Venture Intelligence study also highlights rising dominance of Homegrown VC funds in Early Stage funding
Only 1 in 4 startups that attract seed funding manage to raise follow-on funding in the form of a “Series A” round, a new report from Venture Intelligence, India’s longest serving data platform on Private Company Financials and Transactions, shows. Out of the about 3,250 startups that had raised seed funding between 2015-2023, only 25% (i.e., 821 companies) managed to raise a Series A round (typically the first round of institutional Venture Capital funding), the study titled Series A Landscape Report found.
Once a startup attracts a Series A round however, its success ratio in raising subsequent rounds of capital, improves quite significantly. For instance, 41% of the companies that raised a Series A during the study period, succeeded in raising a Series B round. And, of the startups that attracted a Series B round, 45% succeeded in obtaining a Series C round. Of the Series C funded companies, 47% managed to raise rounds that were Series D and beyond. (Note: The Venture Intelligence study provides an 18 month window for a company to raise the subsequent round.)
Series A Investments
In keeping with the overall funding slowdown in 2023, the number of startups that attracted Series A investments during the year (127) fell 45% compared to 2022 (which saw 232 startups raise Series A investments) and 23% below the average of 166 deals recorded in the recent 8 years.
Most Active Investors
The Series A Landscape Report also shows how domestic capital-led investors, including Blume Ventures, InfoEdge Ventures, IndiaQuotient, 3ONE4 Capital and IvyCap Ventures, are fast replacing Silicon Valley-linked funds in the pecking order of most active Venture Capital investors.
Blume Ventures, which was the 2nd Most Active Seed VC investor in the last 5 years (after Sequoia Capital India / Peak XV Partners), emerged as the Most Active Seed VC investor in 2023. Blume, which was the 2nd Most Active Series A stage investor in 2023 (behind Accel India), emerged as The Most Active Series A Investor in the country in the first half of 2024, according to Venture Intelligence data
Series A Pipeline Creators
Another highlight of the Venture Intelligence study is the list of “Series A Pipeline Creators” – investors that make seed investments in startups that are relatively more successful in raising the follow-on Series A round. The list, while topped by Peak XV Partners, has strong representation from homegrown seed investors including Blume Ventures, Axilor Ventures, India Quotient, Kae Capital and 3ONE4 Capital.
Peak XV Partners had backed 48 startups in the seed round that then went on to raise Series A rounds during the five year period (between 2019 and 2023) analyzed by Venture Intelligence. Peak XV Partners was followed by Blume Ventures that seed funded 35 startups that then went on to successfully raise a Series A round. They were followed by Accel India (26 startups). Specialist Seed VC firms like Axilor Ventures (21 startups), India Quotient (20) and Kae Capital (20) completed the Top 5 list.
Visit https://www.ventureintelligence.com/seriesareport.htm to download the full Report, rich with additional data, graphs and charts.
