Evalueserve has come out with a report on Indian early stage VCs. It points out that the VC activity in India is increasing and soon, there will be as many as 44 early stage VC firms operating in India, with around $4.4b to invest! While my own estimates are on a lower side, whats undeniable is that more money than ever before will be available to early stage companies. I guess this is good news for entrepreneurs.
The report also raises some concerns, notably amongst them:
1. Lack of sales, marketing and business development skills amongst startup teams
2. Narrow investment theses of the VCs targeting Indian market
The real metric of success is how many of these VCs make money in the Indian market, so hold on to the toasts just a wee bit longer…
- Promoters or Entrepreneurs – A choice for Private Equity players - August 3, 2019
- Startup Marathon Mindset - March 25, 2019
- What’s your Customer Culture? - March 4, 2019
What I have heard about “Gridstone Research” it seems to be a US-based startup as is Riya.com or even Zoho (represented as an Indian startup by Business 2.0 a couple of issues back). The India Operations of Gridstone is a wholly-owned subsidary of the parent company incorporated in the US.
I believe that $100-500K could be helpful and is huge money it is an Indian consumer-centric Web startup.
-Animesh
I wish the report also touched upon the type and quality of startup deals.
For instance the biggest startup funding that has happened recently is the funding of Gridstone Research ( an equity research outfit founded by Basab Pradhan led ex-Infoscions ) by Hedge Fund Maverick Capital and VC firm Charles River Ventures. The actual amount funded has not yet been disclosed but Basab has in an interview disclosed that their 5 years of working capital has been fully covered by VC money.
Currently they put target strength of its research team in Mumbai, India at 750 people. Just the 5 year salary of this team together with lease rentals for the property ( Mindspace at Malad ) and equipments, cost of live feeds from multiple sources should add up to quite a packet. And this is just a couple of quarters into real operation.
This shows an increasing risk appettite by the VCs for big ticket deals and better packaging by entrepreneurs. This is a sure sign of coming of age of Indian entrepreneurs and the significantly improved VC outlook towards them.
This would leave the really smaller startups ( $ 100 k – $ 500 k ) at the mercy of Angels / Seed stage VCs.
Ramesh,
I don’t think concern no. 1 is the VCs job. I believe that for a startup to get the VCs attention, it needs to be attractive enough. A working Technology is important enough, more important than anything else, but the need to get enough consumers or customers to beta-test or buy your product through proper marketing and business development efforts go a long way in VCs to see the truth of projected sales figures. When startups are out in the streets to seek out VCs, having a credible customer/consumer base lends a lot of credibility to the technology that is there on offer. So, it really really helps if one of the founding team is excellent at Business Development.
– Animesh
Hi Alok
I am surprised at concern no. 1. Why should startup teams be expected to have any of these skills? They should be focusing on technology and building pathbreaking products or developing need-of-the-hour services.
Isn’t it the job of the VC to take things forward by bringing in people with the skills mentioned? As someone who has been an entrepreneur and currently at the other end of the table, you should be able to shed more light so that budding startup teams know what gaps to fill.
This is a good report. I think Band of Angels should host it on their website as well.