This year will be remembered as a year when the angels came down to earth and spread some love in this part of the globe. India witnessed a surge in angel round funding in 2012 and the euphoria was largely driven by the by entry of 500startups to India and the rise of homegrown angels.
In over 52 deals, venture capital firms invested about $200 million during the three months ending September 2012. This was a drop of 22 % over the same quarter last year. But the good news is that angels are cutting smaller cheques at a quicker pace.
If every VC in town was chasing his e-commerce fix last year, most of them have sobered down this year. The flavor of the season is to invest in business to business companies than on companies that focus on the mass consumer.
Rise of Early stage funding in India
The number of early stage investments made by venture capitalists in India has increased by ~50% from 99 deals worth a total of $334 million in 2010 to 149 deals worth $397 in November 2012. That is, more investors are doing smaller deals.
Since a lot of early stage deals go unreported, we expect the actual numbers to be much higher.
Circle of Life.
On the ground, one can certainly say that life has come a full circle. That is, entrepreneurs have started investing in startups and that is leading to a significant growth in early stage investing in India. Individuals with high net worth are also exploring early stage opportunities in India. They are expected to take a more targeted approach in 2013.
Key Funding Related Announcements in 2012
- Flipkart raised $150mn funding
- Yebhi raised $20mn funding
- Investors like Nexus raised India fund (committed capital of $270mn) and Matrix announced its seed stage investing program.
- Jungle ventures announced its Asia fund.
- Rise of online music : Dhingana raised $7mn.
- Video ad networks raised funding: VuClip raised $13mn and Vdopia raised $3.4mn.
- PoS payment startup, EZETap raised funding from Peter Thiel, Chamath Palihapitiya and Yammer’s David Sacks.
- Retargeting network, Vizury raised funding.
- PoS retail product, Capillary raised $15.5mn
- LBS startup, AdNear raised funding.
- Apartment oriented network, Commonfloor raised funding.
- Online social platform, LimeRoad raised $5mn funding
- Mettl raised funding
- Komli raised $39mn funding.
- Freshdesk raised funding from Tiger Global.
- Quikr raised funding from Warbug Pincus
- Mohandas Pai invested in 4 startups
- Online grocery store, BigBasker raised funding
- Manthan Systems raised $15mn
- Nivio raised $21mn funding from Videocon and and AEC Partner.
- Myntra Secures $20mn funding
- Freecharge secures $4mn from Sequoia Capital.
- Online gifting platform, Badhai raised $200K
In terms of categories, B2B definitely regained flavor, but important to mention some of the key investments categories in 2012.
- Gaming category:
- Blume and Mumbai Angels invested in Rolocule Games.
- MadRatGames secured funding from Blume and First Light Ventures.
- Gamiana raised funding from IAN
- Games2Win secured funding from Nirvana Ventures
-Online Taxi/Cab booking got a lift.
- Shared Taxi Service, SharedCab secures funding from Anupam Mittal, Kae Capital, Blume Ventures and Rajesh Sawhney
- Call Taxi Service, Bookmycab secures funding from YourNest Angel Fund and Mumbai Angels
- TaxiforSure raised funding from Accel and others.
- Olacabs secures Series A round from Tiger Global
- Rise of Bollywood!
- Accel Partners announced investment of $5mn in Sachin Tendulkar’s Universal Collectabillia
- Cricketers like Zaheer Khan took a plunge in ecommerce investment (Shersingh)
- A R Rahman and Shekhar Kapur’s Qyuki raised funding from Cisco.
- Actor Salman Khan took a stake in Yatra.
2012: Series A gets tougher
Raising Series A onwards has gone tougher, as investors have taken a cautious approach and are focused more on revenue driven metrics than traction alone.
As far as raising angel round is concerned, there is no better time to do it than now. But extend your runway as much as possible.
[This article is part of our 2012 Recap series, and is supported by CCAvenue.]
CCAvenue is India’s largest payment gateway solution powering thousands of eMerchants with real time, multi-currency, multiple payment options online payment processing services. The solution is powered by proprietary technology that integrates transaction-processing, advance shopping cart, auction payment collection facility, mobile page, risk assessment and fraud control, smart analytical dashboards, financial reporting and order tracking and many more features. CCAvenue