The Venture Intelligence Blog

On the back of chilling news of mass layoffs at home grown E-Commerce Unicorn Snapdeal and a “reboot” at homestays aggregator Stayzilla, Venture Capital investment activity hit a five month low in February 2017, down for a third month in a row. Venture Intelligence tracked 32 VC investments* worth $241 million in February. The activity or number of investments were 20% lower compared to the same period last year as well immediate previous month and 36% lower than the average activity levels witnessed in the Oct-Dec quarter. (*Seed to Series D round investments of up to $20-M in companies less than 10 years old. The monthly analysis includes investments of over $20-M as well in tech startups that are less than 10 years old.) Except for a minor uptick in the Series B category, investment volumes were either flat or lower across all other rounds. The largest VC investment in the period was the $54 million raised by Cartrade.com led by existing investor Temasek – the same com...

Prajakt Raut of Applyfi feels more startups need to ask for INR 50 lakh cheques versus wasting precious time trying to raise INR 3 Cr in their first angel round. For investors to be comfortable investing upwards of (INR 3 Cr) as a first cheque in a startup would need the startup to have some amount of organisational maturity and some early-evidence that the concept, market opportunity, value proposition, pricing, business model, marketing programme, sales programme, product/service delivery, etc. are tested and that the results appear to be encouraging. However, most startups tend to seek this larger investment even when they are not yet fully ready with the evidence. Such startups will find it much easier and much faster to close a $74.3K (INR 50 Lakhs) round, which in most cases will be adequate to build a foundation that will allow them to raise a much larger next round. Why Do Most Startups Seek Larger Round For First Round Investing? Perhaps because that’s the perceived ‘...

A BusinessLine article by TE Raja Simhan uses Venture Intelligence data to track most active angel investors in the last 5 yrs (since Jan-2011) and other trends. Most Active Angel Investors 1. Indian Angel Network (61) 2. Mumbai Angels (52) 3. Rajan Anandan (51) 4. Anupam Mittal (38) 5. Mohandas Pai (34 Including investments by Aarin Capital) Key Trends: 1. Since 2006-07, due to the efforts of early angel networks such as IAN and Mumbai Angels, the culture of seed funding has taken strong and steady roots among high net worth individuals (HNIs) in India including first-generation entrepreneurs who, upon exiting their businesses, have been allocating a significant share of their capital for investments in start-ups - e.g. Ronnie Screwvala of UTV and Rakesh Malhotra of Luminous Power Technologies. 2. The growth of angel investments in India has not been affected by the decline in public markets in 2008 and by the mood swings of Silicon Valley VCs. You can catch our a...

In an Economic Times article , Anumeha Chaturvedi uses Venture Intelligence data to display ramping up of investor interest in Fashion startups. Six investments have been made in the space so far this year, according to data shared by Venture Intelligence with ET, up from four in 2015 and one in 2014. The value of investments made in fashion companies stood at $38 million in 2015, up from $21 million in 2014. Venture Intelligence is India's longest serving provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India.  Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.

While Venture Capital investments* have been steadily falling from the peak registered in Aug-2015, investments by Angel Networks and Super Angels have continued to tick up driven by increasing activity of new entrants like former Infosys CFO Mohandas Pai & former Tata Group Chairman Ratan Tata. (Even the minor slowdown in the last couple of months by the professional angels, has been compensated for by new angel investors – typically working professionals and Entrepreneur CEOs making their first 1-3 investments – stepping up their activity.)  (*Institutional Investments of <$20 M in Early & Growth Stage Companies) Venture Intelligence dug into its angel investments database  to study activity across the last 24 months (across 300+ deals) to identify the list of most active investors. Mohandas Pai – who invests both directly as well as via Aarin Capital, his shared Family Office with the Manipal Group’s Ranjan Pai – topped the list with as many as 31...

In an article titled "The Curious Case of Entrepreneur-Angels" , Santosh Sreedhar of Avalon Consulting and Neeraj Gupta of Excubator explore whether the founders Flipkart, SnapDeal, CommonFloor, etc. should be turning Angel Investors "even as their core venture has still not turned around profits". Extracts: However, there are a few who believe the trend should not be encouraged as it distracts the entrepreneur from the core business, which in many cases is still not profitable. They feel that even though some of these entrepreneurs have “made money”, many are still to prove their capability to “build businesses”. As one leading VC put it - “Its not a business if its not profitable”. They argue that such investments are bound to distract the entrepreneurs from focusing on turning their core business profitable. Putting a clause in the term sheets restricting entrepreneur investments in outside ventures is not a norm in India or elsewhere. However, disclosu...

With enthusiasm for angel investments in India at an all time high, Venture Intelligence is happy to announce a new feature to its Angel Investments database: the ability to search listings of companies seeking angel / seed capital in your city. Integrating company and investor profiles from the world’s best known angel deals platform - AngelList - the Venture Intelligence Angel Investments database allows its users to further search and filter listings by company name, city and amount of funding sought. To look up companies seeking angel capital in your city right away, just login to the Venture Intelligence PE/VC Deal Database . Don’t have a login? Contact Us for a demo.

With  Tiger Global  and other global investors straying into VC territory in the hunt for the next set of Unicorns, the (  Lee Fix(el)ated  ? ) Indian VC firms - whose fund size mathematics earlier disallowed them from "writing cheques" of less than $1-2 million - have been actively foraying into seed funding zone competing and often co-investing with angels and seed funds. But what type of investor should entrepreneurs prefer for their seed round - if they have the luxury of a choice between angels, seed funds and VC firms? Mukund Mohan, the former head of Microsoft Ventures, recommends going with angels and seed firms. Extracts from his post titled " Does raising institutional money at the seed stage help or hurt? ": If you are looking to raise money and you have an interested later-stage VC investor willing to put money in your company, by all means you should take it. Assuming they will invest later is a big leap of faith. There are, like most things in th...

Haresh Chawla, an angel investor in Housing.com, has a list of do's and don'ts for fellow angel investors in Founding Fuel . Extracts: 2. Don’t do it for the money. Most angel portfolios won’t beat returns on Indian small-caps and mid-caps. Plus you’ll save a mighty load of your time. So learn to play the guitar if you are bored. 3. If you still persist, choose a style or a combination from here: Spray and Pray: Put in Rs 5-25 lakh—do tens of deals. Eight angels in a start-up means you are hardly going to have a say, or the inclination to spend time. But sure you’ll meet interesting people, and be covered in business newspapers. Sometimes you’ll also be mentioned in the same breath as *trophy* investors. Consortium: A new structure that has cropped up lately—everyone can be an Angel now! One guy fronts 20-30 of you investors. It works. Downside? The front is usually too busy monitoring than mentoring. Oh, and you’ll miss out on the PR as well. The Real Deal: You’re ready...

Mukund Mohan of Microsoft Ventures has a numbers-based post on the probability of funding and the equity dilutions Indian entrepreneurs face depending on whether they go to an Accelerator first versus VCs and Angel Investors. The first scenario for you, the entrepreneur, is to get funded directly by a VC . The chances of that happening in India are low – 1.4%.  The other challenge is that those companies got relatively poor valuations (average about $1.4 Million pre money). Only 19 out of 1300 entities got funded last year to raise their series A through a VC directly. In this case you will possibly dilute 30-40% and still own >60% of the company . I have used 30% dilution in the chart below. The second scenario is to get angel funding and then in 18 months get VC funding. The chances are better that you might go through this scenario (2X more – 43 companies got angel funded last year), and then venture funding. You will end up owning 56% of your company (by g...

StartupCentral has a nice roundup of the +ves and -ves of the newly announced rules here along with an article by "Super Angel" K.Ganesh here . Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to view our products list including the Free Deal Digest Weekly: India's First & Most Exhaustive Transactions Newsletter.

From the post by Alok Mittal - who incidentally wears both hats - at VentureWoods: The venture capital industry in India is relatively small. And besides sporadic instances of “spray and pray”, it has mostly remained tight and focused its resources on one or two bets in a given area. That means that not more than 3-4 companies in any given space get to Series A. Angel investors need to understand this dynamic, and hence not just look at whether a company could build a good business, but also whether it has credible chances of raising the next round of capital to get there. A small VC industry also poses the issue of volatility - couple of VCs talking about an area being over-invested in enough to create a sudden negative sentiment. ...Is the Indian angel investor ready to lead? Are we ready to step up to the plate and make bets that we know VCs don’t like/understand today? Are we simply going to follow what we expect VCs to do 12 month down the line, or are we going to show them...

YourStory has an interesting interview with him on the sidelines of ISB Digital Summit where he keynoted . Extracts (emphasis mine) First, I look for interesting ideas in technology that can create an impact. The second most important thing is the team; except for two companies, all my founders have a technology background . I almost never back a non-tech founder in technology business , because in technology startups you have to iterate really really fast and for that you need a strong understanding of technology. Outsourcing is always a bad idea. Number 3 is engineering + produc t expertise. The Number 4 criterion is I look for commitment to the idea in founders. They must have left their secure jobs, must have faced several setbacks but should have never given up . Ability to attract top talent is very important . For example, Druva is a perfect example of sales + product + engineering. Right founding team is very important. Look at Capillary; they seem ...

Businessworld has an interesting Cover Story focused on Angel Investments - or rather their lack. The article starts of with data from Venture Intelligence showing how the recognized angel networks and well known individual angel investors have together funded about 50-60 startups last year, which is a tiny fraction of the angel investment activity in in the US and even China. The article also has an interesting table on the ratio of companies that apply for funding to the angel networks are actually successful in raising capital. In FY12, Chennai Angels received 123 applications and funded 3 companies, while Mumbai Angels received 100+ applications and funded 12. Indian Angel Network’ numbers were eye-popping: It received almost 5,000 applications; met with 50 of those companies and finally funded 11! Issues faced by the angels: Quality of Startups The article quotes Hemant Kanakia, a Silicon Valley based angel investor who also invests in India as part of IAN saying tha...

US-headquartered Private Equity firm Blackstone stepped on the gas on its India investments, committing to invest over half a billion dollars in just the three months ended September 2011, according to the Venture Intelligence quarterly Private Equity Roundup Reports . Overall, Private Equity firms invested about $2,249 million across 98 deals during the quarter (not including Real Estate investments). Three of Blackstone's investments during the period were targeted at companies involved in Power Projects: SKS Chhattisgarh Power Generation ($261-M via the Blackstone owned Sithe Global Power); Visa Power ($111-M) and Monnet Ispat & Power ($29-M in the listed group company of Monnet Power - in which it had invested $60-M last year). Blackstone was also involved in the largest real estate sector investment announced during Q3’11: a reported $200 million investment in Bangalore’s Manyata Embassy Business Park. The firm also wrote a small cheque (by its standards) - of about $33 mi...

Venture Capital firms invested $217 million over 43 deals in India during the three months ending September 2011, according to a study by Venture Intelligence (http://www.ventureintelligence.in), a research service focused on Private Equity, Venture Capital and M&A transaction activity in India. These figures take the total VC investments in 2011 to $752 million across 136 transactions (compared to $504 million across 97 deals in the first nine months of 2010 and $707 million across 132 transactions during the entire year). The amount invested during Q3’11 was flat compared to the same quarter in 2010 (which had witnessed $212 million being invested across 42 deals) and significantly lower compared to the immediate previous quarter ($325 million across 56 deals), the Venture Intelligence study showed. Information Technology and IT-Enabled Services (IT & ITES) companies attracted the most investments at 21 deals worth about $89 million, followed by Energy and Financial Services ...