32 Chennai-based start-ups got angel, VC funding in one year: Report
Some industry experts, however, say the overall support infrastructure for start-ups should improve to compete with cities like Bengaluru, Mumbai and NCR
Chennai: Between June 2015 and June 2016, 32 Chennai-based start-ups received angel and venture capital (VC) funding, according to a report released by The Indus Entrepreneurs (TiE), Chennai on Tuesday.
The report, ‘Chennai Startup Eco-system—Glorious Past, Vibrant Present and a Bright Future’, traces the evolution of the city as south India’s biggest economic and commercial centre, highlights the current status of Chennai’s start-up ecosystem and analyses future growth opportunities and challenges.
“The report traces the rich heritage of commerce in Chennai whilst also giving due weightage to the scenario now and hereafter. This only goes on to show what a long way we’ve come. I’m excited to evaluate and contribute to the valuable insights captured by ‘Chennai Startup Eco-system’ report,” said Lakshmi Narayanan, vice-chairman, Cognizant Technology Solutions Corp., who received the first copy of the report.
As per the report, in the last two years, 18 Chennai-based start-ups have been funded by angel investors. While The Chennai Angels (TCA) made a third of the deals, the Indian Angel Network (IAN) made four investments. Other prominent angel investors include Mumbai Angels, Sprout Angels, Freshdesk’s Girish Mathrubootham and Flipkart’s Sachin Bansal and Binny Bansal.
Almost 56 Chennai-headquartered companies have been able to get VC money over the last 8 years. Online marketplaces, SaaS (software as a service) and healthcare have attracted VC investors.
“Dr. Agarwal’s Healthcare topped the list of funds raised with its $57 million cheque from ADV Partners and India Life Sciences Fund in July 2011. Other start-ups that raised big money in the VC round include Stayzilla ($31.3 million) and IndiaProperty.com ($25.5 million),” the report said.
Of the 56 companies, four got acquired by larger companies since 2013. The report says: “Carat Lane (online jewellery and diamond was acquired by Titan this year). Japanese electronic major Hitachi acquired Prizm Payment Services in 2014. Shop, online handicrafts portal, was acquired by Snapdeal.com in 2013. Geotagg (app tracking public transport) was acquired by Ola cabs in 2015.”
“The report suggests that Chennai has a very long tradition of actively nurturing an entrepreneurial and startup culture with the start-up ecosystem buzzing through flurry of funding deals in the present and the city building on its strengths with the future prospects seeming bright,” said R. Narayanan, president, TiE Chennai.
Though Chennai is one of the oldest mercantile centres with a long history of business in India, spread across different industries, some industry experts said that the overall support infrastructure for start-ups should improve to compete with cities like Bengaluru, Mumbai and National Capital Region.
Chandu Nair, an investor with The Chennai Angels, says: “Funding ecosystem is underdeveloped compared to other cities, while there are a lot of family-run businesses, the number of new entrepreneurs are less—which sometimes is both an advantage and disadvantage and support ecosystem is just getting developed through academic institutions, incubators, private firms, etc.”
While stressing the fact that people understand business by nature, Nair adds: “Apart from Chennai, places like Coimbatore, Tirupur, Sivakasi, Salem, etc., are known for enterprise. Tamil Nadu has always had many pockets, but we have not known how to channelise it effectively.”