Start-up India secures $9bn in investment in 2015

03-Feb-2016 #Digital India Source: India Inc

The Indian government’s agenda to create a more conducive ecosystem for start-ups gathered considerable momentum in 2015.

Recently India Inc. CEO Manoj Ladwa wrote that for India to deliver quality jobs and growth it needs “disruptive innovation” and for that a vibrant start-up ecosystem is imperative. Going by the sheer number of deals struck in 2015 and the money raised, it seemed global investors also feel the same way and they are betting heavily on Indian start ups.

Last year the total funding raised by Indian start ups was $9-billion. Between January and December 2015, the number of deals struck jumped to over 1,005 deals, compared to 300 deals in 2014 worth around $5 billion.

Total-Monthly-deals-in-year-2015

It is against this backdrop that Prime Minister Narendra Modi is set to launch the ‘Start-up India, Stand up India’ campaign. It has been widely touted as one of the country’s most transformative policies, which aims to smoothen the road towards entrepreneurship for an increasingly tech-savvy nation.
Quaterly-funding-in-Indian-Startups-20151According to a study by the Internet and Mobile Association of India (IAMAI) and IMRB International, the number of Internet users in India crossed the 350 million mark in 2015, doubling in size from the previous year. This arguably makes the mobile and tech sector the most vibrant within the start-up scenario.

Just this week, Gurgaon headquartered online marketplace Shopclues became the latest Indian start-up to receive a billion-dollar valuation from investors as the company gears up to go public next year.

It joins the ranks of Flipkart, Inmobi, Ola, Paytm, Quikr, Snapdeal and Zomata in the rapidly growing billion dollar club, dubbed “Unicorns”. Seven of India’s eight Unicorns have cornered the lion’s share of nearly 33 per cent – about $3 billion – of start-up investments in 2015. The stand out sectors are clearly in the IT and tech and e-commerce with fashion and food retail, logistics management and local services marketplaces among the ones to watch in 2016. Some of these larger firms are already looking to expand their wings beyond India and develop a global footprint.

It is also widely expected that Prime Minister Modi on launch of the Start Up Campaign will be announcing tax sops for investors who take risks on start-ups and therefore, make it easier for angel investors to back more ventures especially the global Indian diaspora. This would be another asset class that HNI individuals could look to as an option and various funds are being set up to cater to that such as Blume Ventures, Unicorn Ventures among others.

The numbers demonstrate the Indian start-up ecosystem is growing and maturing fast with opportunities for entrepreneurs and investors alike – but undoubtedly, the challenges have not all gone away and 2016 would be the year to resolve them.

Indias-Billion-dollar-start-ups-2015

Above Article was first published in India Inc.’s India Investment Journal

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