Venture Capital Investment In Indian Startups Dips By 35% In First Quarter Of 2016

Decline

4 April, 2016, Bangalore: The first quarter of 2016 may not have proved a great hunting ground for Indian startups. Though the sector received a thumping support from the government, but still, it has not managed to allure the interest of Venture Capital’s investors.

As per the recent media reports, the investment of Venture Capital in Indian startup has declined sharply and the figures suggest that it has fallen down to over one third as compared to last year. Investors are terming this slowdown as the ‘new normal,’ as it comes on the back of a frenzy of funding in the last two years.

According to the data of VCCEdge a risk capital data monitoring service, The number of venture capital deals fell by 35 per cent during the first quarter of 2016 to 90, as compared to 138 in the same period one year ago.

The total value of venture capital invested took a drastic fall of over 80 per cent during the first quarter of 2016 to US $337 million from US $1.79 billion, as mega-financing rounds disappeared and deal sizes turned modest. Speaking on the issue, Vikram Vaidyanathan, MD-Venture Funds, Matrix Partners India, said “A lot of companies were overfunded last year. A $25-million round last year is today at maximum a US $9-10-million round, and those cheques are being written by traditional venture capital investors like us.”

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