The Venture Intelligence Blog

What exactly is a startup? According to Y Combinator founder  Paul Graham :  A team of good people making something customers actually want and spending as little money as possible to do so.    According to Stanford Prof Steve Blank : A startup is an organization formed to search for a repeatable and scalable business model. According to #StartupIndia (ie, DIPP ) an entity will be identified as a startup. 1. Till up to five years from the date of incorporation. 2. If its turnover does not exceed 25 crores in the last five financial years. 3. It is working towards innovation, development, deployment, and commercialisation of new products, processes, or services driven by technology or intellectual property. 4. Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a 'startup'; Now,  Business Line  has interviewed entrepreneurs and VCs to get their personal defin...

Venture Capital firms made 197 investments worth $623 million in Indian companies during the six months ending June 2016. The investment activity in H1’16, while 18% lower compared to the same period in 2015 (which witnessed 240 investments worth $958 million) is actually the highest ever (if we were to ignore the "dream year" of 2015), Venture Intelligence show.  Arun Natarajan, Founder, Venture Intelligence and Ashish Fafadia, CFO, Blume Ventures discuss these numbers in the ET Now Startup Central show. In the video, Ashish Fafadia of Blume points out how, with more seed and angel capital becoming available, Series A funding will continue to be a "choke point" for startups. 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.

While Softbank hit the headlines in 2014 with its big ticket - leading multi hundred million dollar rounds - in growth stage companies like Snapdeal and Ola, 2015 saw the entry of lesser known Japan-based investors - like Beenos Partners and Rebright Partners - entering the early stage segment in India. Beenos Partners investments include ShopClues.com (Series B), Voonik (Series B), Droom (Series A) and CitrusPay (Series B). (Click to View) Both the number of Japanese investors - both Venture Capital and Strategic Investors - as well as startup companies in their portfolio has only grown in 2016. Active Japanese investors in India include Beenos Partners, Rebright VC, Digital Garage and GMO. With some of them teaming up for bigger investments.... And what's more, newer funds from Japan have announced plans to enter India soon like Gree Ventures and Dream Incubator or made single/strategic investments like impact investor Arun Llc, DeNA, Zenrin and Nihon...

2016 has already seen 6 angel investments in parenting startups with participation from strategic investors and VCs. Interested in viewing transactions, financials and valuations of funded companies? Try out  the Venture Intelligence PE/VC Deals Database. 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. 

An Economic Times article by Biswarup Gupta uses Venture Intelligence data on the growing acquisitions of startups due to the funding slowdown and what the ecosystem can expect in the coming financial year. In the fiscal year ended March 31, the number of mergers and acquisitions involving technology startups more than doubled to 146 transactions from 69 in 2014-15, according to (deals) data tracker Venture Intelligence.   Other Trends:  1. On demand hyperlocal services, fin-tech ventures (e.g. wallet companies), and OTAs are touted as prime targets. (Want a list?  mail us ) 2. More consolidation this year -  Aashish Bhinde, Avendus Capital. 3. Flipkart & Snapdeal to continue their pace of acquisitions in FY2017. 4. Common investors tend to catalyze the situation (acquisition/merger) - Sameer Sood, Credit Suisse 5. Acquisitions will be more via stock in order to reduce cash outgo - Navroz Mahudawala, Candle Partners Venture Intelligence is In...

Kashyap Deorah, author of "The Golden Tap: The Inside Story of Hyper-Funded Indian Startups" and the former President of the Future Group's e-commerce venture Futurebazaar.com, has a LinkedIn post describing various examples of ethically challenged behaviour at Indian startups. Extracts: Senior management of a startup create new companies that provide services to their hyper-funded startup. The startup loses money through its nose while the service provider makes great margins. The service provider compensates its shareholders through dividends and individuals through fees. In similar news, relatives of the founder of a large e-commerce company become sellers on the platform, get tipped off about when the company will sell at negative gross margins, and sell to the e-commerce company at a higher price only to buy back in bulk at a lower price. ...A VC firm struggling to return money to its investors after seven to eight years finds a portfolio company in a space t...

Venture Capital firms invested $242 million over 85 deals in India during the three months ending Mar 2016, data from the Venture Intelligence VC Deals Database shows. The investment activity by volume during Q1’16 is 32% lower compared to the same period in 2015 (which had witnessed 125 investments worth $471 million). The activity level was also 13% lower to the immediate previous quarter (which had witnessed 98 deals worth $347 million). Note: As VC type investments cap out at $20 million per round under Venture Intelligence definitions, follow on investments raised by companies like BigBasket, CarTrade, ShopClues, Byju’s Classes, etc. are not included in this report. The larger Growth Stage investments in Q1’16 included the $20 million Series D investment in B2B Group Buying site Power2Sme led by Nandan Nilekani (along with existing investors Kalaari Capital, Accel India and Inventus Capital) and the $13 million third round investment in baby products e-commerce site Hopscot...

ET-NOW - Venture Intelligence Funding Meter kicked off on the channel's Startup Central show. Catch It Each Friday 6.30 pm on TV or etnow.tv 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.

One by one, well funded players in the foodtech and hyperlocal sectors - including leaders Zomato and Grofers - are announcing closing down of their operation in Tier II cities. The withdrawal reminds one of the early days (2006 - 2008) of Private Equity Investing in Real Estate when PE-RE firms had spread out beyond the metros to invest in cities like Jodhpur, Kochi, Jaipur, Nagpur, Nashik, Mysore, Indore and Vishakhapatnam. The stats highlighting the boom across Tier II & Tier III towns were, of course, supporting.  But, come financial crisis, PE-RE investors turned allergic to Tier II and started to explicitly state that they would henceforth focus on Tier I markets only . Does the Zomato and Grofers experience mean that the "pent up demand in small town India" phenomenon that works for big guys like Flipkart and Snapdeal, will not work for food and local delivery? At least until the road traffic in these cities and towns does not make going out to eat or t...

Haresh Chawla has an biting beginning-of-the-year post for start-ups at Founding Fuel . There are two Indias: the top 10% that can afford your clone offering, and the remaining 90% that can’t or simply won’t...The Indian consumer is value-driven, not convenience-driven. We have all the time in the world to research and find the best price. Most have time to find a competing offer. We hate paying for service. And loyalty—what is that? Indians will not pay for delivery, service or extra conveniences and will accept deals from your competitors with both hands. Does your clone-model account for this? Servicing the 90% can become a continuous drain on your business. There is no farming with them, only hunting. What I find utterly baffling is that while our startup entrepreneurs put up Amazon, Uber and Airbnb as their idols, they never focus on how these folks did it. They never tune into the fact that Amazon’s founder Jeff Bezos knows that he is playing a thin-margin game and winning d...

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...