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Investment have substantially increased into startup ecosystem

The Indian investment ecosystem has changed dramatically in recent years, notably after the commencement of the COVID-19 epidemic in early 2020. Even though large-scale disruptions hindered investment at the start of the global crisis, the investor community not only recovered but evolved to adapt and thrive. In reality, 26 unicorns have emerged in Indias startup ecosystem, with funding totaling USD 16.9 billion. With the ongoing pandemic causing a paradigm shift in the investment ecosystem, its critical to examine the changes to forecast what we can expect from future large-scale catastrophes. So, here are some investment ecosystem trends to keep an eye on. Data from an online survey completed by 103 family offices and extremely high net worth individuals (UHNIs) in India, as well as interviews with numerous investors, were used to construct the report, which was conducted between July and October 2021. According to the report, direct startup investments accounted for 47 percent of their private market portfolio, while 32 percent went to venture capital and private equity funds and 11 percent to venture debt funds, indicating that larger cheque writers are eyeing a direct participation in a startups cap table. By the Indian governments goal of being self-sufficient, the forthcoming Budget is expected to stimulate local manufacturing across all sectors. The Union Budget will be paperless for the first time in Indias independent history this year. Budget papers, such as the Union Budget and Economic Survey, are not expected to be printed; instead, the government would issue soft versions of these documents.

Due to regular rounds of severe competition, many Indian startups have pushed expansion at all costs over the last five years, resulting in unusually significant losses for their size. Covid-19 sparked a change of heart. For example, entrepreneurs of transaction-driven firms (e-commerce, online meal delivery, and so on) in India realised that the days of losing money on every order were over and worked hard to build sustainable unit economics - and design a route to profitability. Trimming costs, eliminating discounting, and unlocking new income levers were all part of the plan. This mindset, which arose as a result of the pandemic, will result in leaner, more competitive businesses that are more likely to survive.

As growth accelerates across categories and an increasing number of enterprises reach scale, the year 2021 will mark the start of the IPO age for our ecosystem. Once new legislation allowing Indian firms to list directly on international exchanges are established, this trend will accelerate dramatically. As founders continue to create for Bharat, we will see an acceleration of unique Indian company models. The unrelenting growth of smartphone penetration in small towns and rural India is altering the game, resulting in products designed exclusively for tier 2-4 cities and rural India consumers. Early-stage investors are currently navigating market trends and gaining a better grasp of the pandemics impact in India and globally, which may eventually influence their investment selections. The background, skillsets, and vision of the founding team, as well as a unique business strategy, are the most critical factors that early-stage investors consider when making investment selections. Products/services that cater to limited markets, as well as a lack of product-market fit, are the largest red flags.


blog

Investment have substantially increased into startup ecosystem

The Indian investment ecosystem has changed dramatically in recent years, notably after the commencement of the COVID-19 epidemic in early 2020. Even though large-scale disruptions hindered investment at the start of the global crisis, the investor community not only recovered but evolved to adapt and thrive. In reality, 26 unicorns have emerged in Indias startup ecosystem, with funding totaling USD 16.9 billion. With the ongoing pandemic causing a paradigm shift in the investment ecosystem, its critical to examine the changes to forecast what we can expect from future large-scale catastrophes. So, here are some investment ecosystem trends to keep an eye on. Data from an online survey completed by 103 family offices and extremely high net worth individuals (UHNIs) in India, as well as interviews with numerous investors, were used to construct the report, which was conducted between July and October 2021. According to the report, direct startup investments accounted for 47 percent of their private market portfolio, while 32 percent went to venture capital and private equity funds and 11 percent to venture debt funds, indicating that larger cheque writers are eyeing a direct participation in a startups cap table. By the Indian governments goal of being self-sufficient, the forthcoming Budget is expected to stimulate local manufacturing across all sectors. The Union Budget will be paperless for the first time in Indias independent history this year. Budget papers, such as the Union Budget and Economic Survey, are not expected to be printed; instead, the government would issue soft versions of these documents.

Due to regular rounds of severe competition, many Indian startups have pushed expansion at all costs over the last five years, resulting in unusually significant losses for their size. Covid-19 sparked a change of heart. For example, entrepreneurs of transaction-driven firms (e-commerce, online meal delivery, and so on) in India realised that the days of losing money on every order were over and worked hard to build sustainable unit economics - and design a route to profitability. Trimming costs, eliminating discounting, and unlocking new income levers were all part of the plan. This mindset, which arose as a result of the pandemic, will result in leaner, more competitive businesses that are more likely to survive.

As growth accelerates across categories and an increasing number of enterprises reach scale, the year 2021 will mark the start of the IPO age for our ecosystem. Once new legislation allowing Indian firms to list directly on international exchanges are established, this trend will accelerate dramatically. As founders continue to create for Bharat, we will see an acceleration of unique Indian company models. The unrelenting growth of smartphone penetration in small towns and rural India is altering the game, resulting in products designed exclusively for tier 2-4 cities and rural India consumers. Early-stage investors are currently navigating market trends and gaining a better grasp of the pandemics impact in India and globally, which may eventually influence their investment selections. The background, skillsets, and vision of the founding team, as well as a unique business strategy, are the most critical factors that early-stage investors consider when making investment selections. Products/services that cater to limited markets, as well as a lack of product-market fit, are the largest red flags.