Indian Economy News

VC investments in Indian firms up three-fold in 2015

Bengaluru: Indian startups have never had it so good, with the flow of venture capital investments turning into a flood. The past week alone has witnessed several high value VC funding deals, including Ola ($400 million), Zomato ($50 million), Grofers ($35 million), MobiKwik ($25 million), ZopNow ($10 million) and PepperTap ($10 million).

Till date, the year has seen $2.36 billion in funding, more than three times the figure for the first four months of 2014 ($716 million), according to estimates by VC funding tracking firm Tracxn!. In less than four months this year, VC investments have touched almost half the figure for the whole of 2014 ($4.78 billion).

This year has already seen four $100-million-plus deals - in digital wallet Paytm ($585m), cab aggregator Ola ($400m), classifieds platform Quikr ($150m) and etailer ShopClues ($100m), against two such deals in the same period last year.

Last year, Flipkart and Snapdeal accounted for almost three-quarters of the year's total fund raise. This year, a much broader set of companies is attracting significant funds.

The number of $10-million-plus deals for the year so far has reached 35, more than double the 14 such deals till April-end, 2014. The whole of 2014 saw 50 such deals.

Similarly, this year has already seen 75 $1-million-plus deals, which is 50% higher than the figure for the corresponding period last year.

Industry observers say that the increasing number of exits and high valuations are giving confidence to investors. "This is a positive momentum that the ecosystem has gained," K Ganesh, serial entrepreneur and Portea Medical chairman, told TOI. He added that the Series C and D rounds of funding are happening at a very high valuation and so VCs want to get a foothold in startups earlier.

"The valuations in Series A and Series B are still reasonable and hence this frenzy at the bottom. If you come in early, you have some stake in the firm and your average cost of investment is also less," Ganesh added.

Abhishek Goyal, CEO of Tracxn!, told TOI that as companies like Flipkart continue to grow, they are building trust among more and more consumers to transact online. "Along with this, their rapid growth even at this size, clearly showcases the depth of the Indian market to all investors. Hence, India is among the hottest markets today among tech investors globally," he said.

E-commerce and transportation continue to be investor favourites, but segments like classifieds, digital wallet & recharge, and food tech have seen interest build up this year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.