Editor’s note: Dileepan Siva is chief revenue officer at Moovweb.

The Silicon Valley “tech bubble” is a popular topic of discussion among business pundits, entrepreneurs and analysts who have dissected and predicted the upcoming “burst” for nearly the last decade. For all the talk of winter is coming and a slowdown in private capital markets, it’s hard to say if, or when, this will ever come to a head — at least in Silicon Valley.

But there’s no question a tech bubble is emerging, just not where you might think.

India’s tech bubble

Overvalued startups focused on growth over revenue are a problem that stretches far beyond U.S. borders, and it’s an even bigger problem in India. Granted, a tech bubble bursting in India isn’t going to send shock waves through the ecosystem worldwide, let alone the public markets in that country, as it would in the U.S. However, it will impact the pace of innovation and investor risk appetite in the short-term in India and other emerging markets (other than China, the behemoth outlier) who share similar market characteristics (like Brazil, Indonesia and Nigeria).

The successes — or failures — from what works for the Indian consumer in their home market translates to the rest of the world significantly more so than following the successful models of companies like Alibaba, Tencent and others in China. Even if you don’t care about other emerging markets, experts agree India will soon be the most important economy in the world.

Rural India goes mobile

Much of India’s future success depends on whether the government can leverage its demographic potential by training its workforce and providing adequate infrastructure for businesses. This challenge is compounded by where the growth in mobile consumers is occurring. According to The Economist, India will see more people come online in the next 15 years than any other country, with the majority of that growth coming from rural, not urban areas.

These new mobile consumers will generally be poorer and lack the purchasing power needed to support a booming tech sector. While India’s internet and smartphone penetration is growing incredibly fast, this does not directly translate either into users having the ability to buy voraciously like their Chinese counterparts or new companies able to deliver goods in a timely fashion to rural communities.

More to the point, mobile data plans in India, like other emerging markets, do not make the robust use of the internet possible for the vast majority of people. That is not a simple problem to fix, but it is certainly easier to resolve than trying to improve livelihoods and logistics from the top down. Plus, the regulatory context in the country leaves a lot to be desired — just ask Facebook about “digital colonialism” related to its “Free Basics” initiative.

An inevitable burst

Morgan Stanley released a report earlier this year estimating e-commerce sales in India of $119 billion in 2020 — a seven-fold increase from its 2015 prediction. Travel is expected to account for 60 percent or more of e-commerce, with electronics coming in at 30 percent, according to the Boston Consulting Group and Retailers Association of India. A four- to seven-fold increase in market size does not seem too crazy — until you pair it with e-commerce startup valuations in India.

Look at the top e-commerce company in India — Flipkart, most recently valued at $15 billion. That is just shy of Morgan Stanley’s estimate for the entire e-commerce market in the country, and does not even include the next two competitors, Snapdeal and Amazon India. Flipkart has approximately 45 percent market share, which means the company should have roughly $7 billion in gross merchandise volume (GMV) in 2015 using Morgan Stanley’s calculations. So the company is basically valued at more than two times its GMV. But GMV is not sales or revenue to Flipkart; it is total sales of online products.

Another reason for the flood of investment into India is the fear of missing out — or FOMO.

Flipkart likely takes a nominal revenue share or take rate like Amazon does, but they also must shoulder significant user acquisition costs, meaning they are losing money on every transaction for the foreseeable future. Granted, this is not unlike Amazon’s past strategy, but Amazon was never valued at equal to the entire market’s value either. Add on the fact that approximately 40 percent of the market is non-travel and you have to wonder how these numbers add up. It is no surprise that Flipkart saw its valuation marked down by almost a quarter by three fund investors.

Another reason for the flood of investment into India is the fear of missing out — or FOMO — on something akin to China’s enormous success. In one camp, you have investors Naspers and Softbank whose portfolios include very successful bets in the Chinese and Indian markets (JD.com, Tencent and Flipkart for Naspers, and Alibaba and Snapdeal for Softbank). In the other camp, you have the investors like Amazon who misfired on Chinese growth and do not want to repeat past mistakes. Beyond that, there are local and international VC firms like Sequoia and Accel, as well as more opportunistic investors like Tiger Global that sense opportunity and do not want to be left out.

What’s next for unicorns in India

So what does this mean for the other unicorns in India? Investment in Indian startups decreased in the first half of 2016 to $2.1 billion, a 40 percent decline from the same period in 2015, when startups raised $3.5 billion. Anecdotally, it seems as though this retrenchment is not due to a reassessment of the startups in question but is part of a global reassessment of investor appetite for tech startups worldwide. It is likely that market leaders like Flipkart, Ola and others will get devalued markedly, but will continue to receive investor interest due to FOMO.

This does not portend well for the rest of Indian startups that are not No. 1 or No. 2 in their market segment. In addition, for some companies, it may be too early to dive into a fledgling market that lacks a needed expansion of the middle class. While e-commerce retailers and marketplaces can leverage technology to achieve low capital costs up and down the value chain, this is less true for food or grocery delivery companies that have to contend with India’s poor infrastructure.

When the number of turns per hour is the key metric for success and profit, logistics is critical. Add to that high user acquisition and retention costs thanks to innumerable discounts and subsidies, and it is hard to believe these burn rates can last much longer given the poor unit economics. Consider food delivery startup TinyOwl’s recent termination of 100 employees, shutting down operations in smaller cities and raising prices — that is likely just the beginning. When asked about those changes, TinyOwl CEO Harshvardhan Mandad said earnestly, “The market dynamics changed. People now want to invest in sustainable businesses.” When do they not?

Looking ahead

A potential bright spot is the crop of Indian startups that are taking the learnings from their home market and applying it to other, more mature markets while waiting for India to become viable. Zomato, for instance, a listings service for restaurants, expanded overseas from its New Delhi headquarters because the Indian market was too limited. Most of India’s restaurants are extremely inexpensive and a customer’s average ticket is too low to justify the support, whereas other parts of Asia and even Europe are much more ripe for the pickings. InMobi, a mobile advertising platform headquartered in Bengaluru is another Indian startup with substantial operations overseas, including the United States. Their motivation is simple: The mobile ad market is bigger outside India.

So how bad is the bubble in India? Is it at the point where Silicon Valley was in the dot-com bubble from 1999-2001? No. This is private market overvaluation, not public markets. But compared to the “bubble” we have in Silicon Valley, it is undoubtedly worse.

All said and done, India will be one of, if not the biggest, internet market of the future, but I wouldn’t bet on that happening anytime soon.