The Local VC and Startup Scene: India

Today’s featured country is a country of superlatives in a multitude of areas: in terms of its size as well as with regard to its population and economic power. It is the largest democracy in the world and home to a plethora of cultures and ethnicities. At the same time, it is a country of harsh contrasts with both some of the world‘s richest and the world’s poorest people living within the borders. The same goes for technology as there are extremely advanced and merely archaic technologies within walking distance. One man by the name of Mohandas Karamchand - often referred to by his honorific title Mahatma - is undoubtedly one of the most famous people in history: Gandhi.
The Indian VC scene has grown substantially over the course of the last several years. A peak occurred in 2015, when Indian companies raised USD 9 billion. This amounts to half of the investments since 2010. The enormous potential and financial attractiveness can be seen by the fact that the country is expected to have the highest growth rate of any developing economy in 2017 by the IMF. At an expected 7.2%, India would grow notably more than its fiercest competitor for the title, the Philippines at 6.7%. This year in particular, India seems to be growing stronger than in the recent past with USD 4.7 billion invested in startups in Q1 alone.
Startup hubs include the most populated city, the National Capital Region (NCR) and largest IT service provider. Namely, these are Mumbai, Delhi (NCR) and Bengaluru, a city which is home to IT behemoths such as Wipro and Infosys.
Some of the more famous Indian VCs include Kalaari Capital, Ventureast and Blume Ventures. Quite naturally, the big global VCs such as Sequoia and Accel Partners are active in India as well.
While people do usually not associate India with top-notch university education at first, there is a point to raise about the various Indian Institutes of Technology or IITs for short. According to a January 2017 Forbes article, 13 unicorn founders graduated from these institutions.
Important growth sectors include health care and education. Due to the turmoil caused by PM Modi’s demonetization policy in 2016, KPMG expects the Fintech sector to demonstrate exceptionally strong growth in the near future. Talking about policy, let us take a look at a quote by Blume Ventures‘ Sanjay Nath:
India would benefit greatly from more startup-friendly policies. Startup India, did put India on the map like never before. But a level playing field for the tax regime, more parity for venture capital investments with public securities is high on our wishlist.
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As always, I relied on a diverse set of sources which you can find below:
Private Equity Review – 2016 (KPMG, 2017): https://home.kpmg.com/in/en/home/insights/2017/02/pov-private-equity-report.html
$4.7 Billion Invested in Indian Startups in Q1 2017, Double than Last Year. StartupIndia Booming (Amit Kumar, bizztor, 2017): https://bizztor.com/startup-india-funding-2017/
E-commerce consolidation to give way to mature growth in sector
(Alnoor Peermohamed & Raghu Krishnan, Business Standard, 2017): http://wap.business-standard.com/article/companies/e-commerce-consolidation-to-give-way-to-mature-growth-in-sector-117051101080_1.html
The Schools That Graduate The Most Billion-Dollar Founders (Susan Adams, Forbes, 2017): https://www.forbes.com/sites/susanadams/2017/01/27/the-schools-that-graduate-the-most-billion-dollar-startup-founders/
The best cities to startup in India (Varsha Roysam, yourstory, 2016): https://yourstory.com/2016/10/best-indian-cities-startp/
This is what Keeps Blume Ventures’ Sanjay Nath Awake At Night (Regina Mihindukulasuriya, BWDISRUPT, 2017):
http://bwdisrupt.businessworld.in/article/This-is-what-Keeps-Blume-Ventures-Sanjay-Nath-Awake-At-Night/04-02-2017-112453/
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