Bengaluru: IIT Madras publishes the 2016 India Venture Capital and Private Equity Report on startups at the TiE-IITM thought leadership forum held during TiECON Chennai. The 2016 report focuses on the trends in startup ecosystem in India, which has been very vibrant in recent years with a total venture investment of Rs. 1, 11,700 crores approximately in startups during the period 2014-15.
Commenting on the published report, Prof. Bhaskar Ramamurthi, Director, IIT Madras asserts, “This report is the eighth in the series of India Venture Capital and Private Equity Reports from IIT Madras. Appropriately, the latest report focuses on Startups. Startups have an important role to play in the modern innovation economy. The national government has recognized this and startups have emerged as a focus area for policy making now. This report provides an interesting commentary on the trends in startups and the startup eco-system of our country since 2005. The findings of the report would help the startup founders, policy makers, and investors in making informed decisions”.
The report talks about the incubation facilities and the fundamental role of universities in creating ventures apart from traditional teaching, research, & industrial collaborations. Large number of incubators are supporting the technology sector and the industry has witnessed a tremendous upsurge in number of incubators in Tier I cities after 2010. The report also suggests that incubation thesis varies between incubators; while the average number of incubatees is around 36 in universities, it is only 13 in the case of private non-universities. This indicates that different type of incubators could have different investment thesis.
Further, the report speaks about the startup accelerators like 500 start-ups, Kyron, TiE Bootcamp and their associations with the large startups, where accelerators are able to guide more number of startups than incubators. Also, the age of startups to receive angel funding has dramatically decreased due to rise in angel networks and growth of angel investment in the country.
The six Tier-I cities of India received the largest chunk of investment of Rs.661.29 billion, which proves that venture funding is focused on Tier-I cities. Also, investors trust on developing a proprietary deal flow network, where 37 percent of deal flow happens through personal contact. The report mentions that 92 percent of the investments made by ‘The Chennai Angels’ were sourced through, or had a reference from angel investors or members of the angel network.