Come tech bubble or fundraising struggle, India’s startups stay optimistic: report

Their experiences might be difficult, but startups are willing to look past that because they believe they have what it takes. Photo credit: viperagp / 123RF.

The success rate for funded startups is less than 10 percent, and as many as 1,000 startups shut down last year. But that’s not stopping India’s startups from shooting for the stars. Venture debt firm Innoven Capital will release its Startup Outlook Report 2017 tomorrow, but here’s a sneak peek at how founders are viewing the upcoming year – namely, their chances of obtaining venture capital, India’s government policies, and the industries they think are overrated – come what may.

See: Startups are nailing their own coffins with VC hammers. Here’s a way to escape that fate

Fundraising: rose-colored glasses in stormy seas

Source: Innoven Capital Startup Outlook Report 2017.

Around this month last year, there were around 19,000 startups in India. Innoven Capital surveyed 175 founders in 15 industries across bootstrapped, angel-funded, and VC-funded companies – and found them optimistic for the future.

50 percent of those surveyed tried their hand at fundraising last year. Of that group, 63 percent “did not have a favorable experience.” However, 94 percent of all survey respondents are looking to fundraise this year.

The average startup pitched to six or seven investors before raising a round.

The average startup pitched to six to seven investors before raising a round, and 38 percent of startups that attempted to raise funds secured a “favorable” round.

The study pool named equity fundraising as its greatest challenge – 26 percent found it challenging, followed by talent management and market creation.

The crowd was evenly split between thinking investment hunting would be easier or not this time around. They also split into even thirds – along responses “yes,” “no,” and “maybe” – when asked if India was in a technology bubble. Of the third that answered “yes,” 54 percent said they thought the bubble would burst “soon.”

VC-funded startups tend to seek the greatest amount of funding this year – a median of US$12.5 million – while angel-funded, seed-funded, and bootstrapped startups seek a median of US$2 million.

Source: Innoven Capital Startup Outlook Report 2017.

Help wanted with investors

A few good women

Hype, or lack of it

Taxes and the government