The burgeoning startup environment in India is something to cheer about during global economic slowdown.
Venture funding, leadership, inflation, and lay offs have taken a hit in startups globally since last year amidst various economic challenges. India supports the growth of startups due to availability of low-cost skilled labor, an important aspect of building a business, as well as increasing funding from national and international firms. The recent reports by ASK Private Wealth Hurun India Future Unicorn Index 2024, the contribution of venture capitalists (VC) in growth of startup is again highlighted. In this article, we will discuss about the top investor for India's start-up ecosystem.
Building a business from scratch is a tough task. Gathering the required funding is one of the biggest challenges for any new company. Undoubtedly, there are brilliant minds with great ideas, however, implementation becomes a challenge when there is no sufficient funding. Here comes the contribution of venture capitalists. Understanding the potential of the owner and the idea, VCs consider funding.
Venture capitalists are high-net-worth people or institutional investors get some percentage of the company in return for their given capital. Rather than business loan, many founders prefer to go for VC funding due to more connections and without worries about debt. Thus, investment from VCs is one of the best practices in start-up ecosystem. Some of the examples of successful start-ups that initially raised fundings from VCs are Facebook, Uber, Airbnb, Spotify, Tesla, and so on.
Recently, ASK Private Wealth Hurun India Future Unicorn Index 2024 was published showcasing the contribution of VCs in growing Indian startup ecosystem. In this survey, the VC firm Peak XV Partners (earlier known as Sequoia Capital India and SEA) has emerged as the top investor for Indian startups. “The firm made investments in a whopping 47 potential unicorns (start-ups founded after the year 2000 with a valuation of US$1bn) this year,” according to the report.
Some of the unicorns are CleverTap, Turtlemint, Classplus, and so on.
Hurun Research Institute has divided the start-ups as “Unicorns (start-ups founded after the year 2000 with a valuation of US$1bn), Gazelles (start-ups that are most likely to go Unicorn in the next three years), and Cheetahs (start-ups that could go Unicorn in the next five years).”
The Research discovered 152 Indian future unicorns from 31 cities, set up around 2015. These ventures are mostly into software selling and services. Among these, around 18% selling physical products. The report further said that “44% are selling to businesses, while 56% are consumer-facing.”
Apart from Peak XV, Accel holds the second position while Tiger Global is at third position. Trifecta and Blume Ventures are in 4th and 5th position in the list.
Accel has invested in 25 companies which are in the path of becoming the next generation of unicorns including Money View, Stanza Living, and Ninjacart. Tiger Global Management has invested in 21 Gazelles and Cheetahs including Captain Fresh, Ather Energy, and Classplus.
India, currently has 30 future Unicorns in the FinTech sector, with consumer lending emerging as the biggest subcategory.
The FinTech start-ups listed in the ASK Private Wealth Hurun India Future Unicorn Index 2024 have collectively raised an investment of US$5.7bn.
