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Age of Plenty

It is not only flush venture capitalists who are chasing start-ups. Family offices and high-net worth individuals are also chasing Unicorns

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After the lull in 2016, it’s been raining deals for the Indian VC industry. There is renewed confidence. Over the past two years, Indian start-ups have received nearly $26 billion in funding across sectors. This year not only saw gangbuster exits but also saw eight start-ups join the much coveted Unicorn club. With nearly 7,700 start-ups, India now boasts of having the third-largest start-up ecosystem and most number of Unicorns after the US and China. Such euphoria was last witnessed in 2014-15, but that came crumbling down, thanks to blown-up numbers and overvaluation as investors threw money at just about anything as the fear of missing out gripped them. The current optimism would have you believe that it is going to be different this time, but will it?

In 2018, total funding shot up 108% compared to the same period last year (till September) according to Nasscom. Early-stage deals went up by 4%, but the momentum was more evident in late-stage where funding went up by a whopping 259%. But the headline wasn’t always this rosy. Exits have been bit of a problem for India-focused VC funds, dragging down their overall performance compared with their global peers. The situation is slowly changing now. In 2018, exits are up nearly 6x over the past year, according to data from Venture Intelligence.

Arun Natarajan Founder, Venture IntelligenceWhile the $16-billion Walmart -Flipkart deal did skew the numbers, it came as a relief, after a choppy season in which Flipkart itself saw a fall in valuation. Its competitor Snapdeal, another Unicorn, had fallen by the wayside. The landmark deal showed it was not only possible to create internet businesses of scale in India but also generate significant return for its investors. “Thanks to this mega transaction, now the exit scenario is far better. Other Unicorns such as Paytm, Oyo and Byju’s too have given good exits through secondary sales,&rd

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