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.

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Key Funding Related Announcements in 2012

In terms of categories, B2B definitely regained flavor, but important to mention some of the key investments categories in 2012.

- Gaming category:

-Online Taxi/Cab booking got a lift.

- Rise of Bollywood!

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.]

2012 Recap/ 2013 Trends
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