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Indian Start-up Ecosystem Thrives Despite Funding Winter Ivy Chin from Inflection Point Ventures highlighted the diversity of investors, including CXOs and professionals, contributing to the angel investing ecosystem.

By Priyanka Tanwer

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In spite of the funding winter, we're still seeing a lot of interest from smaller cities, Rohit Krishna, General Partner, WEH Ventures said. He was speaking at the panel discussion on the Expanding Investor Pool In India, at the Tech and Innovation Summit in Bangalore, organised by Entrepreneur Media.

He discussed the increasing domestic capital in India and the growing interest from smaller cities and towns. He also emphasized the rising penetration of the internet and the potential for self-reliance in funding Indian start-ups.

"If you compare 2017 to now, I think the overall basis changed significantly. We are a 95 per cent domestic fund. So we've raised all the capital from LPs in India. And I think it's gotten much easier to raise capital, thanks to everything that's happening in the ecosystem. But more importantly, if you see, I think we crossed 50% penetration in internet for the first time last year that is China crossed in 2015. And US crossed it in 2001. So I think now is when it's a great time to enter. And a lot of people are realising that, in spite of the boom and bust or whatever funding winter, we're still seeing a lot of interest, even from places like Coimbatore and Karur in Tamil Nadu or Gandhidham in Gujarat," he added.

Ivy Chin from Inflection Point Ventures highlighted the diversity of investors, including CXOs and professionals, contributing to the angel investing ecosystem. She emphasized the accessibility of start-ups as an asset class for various investors.

"We've always served the image of an angel investor, someone who's either been an ex-founder, and has sort of created wealth already as part of the ecosystem and therefore contributing back when IPV started, the intent was to say that as an asset class start-ups are therefore available and an option for across the board, anyone who's looking to build out a portfolio of assets, and therefore our first members were actually CXOs. So I think that continues for us as a team, sort of professionals who are in corporate jobs, so to speak, but then accessing this to add to their overall wealth building portfolio," Ivy Chin, Partner, Inflection Point Ventures said.

"In that while we talk about that, I think there is of course, the tearing from locations, but I think we've seen and we are about 12,000 Plus members, we see our members coming in across 45 countries, but then within India as well across cities and depth there as well," Ivy added.

Speaking about the set of investors, Neeraj Tyagi, Co-founder and CEO, WeFounder Circle discussed the diverse sources of capital, including tier 2, 3, and 4 cities, and the active participation of the Indian diaspora in global startup cities. He also highlighted the role of cross-border investments in connecting Indian start-ups with international markets.

"If I want to highlight two very interesting and healthy signs, one is the tier 2,3, and 4 ecosystem and second is the Indian diaspora outside India, a huge population of people who are specially in global start-ups, cities like Singapore, Hong Kong, Dubai, and London, they have always been well exposed to this asset class. For them, the challenge was different. It was a challenge of how to invest in Indian ecosystem, because there was no fund structure as such. So I think these are the three areas that we identified. As an organisation we worked on these two and I'm very happy to say that one, we are the only cross border Angel fund today. So we can bring in small checks of USD 5000 -10,000 in any company in India, across the world," he added.

Speaking on how international LPs are looking at the Indian market, Anant Vidur Puri, Partner, Bessemer Venture emphasized the global interest in the Indian market due to its rapid growth and stability compared to other economies. He discussed the sectors of focus for his firm, including consumer internet, FinTech, software, health tech, and global SaaS.

"If you look at what's happening globally. India is going to be the third largest economy soon. So if you are a global investor, you want to be in the top three, four or five economies. And if you leave out the US, the next one is China and last few years haven't been great for investors in that geography. So, India kind of is the fastest growing rapidly rising soon to be number three largest economy which is easily accessible," Puri added.

He said that India is emerging economy not embroiled in any of those kind of conflicts and it is a stable place for global capital looking to invest in emerging economies.

Meanwhile, Ashwin Raghuraman, Co-founder and Partner, Bharat Innovation Fund discussed the fund's focus on pre-N Series A rounds of deep tech start-ups and the three buckets of deep tech investments: advanced software, hardware-software mix, and biotech/bioscience. He also emphasized the importance of aligning expectations between investors and founders.

He said that he has not seen better time to be a founder in the last 14 to 15 years. "There's so many sources of capital, so much capitalists, so many different stages and while it may not be enough to support all the entrepreneurial activity, it's still the best and the easiest to raise in today's world, compared to maybe 5-10 years back," Ashwin said.

Priyanka Tanwer

Feature Writer

With eight years of experience covering various beats for the digital and print media, now covering electric vehicles and sustainability for Entrepreneur India, keeping a nose for innovation and new technology in this futuristic sector.     

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