Why 2015 was the year of Indian Startups, tell us imminent investors

2015 was the year that saw the startup industry in India come off age. While on the one hand, there were brave individuals starting up on their own, the year saw companies like Ola, Snapdeal, Quikr, Zomato and Paytm crossing the $1 billion in valuation to join the Unicorn club on the other. The rise of startups also led the angel investment community to take more risks than before. However, most importantly, all along India witnessed a Prime Minister who went the extra mile in encouraging the startup community by announcing several government measures -‘Startup India, Standup India’ being the latest one – while also showing the world the power of entrepreneurs back home.

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As the spectacular year draws to a close, imminent investors take us through the significant changes which both the startup as well as investor community witnessed in 2015. Read on:

STARTUP ECOSYSTEM BUILDING IN INDIA

“2015 has been a watershed year because there has been huge growth in the quality of startups that have come in,” says Saurabh Srivastava, cofounder of the Indian Angel Network and Nasscom. Happy to see an ecosystem building, he says: The government is beginning to encourage startups like never before as they also believe that startups can build wealth and employment. Moreover, people are seeing so many other successful ones with innovative ideas which are making good amount of money, solving ground problems and attracting global interest that they feel encouraged to do startups themselves. Also, there is huge interest among angel investors to come in, invest and take more risks.”

ANGEL INVESTMENT BECOMING AN ASSET CLASS:

Mrs Padmaja Ruparel talks about the growth of angel investing community in India and how it has become an asset class.

“It really is a class where first generation entrepreneurs like Saurabh, Narayanan Murthy and the likes – all middle class entrepreneurs who created garage to IPO kind of companies - have had a passion for entrepreneurship and have wanted to remain engaged in new innovations. They do this today by not only investing in young startups, but by mentoring and providing market access through their global network. This asset class has now moved beyond entrepreneurs. So, we are seeing lot of professional class investing and lot of second generation business house people also investing.”

“On the other side, I feel starting up will become a career option soon. We are seeing entrepreneurs’ freshly out of college increasingly doing startups. One of our companies Mukunda Foods making tabletop dosa making machines, have youngsters who came out of college, created a prototype and are now delivering across nearly 9 countries. This is not to say that others aren’t. It’s also true that several experienced professionals are also building startups,” she says.

SHIFT IN TRADITIONAL MINDSET AND APPROACH OF INVESTORS

Saurabh, who has nearly two decades of experience in funding startups, admits there has been massive change in the way investors look at startups today.

“Investors are willing to put their money in more and more startups these days. 15-20 years ago investments were made only in IT companies, particularly those which had global appeal because growth came from overseas market. Today, India itself is a big market and we now see high quality entrepreneurs across variety of sectors – healthcare, IT, education, semi-conductors, hospitality, medical devices, ecommerce etc. A big shift in the investor approach has been to take the risk of investing in companies which target only the domestic market. Some of our best successes at IAN have come from companies catering to the Indian market,” he says.

GEOGRAPHY NO MORE LIMITING FACTOR, INVESTMENT HAPPENING OVERSEAS

Meanwhile, Padmaja feels opportunities lay galore for startups everywhere in the world when it comes to raising funds. Why? She explains:

“IAN has set up its angel investment office outside the country. We are not only seeing entrepreneurs there, but actively investing too. The reverse is true as a lot of overseas investors are investing with us in companies that we are bringing the opportunities from. Geography is thus not a limiting factor anymore and that’s where we are able to make IAN a global platform where people from around the world can invest and get good returns,” says Padmaja.

INDIA IS BEGINNING TO ACCEPT FAILURES

Both Saurabh and Padmaja are of the opinion that failing does not minimalize chances of getting money from investors as there is increasing social acceptance for failures in India unlike before.

“I think the concept of accepting failure was not there in India, but it is starting to get accepted. You try your best but it may not have worked for various reasons. I feel people who have not succeeded can be very good entrepreneurs because they have learnt from mistakes and have the hunger to succeed,” says Padmaja.

Saurabh joins in to conclude: “When somebody has tried failed and wants to do it again, it shows character. It shows passion and commitment. An entrepreneur doesn’t always fail due to incompetence, there could be several other reasons say their partners let them down. They want to come back again and show the world what they can do. There has to be social acceptance for them and it is happening within the investor community gradually.”

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