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Investments into Indian Startups dropped 75% in Q2 2016
Venture capital investors are turning cautious and that might mean tough times for Indian startups that have gotten used to easy and frequent doses of capital.
Investments into venture capital-backed companies in India dropped 75 percent in the April to June quarter, compared to the same period last year, according to KMPG International and CB Insights’ quarterly report ‘Venture Pulse’.
Investments fell to $583 million compared to $2.3 billion last year, due to a dearth of mega-rounds and “wary investors”, the report said. This is now the fourth straight quarter of decline. The number of funding deals also dropped to 111 from 146.
But it is not all gloomy for Indian entrepreneurs. The report asserts that the outlook remains optimistic thanks to increasing interest in online ventures in healthcare, financial services, consumer goods, and e-commerce businesses.
Another positive trend is that a new class of investors are emerging and showing interest in startups. Family houses and investment arms of Indian business giants are actively showing interest in the startup space adjacent to their core businesses, Prasad pointed out.
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