Mumbai: Angel investors who provide start-ups capital, typically after the first, or so-called seed round, or even in it in some cases, were more active in 2014-15 than they were in 2013-14, reflecting the still ongoing larger trend of more entrepreneurial activity and more funding for the resultant start-ups that emerged a few years ago.

According to Innoven Capital’s India Angel Report 2015, angel investors invested 70.25 crore in 2014-15, an increase of 81.1% over the previous year.

The report, launched in collaboration with the Association of Indian Angel Groups (AIAG), covered investments done by India’s five most prominent angel groups, the Mumbai Angels, Indian Angel Network, Calcutta Angels, The Chennai Angels and Hyderabad Angels.

Together, these groups have around 700 members, mostly high net worth individuals (HNIs).

According to the report, between April 2011 and April 2015, these investors participated in a total of 153 deals, committing 204.27 crore.

Over the last year, the median angel round has grown from 50 lakh in 2013-14 to 1.38 crore. As average deal sizes shoot up, pre-money valuations have also increased for these start-ups.

The report adds that the number of investments is highest in the information technology (IT) and information technology enabled services (IT/ITES) space and in online services companies. While start-ups generally do not generate revenue in their early days, investors are now increasingly preferring to invest in revenue generating companies.

The report says that a fourth of angel investments done by the groups are in their existing portfolio companies, indicating an increasing focus on follow-on rounds.

“The report is intended to be an educational and benchmarking tool for both, angel investors and companies to make better informed decisions at the time of the investment. A better informed investment decision at the angel stage benefits everyone further down the investment cycle including VC firms and the entire venture ecosystem," said Ajay Hattangadi, managing chief executive officer and managing director, India and South East Asia at InnoVen Capital India.

Innoven Capital is a non-banking financial company (NBFC) owned by Singapore-based investment firm Temasek International Pte Ltd which focuses on venture debt. It has made loan commitments of over 700 crore across nearly 80 transactions to venture capital backed companies since starting operations in India in late-2008.

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