The tech startup ecosystem in India has seen the emergence of a slew of new investors recently, many of whom are coming in to support with seed funding. Even as a Series A funding crunch is felt in the country with venture capital firms turning cautious, the new funds are coming in to provide an early lifeline for new ventures.
“Startup investors help seed the ecosystem, as they are willing to fund with smaller amounts of capital which is much harder for large funds. Young entrepreneurs also get valuable help in terms of business advice, product strategy, etc from the investors since these investors are often quite experienced,” said Ashish Gupta, senior MD, Helion Venture Partners.
He said there are not enough angel investors and that gap is also partially filled by seed investors. “These young companies form a pipeline of future larger companies,” he said.
According to Mukund Mohan, CEO-in-residence at Microsoft Accelerator for Windows Azure and an active angel investor, the rise of the new set of investors is a positive development for startups.
“Given the number of startups seeking funding is in the thousands, the more the investors that are available in the earlier stages (seed, angel) the stronger the ecosystem will become,” he said.
He said there are around 70 early stage and seed-stage investors who have been active in India for over a year.