Home / News / India /  Indian start-up ecosystem becomes more competitive with increasing investor interest

BENGALURU : Private equity investors in India are beginning to grow an appetite for investing in tech start-ups. PE investors typically invest in growth and late stage companies that have tangible assets. This year, however, there has been a 1.5x increase in the number of PE investors backing tech start-ups, from 40 in 2018 to 60 in 2019, according to a Nasscom report on the Indian Tech Start-up Ecosystem – Leading Tech in the 20s, released on Tuesday on the side-lines of the of the 16th Anniversary Edition of NASSCOM Product Conclave 2019 in Bengaluru.

Adding over 1300 start-ups in 2019, India continues to be the third largest start-up ecosystem across the world, taking the total number of tech start-ups to 8900-9300 in the last five years. Start-ups in India raised $4.4 billion in total funding in the first nine months of this year, compared with investments of $4.2 billion in the same period a year ago.

Some of the top PE investors include Zephyr Peacock, WestBridge Capital, General Atlantic and Greyhound Capital, according to the report.

The number of unique venture capital investment firms grew by 20% this year from 210 last year to 250 this year and included the likes of Das Capital, Cornerstone Venture Partners and Alpha Venture Partners.

The January to August period also saw a 14% increase in the number of active institutional investors or those who made at least one investment during the period. The first eight months of this year had 390 active institutional investors compared with 310 during the same period a year ago.

“Indian start-up ecosystem is becoming more competitive for investors," the Nasscom report noted.

“Indian start-up ecosystem has definitely come a long way in providing a level playing field for innovators to flourish by strengthening capabilities and fostering co-creation. The next wave of growth will be at the junction of convergence of technologies, where different sectors will embrace digital to re-define their operations," Debjani Ghosh, President, NASSCOM, said in a statement.

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