Breakout moment for startups as venture capital funds flock to India

New Delhi: With venture capital firms worldwide broadly investing in India, the breakout moment for the country's startups is here, Hindustan Times (HT) reported, citing Nikkei Asia's report on Sunday. Nikkei claims that China's loss turned beneficial for India. The startup tracker Tracxn provided data to Nikkei for the report.

This year, as many as 211 funds, including Andreessen Horowitz, TCV, Vitruvian Partners and GSV Ventures, made debut investments in India. This is 64 more than last year. Kleiner Perkins, the Silicon Valley fund that quit India in 2014, also came back. Nikkei, citing the overall Tracxn data, said that 597 venture capital firms had made 2,284 deals this year.

The regulator crackdown Beijing set on China's tech sector has impaired its appeal as a first choice investment destination for global venture capital in Asia. HT, citing Bloomberg, said that the negative campaign started with Jack Ma's Ant Group and Alibaba Holding last November. This spread to more firms like Tencent Holdings and Didi Global, following Beijing's strengthened oversight on everything, including antitrust to data security and wealth distribution. Beijing's crackdown triggered a massive sell-off and erased 1.5 trillion dollars from Chinese stocks. According to Bloomberg, the stocks were prone to wild swings with every new government probe, rule and warning.

India is shining because of its buoyant public markets and the rapid adoption of online services post-pandemic. Nikkei Asia quoted Singapore based venture capital firm investor Armaan Kapoor that there is a lot more liquidity sloshing around the ecosystem, and some of it has been directed from China to India. HT, citing analytics platform CB Insights, reports that venture capital investment in India was at an all-time high of 19.5 billion dollars in the first nine months of the year. The July-September quarter accounted for half of the corpus, 9.9 billion dollars, through 519 deals.

In the inaugural edition of HT Nxt, business leaders from various fields argued that though the availability of easy capital has often been cited as a primary reason for the boom in the ecosystem, the focus on innovation helped script the success story. The industry association, Nasscom and strategy consultant Zinnov, had said in a report in January that India might have 100 new unicorns by 2025.