This article on the top angel investors in India is an extract of Inc42’s recently released annual Indian Tech Startup Funding Report 2018, which provides a detailed analysis of the funding trends, VC funds analysis, and mergers and acquisitions (M&As) in the Indian startup ecosystem for the period 2014-2018. To read more articles on this report, click here.
It won’t be an exaggeration to say that angel investors are a boon to the Indian startup ecosystem, delivering startups to scalability and success. Even though angel investors are involved only in a handful deals every year, most of them bring to the table something extremely valuable for budding or newbie entrepreneur — the experience of being entrepreneurs themselves.
However, in these times of startup boom, angel investors are being very cautious about putting their money on startups. According to Inc42 DataLabs, in 2018, the number of unique angel investors that participated in Indian technology startup funding was recorded as 416, a 30% drop as compared to 2017.
Further analysis of the spread of (disclosed) deals among angel investors shows that 90% of them did just a single investment and only 1% did more than three investments last year.
This is a critical observation, indicative of the fall in seed and early-stage funding recorded in 2018. As per Inc42’s annual Indian Tech Startup Funding Report 2018, an amount of $11 Bn across 743 deals was raised in 2018, which is slightly lower than the 2017 figure.
Even though angel investments may not be soaring at the moment, their importance in the ecosystem funding cycle is undeniable. So, Inc42 took a look at the angel investors who gained the top spots in 2018.
With six deals each, ex-Flipkart Group CEO Binny Bansal and Google India managing director (MD) Rajan Anandan shared the top position. They were followed by the chairman of Axilor Ventures, Kris Gopalakrishnan, at five deals and CEO of Tradeindia.com, Bikky Khosla, at four deals.
Most Active Angel Investors Of 2018
#1 Binny Bansal
Flipkart cofounder and ex-Group CEO Binny Bansal maintained his lead as an angel investor from H1 2018. Bansal invested in startups such as Bengaluru-based biotech company Pandorum Technologies, Mumbai-based snack FMCH startup YumLane, Bengaluru-based healthtech startup NIRAMAI, and Bengaluru-based health and fitness startup Cure.Fit, among others.
Despite being caught in the thick of a controversy over an extra-marital affair gone sour and his unceremonious exit from Walmart-owned Flipkart in November last year, Bansal channelled his entrepreneurial instinct and got together with former McKinsey consultant Saikiran Krishnamurthy to launch his new venture — XTo10X.
Also, as a parting gift from Flipkart, he is supposed to get $100 Mn as part of an early exit deal with US-based retail giant Walmart. Seems like his coffers are brimming and we can expect more startup investments in 2019!
#2 Rajan Anandan
From the second spot in H1 2018, the Google vice-president and MD raced to the top spot to share the first place with Bansal. Some of his notable bets included Bengaluru-based online lingerie startup Buttercups, Bengaluru-based pregnancy tracking solution provider PregBuddy, and Delhi-NCR-based healthcare marketplace LetsMD.
Anandan usually invests in internet, mobile, and SaaS-based startups, and seems to be keen on healthcare.
In a recent media interview, he also said, “It is time companies cater to the 3Vs of the digital medium — voice, video, and vernacular language.”
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#3 Kris Gopalakrishnan
In the third spot was Kris Gopalakrishnan, the executive vice-chairman (former co-chairman) and cofounder of Infosys, a global consulting and IT services company based in India. He replaced Freshworks CEO and founder Girish Mathrubootham, who took the lead in Inc42’s Tech Startup Funding Report H1 2018.
Last year, Gopalakrishnan invested in Chennai-based submersible robotic inspection startup Planys Technologies, Bengaluru-based B2B foodtech company HungerBox, and Bengaluru-based automated customer support and engagement platform Verloop.
#4 Bikky Khosla
The angel investor who made it to the fourth spot is Bikky Khosla, an entrepreneur and the CEO of tradeindia.com (Infocom Network Limited). He is also the chairman of ASSOCHAM National Council.
In 2018, Khosla made investments in New Delhi-based home rental service startup ZiffyHomes, Bengaluru-based micro-learning platform Knudge.me, Noida-based online global student housing marketplace University Living, and Delhi-based biotechnology startup Clensta across seed rounds.
#5 Raghunandan G, Anand Chandrasekaran, And More
As mentioned earlier, only 1% angel investors made more than three investments last year. Here are a few notable ones who did. They collectively nabbed the fifth spot .
The list included:
- Raghunandan G, cofounder and ex-CEO of TaxiForSure
- Anand Chandrasekaran, director platform/product partnerships at Facebook
- Girish Mathrubootham, CEO and founder of Freshworks
- Anirudh Agarwal, director of Shree Sharda Group
- Nandan Nilekani, Infosys cofounder and non-executive chairman
- Anupam Mittal, founder and CEO of People Group
- Ramakant Sharma, cofounder of Livspace
- Arihant Patni, managing director of Ideaspring Capital
- Sunil Kant Munjal, Chairman of Hero Enterprise
The new year (2019) brought some relief for angel investors, with the government providing a simpler mechanism for startups to claim exemption from angel tax retrospectively. The previous norm of the inter-ministerial board approval of angel tax exemption for startups has been replaced by a simpler process.
Restrictions on the DIPP’s accredited investors whose investments could be liable for the exemption have been modified. According to the latest notification, an investor should have a net worth exceeding INR 2 Cr ($280K) or the amount of investment made/proposed to be made in the startup, whichever is higher, as on the last date of the financial year preceding the year of investment/proposed investment. The investor also needs to show a minimum income of INR 50 lakhs for his/her investments to qualify for the tax exemption.
The startup ecosystem welcomed the latest DIPP notification but stakeholders at large feel much more need to be done to safeguard startups from the menace. As the government and ecosystem enablers unite to support angels, they, in turn, are helping the cause of angel investments in the ecosystem.
Even as the war against the angel tax continues, 2019 might witness some legislative reforms that could shield startups from angel tax in the long term. And we can expect angel funding to flourish instead of declining.
Liked what you read so far? We have a lot more insights and data in our full report, which covers funding trends in Tier I, Tier II, Tier III cities, across 14 industries and sectors segregated by the funding stage. It also has details on average ticket size, investor types, and a lot more, for the period of 2018.Order The Report Now!