Venture Investments up 69% at $16.4 Bn in Q2

Venture investments grew 69 per cent to USD 16.4 billion in the September quarter on the back of a jump in the number of transactions, a report said on Thursday.

This is the strongest ever quarter by deal values for the private equity and venture capital industry, consultancy firm EY said in the report.

Its partner Vivek Soni said deal activity grew across all three main asset classes of private capital
including private equity, infrastructure and real estate.

"With increasing interest from large global pension and sovereign wealth funds combined with the evolution of new investment structures like InvITs and REITs, we continue to project sustained growth in real asset investments in India," he said.

In a similar report, its rival KPMG also said venture capital investment in India strengthened during the September quarter led by a slew of large deals of over USD 100 million.

However, it was more circumspect on the outlook front.

"VC investment in India is expected to remain strong in the December quarter and the March quarter. However, given the current credit squeeze it might not be as robust as it has been over the past two quarters," it said.

The EY report said that exits have been subdued as the total number stood at USD 8.1 billion for the first three quarters as against USD 8.5 billion in the same period last year, the data said.

"The Governments step to rationalise corporate tax rate and introduce positive changes to the FPI policy are steps in the right direction, and increase attractiveness of India for long-term capital investment relative to it's emerging markets peers," it said.

From a fund raising perspective, the report said there was an 11.5 per cent dip at USD 2.3 billion of new firepower being raised. PTI AA

Overall Indian Startup Funding Drops to 36% YoY, Early Stage Funding Worst in 4 Years in H1 of 2018

Just two months back an India Startup Outlook Report 2018 released by InnoVen Capital said that many startups in India, especially early-stage ones, expected the fundraising environment to be difficult in 2018 compared to the previous year. The study seems to come out true when it comes to total investment amount infused in first half (H1) of 2018.

According to a report by Economic Times, although the first half of 2018 has given a thrust to the capital flow in the ecosystem with investments worth $3.6 billion made across 411 deals in startups, it however saw nearly a 36% drop in investment year-on-year. The year-2017 had seen 571 deals in the space totalling investment of $5.6 billion.

It is to be noted that the investments in the first half of last year were mainly driven by large ticket deals including e-commerce giant Flipkart, online payments and financial services firm Paytm and ride-hailing platform Ola’s massive fund raises. Flipkart and Paytm had both raised $1.4 billion last April'17 and May'17, respectively. In contrast, this year's largest deals, be it Policybazaar, Swiggy, Zomato or Paytm Mall, have all reportedly ranged between $150-400 million, at best.

Going forward with the report, when it comes to early stage startup funding in H1 2018, the deals in seed and angel investments reportedly continue to struggle with only $137.8 million invested in startups this year, against over $200 million in the first half (H1) of 2017. Investments in the seed stage and angel money are, in fact, down 45% from H1 2017 and stand 57% lower than the 528 deals struck in H1 2016.

This is the lowest, and thus worst, half-yearly investment record by deals, at the seed stage in the past four years in India's startup ecosystem. According to investors this is due to due to the lack of quality companies, as startup formation still remains pending.

"Formation of new startups is picking up ever so slightly after having been dormant for a long time. We are hence, in a bubble where the amount of capital available to India stays strong but where will it go?" says the Economic Times report citing an unnamed angel investor.

This, in turn, made investors to sign larger cheques offering high valuations to selective market winners across early to mid stage venture capital funding rounds contrasting the fall in seed and angel investments.

However, on a positive side the data of the report also shows that investments across series-A, -B and -C stages have fared far better, with 165 deals fetching up investments amounting $1.6 billion, which is a 60% jump from the capital pool of $1 billion across 140 deals that flowed into these stages during H1 2017.

Startups across financial services, content and digital media are witnessing a spike investor interest driven by the rush of Chinese venture capital bets in these spaces, especially in the past six months.

In order to spur startup formation and boost confidence among entrepreneurs, early-stage venture capital funds including Matrix Partners and India Quotient have been making investments in startups at the pre-product stage itself, across consumer brands, fintech, content and social media sectors, according to investors in the know.

The role of government is also crucial for creating better fundraising environment by addressing challenges faced by startups such as giving some recognition to 'angel tax', providing some more favourable policies for the startups such as tax holidays etc.

Last month, we reported how India’s largest lender State Bank of India (SBI) made a joke of itself when after two-years of setting up a Rs.200 crore startup fund, it could not made any investment and said that "investing in startups is RISKY”.

Besides this, the goods and services tax (GST) introduced last year is also one of the factors that impacted startups.

Overall Indian Startup Funding Drops to 36% YoY, Early Stage Funding Worst in 4 Years in H1 of 2018

Just two months back an India Startup Outlook Report 2018 released by InnoVen Capital said that many startups in India, especially early-stage ones, expected the fundraising environment to be difficult in 2018 compared to the previous year. The study seems to come out true when it comes to total investment amount infused in first half (H1) of 2018.

According to a report by Economic Times, although the first half of 2018 has given a thrust to the capital flow in the ecosystem with investments worth $3.6 billion made across 411 deals in startups, it however saw nearly a 36% drop in investment year-on-year. The year-2017 had seen 571 deals in the space totalling investment of $5.6 billion.

It is to be noted that the investments in the first half of last year were mainly driven by large ticket deals including e-commerce giant Flipkart, online payments and financial services firm Paytm and ride-hailing platform Ola’s massive fund raises. Flipkart and Paytm had both raised $1.4 billion last April'17 and May'17, respectively. In contrast, this year's largest deals, be it Policybazaar, Swiggy, Zomato or Paytm Mall, have all reportedly ranged between $150-400 million, at best.

Going forward with the report, when it comes to early stage startup funding in H1 2018, the deals in seed and angel investments reportedly continue to struggle with only $137.8 million invested in startups this year, against over $200 million in the first half (H1) of 2017. Investments in the seed stage and angel money are, in fact, down 45% from H1 2017 and stand 57% lower than the 528 deals struck in H1 2016.

This is the lowest, and thus worst, half-yearly investment record by deals, at the seed stage in the past four years in India's startup ecosystem. According to investors this is due to due to the lack of quality companies, as startup formation still remains pending.

"Formation of new startups is picking up ever so slightly after having been dormant for a long time. We are hence, in a bubble where the amount of capital available to India stays strong but where will it go?" says the Economic Times report citing an unnamed angel investor.

This, in turn, made investors to sign larger cheques offering high valuations to selective market winners across early to mid stage venture capital funding rounds contrasting the fall in seed and angel investments.

However, on a positive side the data of the report also shows that investments across series-A, -B and -C stages have fared far better, with 165 deals fetching up investments amounting $1.6 billion, which is a 60% jump from the capital pool of $1 billion across 140 deals that flowed into these stages during H1 2017.

Startups across financial services, content and digital media are witnessing a spike investor interest driven by the rush of Chinese venture capital bets in these spaces, especially in the past six months.

In order to spur startup formation and boost confidence among entrepreneurs, early-stage venture capital funds including Matrix Partners and India Quotient have been making investments in startups at the pre-product stage itself, across consumer brands, fintech, content and social media sectors, according to investors in the know.

The role of government is also crucial for creating better fundraising environment by addressing challenges faced by startups such as giving some recognition to 'angel tax', providing some more favourable policies for the startups such as tax holidays etc.

Last month, we reported how India’s largest lender State Bank of India (SBI) made a joke of itself when after two-years of setting up a Rs.200 crore startup fund, it could not made any investment and said that "investing in startups is RISKY”.

Besides this, the goods and services tax (GST) introduced last year is also one of the factors that impacted startups.

iSpirt launched 'BootUpINDIA', to recognise bootstrapped entrepreneurs & startups

This Independence Day finally gave something to Entrepreneurs to cheer about. BootUpIndia was launched on 15^th August 2014 on the eve of India’s 68^th Independence Day. It is an initiative by iSPIRT which is looking out to help bootstrapped entrepreneurs and startups.

iSPIRT strongly believes that company building can take place both through Venture Funding and Bootstrapping. Though, in India the scene is a little different. The Venture Funding path is being overplayed by the incubators and media and due to this bootstrapped companies end up bearing the repercussions, but not anymore, because BootUpINDIA is here to redress this bias.

Now and then, it has been repeatedly proved that even Bootstrapped companies can also turn into successful companies. Some of the companies which have been able to turn it around are HappyFox, FusionCharts, Cosmic Circuits, Kayako, RateGain and BrowerStack. In fact, bootstrapped companies can also transform into Billion dollar companies, for example Zoho.

Venture Funding provides a startup with media validation which most of the times transforms into customer traction.  A good VC also ends up getting access and mentoring to expert entrepreneurs in the portfolio of the VC.  BootUpIndia is here to provide almost the same benefits to some selected bootstrapped companies. Their goal is to help these companies scale their game and become more successful.

The companies are selected through an awards process and the companies who make the cut are then provided with media coverage through Customer Impact stories, group mentoring from expert entrepreneurs and access to certified performance warrants for deeper customer relations, among other things.

BootUpIndia has a strong belief that their package can have a dramatic impact on the enterprise value of the selected bootstrapped companies, which in turn would help the software product industry to grow faster even with a limited availability of early stage capital.

The applications for the BootUpINDIA award are open till 15^th September 2014 and the Award Day is scheduled to be held on 2^nd October 2014. The BootUpINDIA awardees will get five things-Industry validations, structured group mentoring, media visibility, certified performance warrants and a lot of perks.  The perks would include a privileged access to all other iSPIRT programs. In addition to that, the awardees will get access to co-working spaces and discounts from partners including Zoho CRM, Amazon Web Services and FreshDesk.

iSpirt launched 'BootUpINDIA', to recognise bootstrapped entrepreneurs & startups

This Independence Day finally gave something to Entrepreneurs to cheer about. BootUpIndia was launched on 15^th August 2014 on the eve of India’s 68^th Independence Day. It is an initiative by iSPIRT which is looking out to help bootstrapped entrepreneurs and startups.

iSPIRT strongly believes that company building can take place both through Venture Funding and Bootstrapping. Though, in India the scene is a little different. The Venture Funding path is being overplayed by the incubators and media and due to this bootstrapped companies end up bearing the repercussions, but not anymore, because BootUpINDIA is here to redress this bias.

Now and then, it has been repeatedly proved that even Bootstrapped companies can also turn into successful companies. Some of the companies which have been able to turn it around are HappyFox, FusionCharts, Cosmic Circuits, Kayako, RateGain and BrowerStack. In fact, bootstrapped companies can also transform into Billion dollar companies, for example Zoho.

Venture Funding provides a startup with media validation which most of the times transforms into customer traction.  A good VC also ends up getting access and mentoring to expert entrepreneurs in the portfolio of the VC.  BootUpIndia is here to provide almost the same benefits to some selected bootstrapped companies. Their goal is to help these companies scale their game and become more successful.

The companies are selected through an awards process and the companies who make the cut are then provided with media coverage through Customer Impact stories, group mentoring from expert entrepreneurs and access to certified performance warrants for deeper customer relations, among other things.

BootUpIndia has a strong belief that their package can have a dramatic impact on the enterprise value of the selected bootstrapped companies, which in turn would help the software product industry to grow faster even with a limited availability of early stage capital.

The applications for the BootUpINDIA award are open till 15^th September 2014 and the Award Day is scheduled to be held on 2^nd October 2014. The BootUpINDIA awardees will get five things-Industry validations, structured group mentoring, media visibility, certified performance warrants and a lot of perks.  The perks would include a privileged access to all other iSPIRT programs. In addition to that, the awardees will get access to co-working spaces and discounts from partners including Zoho CRM, Amazon Web Services and FreshDesk.