A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated by a handful of founders or one individual. These companies offer a product or service that is not currently being offered elsewhere in the market, or that the founders believe is being offered in an inferior manner.
India has the 2nd largest startup ecosystem in the world; expected to witness Year on Year (YoY) growth of 10-15%. India has around 20000 startups, 4750 of these are technology startups (source: starupsinda.com).
STARTUPS JOURNEY CAN BE SEEN IN THREE STAGES
- IT Centric startups which came into effect in the 1980s. e.g. Infosys, TCS, Wipro etc.
- Dotcom based startups of the 1990s e.g. Naukri.com, makemytrip, Shaadi.com etc.
- Powered by mobile and broadband internet boom e.g. especially SMAC ( Social, Mobility, Analytics and Cloud) e.g. Inmobi, Paytm, Flipkart, Snapdeal, redbus, Zomato etc.
TOP DEALS IN FIRST QUARTER OF 2018 (Source: your story.com)
FUNDING TO TECHNOLOGY STARTUPS IN 2014-2018 (Source: inc42.com)
FINTECH IS MOST FAVORED
Fintech is the most favoured sector for receiving funding, initially buoyed by demonetisation in November 2016, which created a temporary cash shortage and saw millions of Indians adopt non-cash payment methods, primarily by way of e-wallets. What stands out aboutFintech is the spread of deals across early and later stages.
The many early-stage deals in Fintech (about 60 deals) show how the field is still wide open, despite the presence of a Goliath like Paytm.
Also, the companies are quite diverse, with lending platforms, tech-enabled investment advisory and money management startups all raising early-stage funding.
The Fintech space also saw a healthy number of later stage deals with companies like lending startup Capital Float, mobile payments service provider Mswipe, and digital payments venture MobiKwik all finding backers.
TOP COMPANIES BY FUNDING (SOURCE: YOURSTORY.COM)
DEBT FINANCING FOR STARTUPS
The traditional banking system, with its focus on collateral- based debt, has historically been unable to cater to the tech startup ecosystem.
The rise of venture debt funds like Trifecta Capital, InnoVen, and IntelleGrow is now ensuring that startups do not have to resort only to equity finance to fulfil their capital requirements.
It is not just specialised debt funds that are offering this type of capital. Banks too now view startups – primarily those that have scaled to a certain extent and raised a few rounds of venture capital – as worthy of being offered credit. For instance, health and fitness
startup Curefit raised $10 million in debt funding from HDFC Bank and Axis Bank in Q1 2018.
TOP SOURCES OF FUNDING (SOURCE: YOURSTORY.COM)
MOST ACTIVE VENTURE CAPITAL FUNDS IN INDIA
- ALIBABA.COM
- ACCEL PARTNERS
- AARIN
- BERKLEY (UCLA)
- BERTELSMANN
- BLUME VENTURES
- ENDIYA
- FIRESIDE VENTURES
- FUNDAMENTUM ADVISORS
- FOXCONN
- HELION VENTURES
- IRONPILLAR
- IDG
- KALAARI
- LIGHTSPEED
- MATRIX PARTNERS
- MICROSOFT VENTRES
- NASPERS
- NEXUS
- OMIDIYAR NETWORK
- QUALCOMM VENTURES
- SAIF PARTNERS
- STELLARS
- SOFTBANK
- SEQUOIA
- TEMASEK
- TENCENT
- T3 CAPITAL
- TIGER GLOBAL
- UNITUS SEED FUND
INDIA'S UNICORNS
- FLIPKART
- PAYTM
- OLA
- INMOBI
- ZOMATO
- SWIGGY
- BYJU'S
- RENEW
- SHOPCLUES
- QUIKR
- HIKE
- POLICYBAZAAR
INCUBATORS AND ACCELRATORS
Startup accelerators and incubators are organizations that seek to help startups attain success. Startup accelerators tend to focus on providing startups with mentorship, advice, and resources to help the startups succeed, including a Demo Day, a day to focus the attention of the startup investor community on the startups through hosting a series of investments pitches from the startups to startup investors.
Accelerators tend to not offer dedicated office space to startups (and may encourage startups to find their own dedicated space), but may have a physical location for shared resources and accelerator events such as invited guest speaker talks and advising office hours. Incubators tend to offer dedicated office and development space to the startups for a set period of time.
Startup accelerators and incubators can get involved at all stages of a startup’s development, from idea stage to revenue-generating, late stage. However, most tend to focus on relatively early stage startups, as this is when companies can typically most benefit from outside help.
MULTINATIONAL COMPANIES WITH ACCELERATORS IN INDIA
SOCIAL IMPACT ACCELERATORS AND INCUBATORS
- Unltd.
- Dasra Executive Education Program
- Deshpande Foundation
- Khosla Labs
- Rural Technology Business Incubator
- Villgro
- Canadian Technology Accelerators
