Aseem Gujar and Reeba Zakaria | news network
MUMBAI: Global venture capitalists and private equity investors are allocating more money to India as China tightens regulatory crackdown on its tech companies. According to a Bloomberg report, India overtook China in July for the first time since 2013 in VC funding. The report said Indian startups raised around $8 billion in July, while funding to Chinese companies dropped to around $5 billion.
Venture capital (VC) firms said Indian technology companies are seeing a significant increase in funding as global investors rethink their China strategy and shift their focus to India, which has traditionally been a capital draw case. I have lagged behind the dragon. According to the analytics firm, Indian startups have raised a record $17 billion in the January-July 2021 period, up from around $12 billion in the full year 2020 and over $14 billion in 2019. globaldata.
“So far, India lags behind China. As Chinese tech and global investors grapple with increased government and regulatory action, India’s tech fundamentals appear strong. A plethora of B2C (business-to-consumer) and B2B (business-to-business) sectors are coming of age. The pace of scaling and value creation has accelerated. For global investors, India is increasingly checking the right box for technology investment,” said Sameer Nath, Managing Partner at a Mumbai based VC firm TrueScale Capital.
Nath said investors are also looking at liquidity. Nath, who is also a co-founder of the VC firm, said, “The IPO and M&A exit environment has never been stronger, thereby increasing the confidence of global investors in India’s technology.” iron pillar, said.
Although Chinese startups raised about $49 billion in the first six months of 2021, funding has slowed since the December quarter of 2020. CB Insights figures. From a peak of $27.7 billion raised in Q4 2020, Chinese startup funding declined 18% to $22.8 billion in the second quarter of 2021, while India’s funding rose 62% to $6.3 billion from $3.9 billion in the same period.
According to startup investors, another reason why India benefits is the country’s technological talent, public tech infrastructure and market size. “The sudden crackdown in China’s Internet-first tech economy has taken investors by surprise. A stable and rational regulatory environment is one of the prerequisites for long-term, illiquid investments. It’s no surprise that investors are re-evaluating their China strategy. India may benefit from any capital flows away from China,” said Surya Mantha |, Senior Partner in Bengaluru- and Seattle-based VC Fund integrated enterprise.
The lower allocation for India is another factor that could bring in more dollars for the country’s tech startups. “Investors in most of the major capital markets are physically less allocated to India, especially compared to the opportunity set. We see an increase in the full allocation to India in the medium term. In the long term, sustained investment in India will be driven by both demand (investor experience gained) and supply (investable business),” it said. Harsh Sethia, India Head of Global Alternative Asset Manager Investcorp, which managed $38 billion at the end of fiscal year 2011.
According to Sethia, capital flows to tech-enabled businesses is a global phenomenon driven by changing consumption habits and digitization of businesses. “This thesis is reinforced with the very attractive returns generated by such investments,” Shethia said.
According to Tracxn, another data set that points to an increase in capital inflows is that India has seen 25 new unicorns (startups valued at over $1 billion each) in 2021, while China added around 15 Huh.
MUMBAI: Global venture capitalists and private equity investors are allocating more money to India as China tightens regulatory crackdown on its tech companies. According to a Bloomberg report, India overtook China in July for the first time since 2013 in VC funding. The report said Indian startups raised around $8 billion in July, while funding to Chinese companies dropped to around $5 billion.
Venture capital (VC) firms said Indian technology companies are seeing a significant increase in funding as global investors rethink their China strategy and shift their focus to India, which has traditionally been a capital draw case. I have lagged behind the dragon. According to the analytics firm, Indian startups have raised a record $17 billion in the January-July 2021 period, up from around $12 billion in the full year 2020 and over $14 billion in 2019. globaldata.
“So far, India lags behind China. As Chinese tech and global investors grapple with increased government and regulatory action, India’s tech fundamentals appear strong. A plethora of B2C (business-to-consumer) and B2B (business-to-business) sectors are coming of age. The pace of scaling and value creation has accelerated. For global investors, India is increasingly checking the right box for technology investment,” said Sameer Nath, Managing Partner at a Mumbai based VC firm TrueScale Capital.
Nath said investors are also looking at liquidity. Nath, who is also a co-founder of the VC firm, said, “The IPO and M&A exit environment has never been stronger, thereby increasing the confidence of global investors in India’s technology.” iron pillar, said.
Although Chinese startups raised about $49 billion in the first six months of 2021, funding has slowed since the December quarter of 2020. CB Insights figures. From a peak of $27.7 billion raised in Q4 2020, Chinese startup funding declined 18% to $22.8 billion in the second quarter of 2021, while India’s funding rose 62% to $6.3 billion from $3.9 billion in the same period.
According to startup investors, another reason why India benefits is the country’s technological talent, public tech infrastructure and market size. “The sudden crackdown in China’s Internet-first tech economy has taken investors by surprise. A stable and rational regulatory environment is one of the prerequisites for long-term, illiquid investments. It’s no surprise that investors are re-evaluating their China strategy. India may benefit from any capital flows away from China,” said Surya Mantha |, Senior Partner in Bengaluru- and Seattle-based VC Fund integrated enterprise.
The lower allocation for India is another factor that could bring in more dollars for the country’s tech startups. “Investors in most of the major capital markets are physically less allocated to India, especially compared to the opportunity set. We see an increase in the full allocation to India in the medium term. In the long term, sustained investment in India will be driven by both demand (investor experience gained) and supply (investable business),” it said. Harsh Sethia, India Head of Global Alternative Asset Manager Investcorp, which managed $38 billion at the end of fiscal year 2011.
According to Sethia, capital flows to tech-enabled businesses is a global phenomenon driven by changing consumption habits and digitization of businesses. “This thesis is reinforced with the very attractive returns generated by such investments,” Shethia said.
According to Tracxn, another data set that points to an increase in capital inflows is that India has seen 25 new unicorns (startups valued at over $1 billion each) in 2021, while China added around 15 Huh.
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