There is a start-up boom underway. Each day, a few budding start-ups founded by enthusiastic young students and college graduates open shop. According to Nasscom data, more than 3,100 tech start-ups were registered by the end of 2014 and the number is expected to rise to 11,500 by 2020. Many of them will down shutters in some time, while a handful will go on to become behemoths in their niche space, backed by big investor money.
Meanwhile, in a highly competitive investment space, venture capitalists (VCs) and private equity (PE) firms are on the prowl for promising start-ups that could grow to become the next big global company with the right amount of funding and guidance. “The biggest challenge for VCs is to discover very early stage start-ups. The earlier the better, preferably well before the product is launched. Question is how do you discover start-ups well before they are launched?Tens of start-ups take off everyday. (see: Meteoric trajectory). That’s the hardest part of being a VC. You have to do a lot of networking, be on the ground and connect with the alumni of top-tier colleges like IITs or NITs or BITS,” says Tarun Davda, director at Matrix Partners.
Enter Tracxn, a relatively young start-up, which has made itself indispensable among Indian VCs by addressing this key information asymmetry between investors and start-ups. Founded by Abhishek Goyal and Neha Singh, both IIT graduates and ex-venture capitalists from Accel Partners and Sequoia Capital respectively, Tracxn began its operations in May 2013 from Lightspeed Venture Partners’ office in Menlo Park, California.
Funding for Indian start-ups in 2015 has increased more than five-fold since 2013
It was seed-funded by investors Sachin Bansal and Binny Bansal of Flipkart and Sahil Barua of Delhivery. Subsequently, it raised $3.5 million (series A) funding from SAIF Partners. Today, the company which is based out of Bengaluru and C