03Feb / 2017
This year, we kicked things off with the LetsIgnite Roadshow: a 7 city event with angel workshops, pitch sessions and networking which ran between 19th October 2016 and 19th December 2016. The roadshows were designed to provide an investor focused arena, engage angel communities from both Tier 1 and Tier 2 cities and provide an opportunity to interact with top local startups.
We visited Bangalore, Gurgaon, Hyderabad, Jaipur, Kanpur, Mumbai and Pune. We met 260+ investors and learned a lot about Indian Angel Ecosystem. To share some of our learnings we put together a data report from a survey we passed to investors in each city we visited. Here are their responses:
Here is a breakdown of the graphs with descriptions and numbers:
Is your primary deal flow from the city you live in?
This chart depicts that 58.5% of investors get their primary deal flow from outside their home city. 41.5% get their primary deal flow from within their city. It is interesting to see stronger deal flow from outside the city, a possible outcome of the rise of digital investment platforms, local angel networks and an increased number of hyperlocal startups.
How many of your portfolio companies have given you an Exit?
Not too surprising but 80.6% reported that none of their portfolio companies had given them an exit. This is a good indicator of India’s large ‘young’ angel investor base. 14% reported 1-3 exits, 1.8% reported 4-5 exits and 3.6% reported greater than 5 exits.
As of January 2017, how many companies have you invested in?
This graph shows that the hottest category is investors who have invested in 1- 5 companies (58.93%) as of January 2017. This is followed by 16.07% with investments in 0 companies, 10.71% with investments in 6-10 companies, 8.93% with investments in 11- 15 companies and 5.36% with investments in more than 16 companies.
Do you prefer to lead or co-invest?
This infographic shows that 50% of the investors prefer to co-invest, 32.14% of the investors lead once in awhile, 7.14% lead greater than 25% of their rounds, 7.14% lead greater than 50% of their rounds and 3.57% lead all deals.
How many years have you been an Angel Investor?
The data shows that 14.29% have been angel investors for less than a year, 30.36% have been angel investors for one year, 21.43% have been angel investors for 2 years. There has been a steady rise in the number of Indian angel investors and this data clearly reflects that. This is followed by 8.93% being angel investors for 3 years, 7.14% being angel investors for 4 years, 10.71% being angel investors for 5 years and 7.15% being angel investors for more than 5 years.
What are the top 3 under-exposed sectors that you are interested in?
Fintech and Health Tech come in as the number one pick for under-exposed sectors with 19.64%. Do note that Fintech is one of the most oversupplied sectors in the market; it is interesting to see that investors consider it an under-exposed sector. Agri-Tech follows closely with 17.86%, definitely a sector that has seen traction in the last few years. In 3rd place we have Ed Tech with 12.50%, in 4th place is Food Tech with 10.71%, in 5th place we have tie between AI and IoT with 8.93%, Big Data and Saas share 6th place with 7.14%, Automation, Energy and Robotics come 7th with 5.36% and coming in 8th place with 3.57% we have B2B, Bio Tech, Logistics and VR.
Which statement best describes your investment thesis?
For the most part, investors agree to invest only in sectors/problems that they have a deep understanding of (32.14%). This is followed closely by a preference for a good team (28.57%), a common and strategic trend because a strong team increases the chances of being a successful startup. Other important factors considered were market reading (19.64%), the co-investors in the startup (8.93%) and investment in startups where there is prior work experience(7.14%)
What are the top challenges the Indian ecosystem faces today?
The three biggest pain points identified by the surveyed angel investors were a lack of mentor pool for startups (25%), lack of quality startups and entrepreneurs (23.21%) and lack of established startups and entrepreneurs (21.43%). This was followed by a lack of tech talent in the local ecosystem where portfolio companies have to move to cities (16.07%), a lack of support from state government (14.29%) and a lack of investors (12.50%). This question allowed for multiple answers which is why the total is greater than 100%. The challenges picked by investors display the growing pains of a young and rapidly expanding startup ecosystem.
Hope you found these insight snippets interesting. If you’re an Angel investor don’t forget to block 16th and 17th March 2017 on your calendar. We’re back with our 3rd annual LetsIgnite, India’s largest Angel investor conference. 15 of India’s hottest startups will be pitching with their Lead investors at the event chosen among about 1200 startups who applied after a 5 step curation process driven.
This year the theme is ‘Exits’ and we have closed-door roundtables with Stock Exchanges, prolific angels and corporates around Exits. There are also sector-specific panels like Blockchain, Real Estate Tech and India-2. Click here to learn more and get your passes!