14Oct / 2016

 

In this post, LV does the math to demystify the current Indian Angel Ecosystem. We’ve gathered funding data from our platform with over 12,000 startups and 2500 investors to provide insights on investment trends, location based activity and specific comparisons between 2015 and 2016 market shifts.


In an ever changing market and with dramatic shifts getting the ecosystem pulse and understanding trends can be a little tricky so we’ve approached it with a few questions to outline key data insights.

Who is the Indian Angel Investor?

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The Indian Angel is a diverse investor; a senior executive at an MNC, the second generation of family businesses, a Bay area IT professional and a serial entrepreneur. The two biggest segments are investment professionals and entrepreneurs. It shouldn’t be surprising that people from the industry are leading with the highest investment activity.

Digging a little deeper, if we compare data by experience, you’ll notice that there is a large and growing number of new investors in the arena. (look below). Big picture thinking = increased investment leads to increased capital spending which leads to increased demand and eventually GROWTH. For startups we’re looking at better access to funding, mentorship and networks. For angels, in India, it will strengthen syndicate investing and give way to stronger home-grown angel network.




 

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Where do Angels Angel the most?

It gets interesting when you segment investors by location. While the investor base in startup hubs like Delhi, Bengaluru, Mumbai, Chennai and Hyderabad has been consistently rising, we noticed growth in the investor base from towns like Guwahati, Kanpur, Pune, Raipur, Visakhapatnam, Agra, Jaipur and, Chandigarh. In fact, close to 13% of our investor base is from Tier 2 and 3 cities.



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What do Indian Angels look for?

 

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Here are some trends we’ve spotted.

Sector Trends


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The E-commerce sector still remains one of the biggest startup sectors with the most deals closed. However it’s worth noticing that In the last two years we’ve seen a dramatic increase in healthcare startups and marketplaces. Data also suggests that 2016 has had a higher number of B2B companies on the rise.

 

Location trends

 

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In 2015 we saw Bengaluru lead with the highest number of active startups which in 2016 changed to New Delhi and Gurgaon who claimed the top spot. Tier 2 cities have also seen a significant rise in the number of startups with Pune recording the highest count.

 

Ask vs Valuation Trend

 

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The Q4 of 2015 wasn’t an inspiring time for the Indian investment ecosystem. We saw a huge pullback in funding and scepticism in valuation. Investors were unusually open to a higher valuation and less keen on a number focused approach. The table illustrates how the gap between valuation and asks for both B2C and B2B have evolved since 2015.  

 

Conclusion

Being the third largest and fastest growing start-up ecosystem in the world, India is poised to take over. The angel community will play a crucial role in promoting this growth and enabling entrepreneurs across Tier 1, Tier 2 and Tier 3 cities. So as we prepare to embark on the LetsIgnite Roadshow we wanted to put the angel ecosystem in the spotlight and look back on the trends and shifts over the last two years and possibly forecast what to expect for the next quarter.

The LetsIgnite Roadshow; an all-India event that will host angel workshops with startup pitch sessions across 9 Indian cities between 19 Oct 2016 and 10 Jan 2017. There will be 200+ investors participating providing insights into startup and angel ecosystems from both Tier 1 and Tier 2 cities. Then we’re bringing India’s largest Angel conference, LetsIgnite, back on March 9 - 10 2017 with an exciting theme we’ll be revealing soon. LetsIgnite 2015, 2016 and our maiden LetsIgnite in Singapore have been amazing experiences and we’re excited to be part of such a happening startup ecosystem. Visit www.letsignite.in for more information.

 

Let me know if you have any questions at amogh.lux@letsventure.com