Startups in India: August 2018 was all about exits

The month of August closed with $631 million being invested in the Indian start-up ecosystem across 72 deals versus $3.1 billion across 56 deals in same time last year.

While the month might seem slower in terms of funding than the previous month, there was a healthy mix of deals and there was an encouraging sign of more exits.

In fact, the number of exits seen in the start-up ecosystem this month came to 30 as compared to last month’s 14. The same period last year saw 19 exits. It, therefore, is safe to say, that the number of exits this August were significantly higher.

Sreedhar Prasad, head - consumer markets and internet business, advisory at KPMG India, believes this is a growing trend. “Large consumer internet unicorns are now becoming acquirers. They are acquiring newer categories, technologies and making acquisitions within the ecosystem. They might even look at investing in newer start-ups. The trend will continue for a while.”

Some of the exits seen this year include Flipkart-acquired online interior design firm Livspace.ai, Amazon Pay reportedly acquired Tapzo, Paytm acquired Bengaluru-based balance.tech, Swiggy acquired delivery firm Scootsy and OYO acquired Weddingz.

Interestingly, US-based Cognizant acquired Noida-based SaaSFocus while NetObjex, also based in the US, acquired the Thiruvananthapuram-based Blockchain firm Servntire Global.

“This is another trend. Global firms and large Indian corporates are looking to acquire start-ups; they’re going beyond internet start-ups,” Prasad says.

V Balakrishnan, chairman, Exfinity Venture Partners, says, “The funding environment continues to remain normal and there are no challenges as such.”

Vinod Murali, co-founder, Alteria Capital, says that investor interest had not declined in any way. “Deals aren’t closing in one or two months, like they would few years back. It now takes a minimum of six months to close a deal and get the money in the bank,” he says. He’s hopeful about the next six months, primarily because of the newer funds and dry powder in the market.

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“Series A, B, and C now are going to be challenging because investors are focused on having a better profile in revenues from start-ups, especially at a threshold of minimum $1 million before they put their money,” Balakrishnan says.

By: Sindhu Kashyap
(Courtesy: YourStory.com)

Source: DNA Money