With 316 offers, complete early stage (Seed/Pre-series A) funding was 63% increased than 2020. Complete variety of offers went up by 30% whereas average deal size went up 20%.
Early-stage funding in India surged 63% in calendar 12 months 2021, with traders pouring as a lot as $594 million into startups at seed and pre-Sequence A rounds throughout 316 offers, mentioned a report by InnoVen Capital, considered one of Asia’s main enterprise debt agency.
The ‘Early-Stage Funding Insights Report 2022’, outlined present tendencies within the early-stage (Seed/Pre-A) Indian start-up ecosystem and famous that the overall variety of offers in 2021 went up by 30%, whereas common deal dimension went up 20% to $1.8 million in 2021 from $1.5 million in 2020.
Over 67% of the early-stage traders surveyed invested extra in 2021 when in comparison with 2020, whereas valuations continued to go up, with 56% of offers at $5-$10 million valuation.
Fintech, B2B platforms and SaaS had been essentially the most favored sectors final 12 months. Over 47% of traders count on that the funding exercise this 12 months will see some slowdown. The sectors which traders are most on this 12 months embrace Web3.0, HealthTech, FinTech, SaaS and Creator financial system.
Traders selected the standard of the founding staff as a very powerful issue they concentrate on whereas evaluating offers, adopted by the attractiveness of the sector. The survey additionally highlighted traders having a excessive desire for a couple of founder, with 76% of funded start-ups comprising two co-founders.
Traders additionally choose skilled founders, with 70% of founders having expertise of 5 to 10 years, the report confirmed.
The variety of repeat founders additionally elevated, with 29% of traders having greater than 30% repeat founders in offers concluded in 2021.
71% of traders have backed new founders with the share of repeat founders decrease than 30% of their portfolio.
Bangalore, NCR, and Mumbai proceed to type the core of the start-up ecosystem. Over two-thirds of early-stage investments made by respondents had been in corporations which can be headquartered in Bangalore or NCR.
Nearly all of the traders relied on the home pool of capital for his or her funds. In actual fact, 29% of them have 100% home Restricted Companions (LP’s). Household Workplaces and UHNIs are the highest sources of home capital within the VC ecosystem adopted by funds of funds like SIDBI.
“Early-stage funding exercise has confirmed to be resilient in 2021 with larger transaction sizes at increased valuations and a rise within the variety of Angel Syndicates that are all clear indicators of a maturing early-stage ecosystem,” mentioned Tarana Lalwani, Accomplice, InnoVen Capital India.