NCR start-ups are facing funding crunch; attract $170 million in 2016

As per the report ‘VCCEdge Start-up Funding Insights’ from News Corp VCCircle, which focuses on the funding activity in the National Capital Region (NCR), NCR has witnessed 873 funding deals to the tune of $1,571 million of the total $6,721 million across 3,682 deals ever since 2011. This represents 24% of the total number of deals and 23% of the total deal value.

Last year, however, was a landmark year registering a deal value of $608 million as compared to the $289 million in 2014, but at the going rate, looks like 2016 won’t be able to match this amount, let alone match last year’s performance. The number of deals also swelled 110%, going from 143 in 2014 to 300 in 2015.

Talking of this year, 2016 has until now seen 155 deals worth $170 million, out of which the investment of $17.19 million made by Sequoia Capital India, Omidyar Network India, Maverick Capital, and HBM Partners in the Gurgaon based Healthcare Start-up, 1MG Technologies grabbed the top rank.

On the other hand, online gaming company Gamooz Interactive Solutions’ funding to the tune of $15 million made by angel investors such as Taha Nabee, Anupam Gopal Mittal, Anand Kumar Ladsariya, Devesh Ghanshyam Chawla, Suneel Bandhu and Miten Mehta can be counted as the top Angel/Seed funding deal.

Here are the segment-wise highlights since 2011:

• Food-Tech got the maximum number of deals, having 50 investments worth $28 million

• Travel-techn saw maximum fund flows, bringing in $80 million across 46 deals

• Fin-Tech came second in terms of value and fourth in terms of number of deals, closing 34 investments amounting to $70 million

• Edu-tech space attracted $36 million from 39 deals

• Tech-enabled platforms across other segments such as advertising, real estate, health, and entertainment saw $55 million of funding from 73 deals

However, there has been a fall in the pace of Series A rounds of investment and beyond, which is bound to affect start-ups in the “High-Growth-High-Burn” mode.

“The question we need to ask is whether or not the current startup ecosystem in the region lacks enough high quality startups eligible for Series A & beyond round of investments. The slowdown is attributed to investor pragmatism and selectiveness in funding enterprises that have business models that best optimize the funding they receive. Start-ups have to, perforce, ‘Conserve and Grow, or Perish’. The silver lining we at News Corp VCCircle see is the emergence of new investment vehicles such as venture debt besides a new genre of celebrity & angel investors,” said Ms. Nita Kapoor, Head - India, New Ventures, News Corp and CEO, News Corp VCCircle.

About the author: News Corp VCCircle runs financial news website VCCircle.com, a startup news site Techcircle.in, and the financial data platform VCCEdge.

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