Jan 22 2015 : The Times of India (Delhi)
India among world's top 3 VC destinations
Shilpa Phadnis
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India received the third highest venture capital funding ($4.6 billion) in the world in 2014, after US ($58.9 billion) and China ($8.9 billion). Bengaluru was fifth in a list of cities globally, an indication of the growing vibrancy of its startup ecosystem. San Francisco, one of three American cities in the top 5, led the list with $13 billion of VC investments, followed by Beijing ($6.4 billion), New York ($5.7 billion), Palo Alto ($3.2 billion) and Bengaluru ($2.6 billion). The list has been put together by Crunchbase, a global startup ecosystem database.Ravi Gururaj, chairman of the Nasscom Product Council, said India enjoyed a record crop of VC investments in the second half of 2014 and the wave was showing no sign of slowing down.
“This was kicked off by the historic election results which boosted investor confidence tremendously ,“ Gururaj said. “Additionally, private equity investors worldwide, particularly those that missed out on the meteoric rise in Chinese startup valuations, flocked to high performing Indian consumer startups determined not to miss out on a fast ride on the `India Startup Express'.“ Sanjeev Aggarwal, cofounder of Helion Ven ture Partners, said Bengaluru's lead position was because of its ability to attract tech talent. “The virtuous cycle kicked in with Infosys and Wipro, followed by global captives coming in large numbers.Engineers employed with companies like Google and Yahoo wanted to experiment with new ideas, and that has spawned a startup culture. Mobile apps and cloud have reduced entry barriers to build companies,“ he said. CrunchBase does not give a breakup of the investments in each city. In Bengaluru's case, a significant portion of the $2.6 billion would likely be on account of Flipkart's two rounds of funding that happened last year. The e-commerce company received an estimated $1.7 billion.
Parag Dhol, managing director of Inventus Advisors India, believes Bengaluru's startup ecosystem is beginning to have a multiplier effect. “You have an ecosystem where companies have gone public, there are good product startups, and new age entrepreneurs are turning into angels. In that sense, success begets success.Venture capitalists are looking at India with a fresh set of eyes,“ he saidAggarwal noted that capital was going particularly to the leaders who are building companies in large underserved markets, companies like Flipkart, Snapdeal and Ola. “Investors are paying a leadership premium,“ he said. Japanese internet giant Softbank invested $627 million in Snapdeal and $210 million in Ola Cabs last year.
“This was kicked off by the historic election results which boosted investor confidence tremendously ,“ Gururaj said. “Additionally, private equity investors worldwide, particularly those that missed out on the meteoric rise in Chinese startup valuations, flocked to high performing Indian consumer startups determined not to miss out on a fast ride on the `India Startup Express'.“ Sanjeev Aggarwal, cofounder of Helion Ven ture Partners, said Bengaluru's lead position was because of its ability to attract tech talent. “The virtuous cycle kicked in with Infosys and Wipro, followed by global captives coming in large numbers.Engineers employed with companies like Google and Yahoo wanted to experiment with new ideas, and that has spawned a startup culture. Mobile apps and cloud have reduced entry barriers to build companies,“ he said. CrunchBase does not give a breakup of the investments in each city. In Bengaluru's case, a significant portion of the $2.6 billion would likely be on account of Flipkart's two rounds of funding that happened last year. The e-commerce company received an estimated $1.7 billion.
Parag Dhol, managing director of Inventus Advisors India, believes Bengaluru's startup ecosystem is beginning to have a multiplier effect. “You have an ecosystem where companies have gone public, there are good product startups, and new age entrepreneurs are turning into angels. In that sense, success begets success.Venture capitalists are looking at India with a fresh set of eyes,“ he saidAggarwal noted that capital was going particularly to the leaders who are building companies in large underserved markets, companies like Flipkart, Snapdeal and Ola. “Investors are paying a leadership premium,“ he said. Japanese internet giant Softbank invested $627 million in Snapdeal and $210 million in Ola Cabs last year.
