iNM Volume 7 | August 2015
Current Buzz
Typically, India-based startups that are yet to receive
funding, receive a valuation of about $2.4 million (Rs 15
crore). For a startup in Silicon Valley this number, termed
as pre-money valuation, is almost double at $4.7 million.
A poor track record of exits is also a dampener for Indian
investors. According to research firm CB Insights,
between 2012 and 2013, Silicon Valley saw 311 exits. In the
same period, India had less than 50 deals, including the
sale of redBus and Hitachi's purchase of ATM services
company Prizm Payments.
Global, which invested $352 million. Japanese telecom
giant Softbank invested $282 million in Indian startups in
2014. During the same period last year, VC firm Nexus
Venture Partners was the largest VC player in the country
with $73 million in funding, followed by Kalaari Capital
with $45 million in six deals. VC firm Sequoia Capital has
made investment worth $208 million in the first four
months of 2015 across 14 deals.
Accel Partners, one of the early investors in the scene have
made multi-stage investments in internet technology
companies between $0.5-50 million in its portfolio of
companies which include BabyOye, BookMyShow,
Myntra CommonFloor, Zansaar, Probe, and Flipkart.
But it isn't far off when India will gain a better ground in
start-ups. Silicon Valley venture capital groups have been
upping their spending, hoping to ride an Ecommerce
market in India projected to be worth $44billion by 2018
as per broker CLSA. e eventual pay-off could be even
larger if, India's potentially vast online marketplace
follows the path taken by China. e investments are
coming. Indian start-ups have already taken off and it
isn't far off when they start gliding smoothly.
Other foreign investors that have shaped the Indian
funding landscape since 2009 are 500 Startups (by Dave
Mclure and Pankaj Jain), and Inventus Capital Partners
among many others.
“It's not how good or bad a startup is, it is
a demand-supply equation. In the Valley,
there are more people chasing the same
deals"
- Sasha Mirchandani
Companies in India have been able to raise high fundings
lately. Paytm has raised the highest amount of the year so
far – $545 million from Alibaba. ShopClues pocketed $100
million. Ujjivan Financial raised $96 million.Recently
acquired Freecharge raised $80 in series,C. Analytics
Indian startups are valued much less than their peers in
Silicon Valley, often nearly by less than half. While most
believe this is due to the difference in the quality of
companies, investors admit that it is more a function of
demand. In mature markets there are more investors
jostling for deals and thereby drivi