2015 Marks Landmark Year For Venture And Startups In India

India moneyIt was a landmark year for the startup ecosystem in India. Some $9 billion was invested in 925 Indian startups in 2015, 50% of the total amount for the past five years together with such hot startups as Flipkart, Ola, Paytm and Snapdeal all raising more than $500 million in financing. China’s BAT – Baidu, Alibaba and Tencent – also have joined in, scouting for Indian startups to invest in.  Alibaba inked two major deals in India this year, $680 million in online retailer Paytm and $100 million plus in online marketplace Snapdeal. Tencent invested in online healthcare deal Practo in a $90 million fundraising. Baidu has been in talks to buy online coupon and discount marketing firm Mydala.

Meanwhile, venture capital firms raised more than $4 billion in new funds in 2015, the highest sum in four years. Nexus Venture Partners raised $450 million and Accel Partners $305 million, while Helion Venture Partners picked up $300 million. Additionally, Sequoia Capital India has been considering raising a new fund of $800 million for more investing.

The activity got another shot as three partners at Helion — Rahul Chowdhri, Ritesh Banglani, and Alok Goyal — are leaving, presumably to start their own venture in a move that has echoes of the split by Westbridge partners from Sequoia Capital India in 2011. Since a start in 2006, Helion had raised four funds and funded more than 60 startups, with such notable exits as the NY IPO of MakeMyTrip and the acquisition of Rebus by Napsters.

The new entrepreneurial culture in India is fed by a young and mobile population who more often than not are online. More than half the startups that were funded this year are in e-commerce or consumer services, according to industry association NASSCOM. The e-commerce sector drew $700 million in financing to top the list. Unicorn startups valued at $1 billion or more also surfaced in India for the first time, led by Ola with $1.1 billion in funding followed by FlipKart with $700 million.

The trend of India catching up with China with entrepreneurial venture activity was forecast early on in my book Startup Asia, published in 2011.

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