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India is going digital. The country is breeding unicorns. We have multiple new-age companies innovating in various arenas. They are taking a step ahead and joining the listed space. Zomato’s spectacular debut shows the potential fintech firms store. But Mohandas Pai, former director of Infosys, highlights a key fact that deserves attention – Where is Indian money in this digital economy?

“Most unicorns are backed by global capital. We need Indian capital to get into new-age companies. India is, in fact, on its way to becoming a digital colony,” says Pai.

Pai appreciated that the money is flowing in technology startups, but the lack of Indian money in the growing digital economy disappoints him.

“Out of the $70 billion that came in the last six years, only 10% is Indian money. We want more Indian money to come in,” he says.

“Even if we get to $150-200 billion in technology by 2025, how much of it will be Indian capital? May be $25 million. Is that enough? What is the point of building a great digital economy in this country where everything is owned by foreign capital?” he wonders.

Pai compares the insurance behemoth Life Insurance Corporation (LIC) with Canadian pension funds. “LIC has a balance sheet of Rs 35 lakh crore. How much of it is invested in new technology? Nothing. It has around Rs 1,500 crore invested in some old funds. On the other hand, Canadian pension funds invested $10 billion in India and $2.5 billion in technology. They are taking the currency risk. They’re taking the so-called India risk. They are coming here, and they are happy. Indian pension funds are not doing it.”

Pai blames bankers in Mumbai. “Mumbai is out of tune with the new reality of India about what is happening in the digital world. All the fund managers in Mumbai are doing what they were doing 20 years ago and they are good at it. I have no quarrel with that, but you’ve got to invest in the new economy,” he emphasizes.

After Zomato, a lot of other fintech players such as Paytm, Policybazaar, and Mobikwik are all set to come up with IPOs. “Luckily the listings are happening in India because the markets are buoyant. But, out of 58 unicorns in India, around 30 are domiciled outside of India. For example, Flipkart is not an Indian company. It is an MNC. These unicorns are domiciled outside because they were all made to believe by people in Bombay that you can’t get capital in India.”

Pai has a message for ace investor Rakesh Jhunjhunwala. He wants the Big Bull to be a mascot and invest in technology companies. “I want you to invest in technology and lead the way? You don’t have to invest $10 billion, but at least you have to have your foot in it.”

Pai was speaking at a panel discussion organised by Equirus Group, which celebrated its 14-year anniversary last week.