.S. -- or raise a mega round of finance.

The well-established mobile marketing platform inMobi comes to mind. So does GreenDust, which sells refurbished products online at cheaper prices in India, Africa and other developing markets. So, of course, does e-commerce contender FlipKart, which earlier this year raised $210 million and acquired online fashions retailer Myntra. All of these companies are backed by venture capitalists, many of them with strong links to Silicon Valley.

While India does not have an Alibaba, these new financings and funds signal a new more confident, optimistic India that may finally be catching up to China. What India could use to put this journey on a faster track is a splashy IPO in New York. The last big one was online travel site MakeMyTrip, and that was 201o. Stay tuned.