Why Facebook is investing so much money in Indian startups

Deb Liu Facebook

Screenshot / YouTube

Deb Liu, Facebook's head of commerce

Facebook launched FBStart in May 2014 to give early-stage mobile developers all over the world access to free tools and services that could help them grow their companies.

In the last year and a half, one region has emerged as a bright spot: India.

Of the $50 million in benefits the company distributed to to Asia Pacific startups, $20 million went to mobile apps in India.Advertisement

"It's been really exciting to seen how [the program] has grown since we launched it" Deb Liu, Facebook's head of commerce, tells Business Insider. "Especially in APAC, but in India in particular."

Today - when more than 70% of developers who integrate their apps with Facebook live outside the US - India has the largest Facebook international developer community of any other region in the world. More than 75 percent of top-grossing apps in India are integrated with Facebook.

Liu gushed about one FBStart-assisted app in particular: a payments recommendation startup called CardBack. The app helps you decide which credit card you should use in any given situation based on which rewards each offers.

Cardback deomonstrates the perfect Facebook trifecta.

The app has baked-in Facebook Login, meaning that users can sign-up using their Facebook account, it drives its growth through Facebook mobile app install ads, and it monetizes via the Facebook Audience Network. Liu says that using mobile app install ads (for free, thanks to a chunk of Facebook ad credits given to FBStart companies), Cardback increased their installs by 5x in six months. Advertisement

Cardback's model of relying so heavily on the Facebook ecosystem for growth and monetization is exactly what the company wants to see from as many developers in that region as possible.



Why India is so important for Facebook

Right now, only a sliver of India's population is online, but it still has the third greatest number of internet users in the world, after China and the United States, and is similarly ranked in smartphone penetration.

In 2010, Facebook had only 8 million users in India. Now it has a whopping 132 million Indian users.Advertisement

That makes it Facebook's second largest geography, not far behind the 193 million people using the social network in the United States.

But the company hasn't quite figured out how to make money in India yet.

Analysts for Counterpoint Research recently told Reuters that they estimated Facebook earns $15 million from India a quarter, while Google earns $350 million.Advertisement

Facebook only earns $0.15 per user in India every quarter versus the $7 to $8 it makes on each US user, other analysts add.

So, as more Indians get online for the first time via smartphone, Facebook wants there to be a thriving app ecosystem waiting to greet them - where all the apps rely on it for growth and making money, for course.

And FBStart gives it the perfect way to get in early. Advertisement

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