Top 5 VC Firms Fuelling Startup Dreams In The City Of Dreams — Mumbai

The financial capital of India. The city of dreams. The island city. Mumbai has quite a few sobriquets, with at least a couple of them being derived from its business prowess and thriving film industry — Bollywood. However, Mumbai’s startup ecosystem hasn’t quite achieved the level of progress or status to merit a sobriquet.

After the funding winter of 2016, many startups had to shut shop in Mumbai’s Powai area, with a Quant report even terming it a ‘slow death’ of the city’s startup hub.

However, Mumbai has been able to maintain its lead in the top three cities (startup hubs), gaining the maximum funding for the last three years, thanks to the trust of notable venture capital firms in India. According to Inc42 DataLabs’ Tech Startup Funding Report 2018, Mumbai raked in $914 Mn funding across 143 deals upon the success of its rising stars such as Dream11, Novi Digital, BrowserStack, InCred, and PharmEasy, with the participation of 96 unique venture capital firms of India.

“While Bengaluru had taken an early lead in the Indian startup story, a lot of entrepreneurs from leading institutions in the area (Mumbai) as well as established product companies have chosen Mumbai as their launchpad city, and more continue to do so,” said Sasha Mirchandani, founder of Kae Capital and cofounder of Mumbai Angels, in a media statement.

Most of the early-stage venture capital firms in India have set up bases there and are making decent but cautious bets on the city’s startups.

As part of Inc42’s city-wise roundup of the top VCs in India’s biggest startup hubs, we put together the top five venture capital firms in Mumbai for you. And the winners are — Blume Ventures, which nabbed the top position with 22 deals, followed by Matrix Partners India (12 deals), Kae Capital (11 deals), India Quotient (9 deals) and Orios Venture Partners (9 deals).

Meet The Top 5 VC Firms From Mumbai

Blume Ventures

Blume Ventures is one of the oldest and most active venture capital firms in India with around 75 startups in its portfolio. Blume has invested in multiple sectors such as mobile applications, telecommunications equipment, data infrastructure, internet and software, consumer internet, as well as new-age technology startups such as blockchain and IoT.

With its Fund I and Fund II, Blume Ventures provided seed funding investments between $0.05 Mn and $0.3 Mn. It also provided follow-on investments to portfolio companies ranging from $0.5 Mn to $1.5 Mn. With its Fund III, the VC Firm has increased its ticket size to $500K-$1 Mn as it foresees round sizes becoming much bigger.

Last year (2018), Blume Ventures also tied up with two US-based funds, Benhamou Global Ventures (BGV) and Emergent Ventures, to launch a B2B (business-to-business) accelerator platform-cum-fund — Arka Venture Labs.

Matrix Partners India

Matrix Partners India is a franchise of the US-based Matrix Partners and has about $1 Bn under management with more than 60 startups in its portfolio. The venture capital fund comes into play at the seed, early, and early growth stages.

The VC firm is currently investing across emerging sectors such as SaaS, social media, ecommerce and marketplaces, surprisingly steering clear of the foodtech segment, which is on fire.

Matrix Partners India invests between seed and Series B initially in each company, primarily targeting the Indian market. It prefers to be the lead investor. It often invests on its own but also co-invests with other investors.

Kae Capital

Kae Capital invests in technology companies that bring innovative solutions to service the existing gaps in the market, backed by a great team. The fund particularly focuses on investing in innovation, leadership, and growth.

It picks startups from areas as varied as consumer Internet, marketplaces, fintech, logistics, healthcare, and SaaS-enabled business. So far, it has invested more than $78 Mn in about 50 companies.

Kae Capital prefers to be the first institutional investor in a company and usually comes in during the angel, seed, or Series A round.  On a median basis, it invests between $500K and $800K against a 20%-25% stake in the concerned startup.

India Quotient

A sector agnostic venture capital fund, India Quotient fund companies building disruptive businesses aimed at Indian consumers. This venture capital firm in India has been backed by some prominent investors such as Flipkart co-founder Binny Bansal, Singapore-based family office RB Capital and venture debt firm Anicut Capital founder Ashvin Chadha.

With its third fund, the venture capital firm increased its ticket size to $500K to ensure that the startups don’t have to go out in the market again for 18-24 months. Although sector-agnostic, it is putting in more focus on fintech, healthcare, consumer brands, social networks, and technology startups.

Orios Venture Partners

Orios Venture Partners is a seed-stage venture capital firm in India that primarily invests in India-focused consumer tech and non-tech startups and businesses. Orios claims that each investment is backed by continuous support in strategy, operations, marketing, and fundraising to help startups breakout cost-effectively and build loyal customers.

The venture capital fund makes 8 to 10 investments a year. In June 2018, Orios brought on board Anup Jain as a managing partner to beef up its top deck.

The Other Active VC Firms Of Mumbai in 2018 were

Unicorn India Ventures

ZNation Lab

Aavishkaar Venture Capital

Ankur Capital

Omnivore Partners

Things Look Up For Mumbai Startups

According to analysts, Mumbai has a lot of challenges, including high real estate costs and issues with hiring, tech, and product development. Also, due to the lack of local government support for long, the startup ecosystem here took its time to evolve.

But the situation is improving now. With the success of startups such as Upgrad, BrowserStack, InCred, Acko, Schbang, The Minimalist, the city’s startup ecosystem is undergoing a steady transformation.

In October 2018, the state Skill Development and Entrepreneurship Department also announced the setting up a network of 16 incubation centres in Maharashtra to promote entrepreneurship and innovation among students. Two of these will be set up in Mumbai.

With the biggest and the best venture capital firms in India still having their trust intact in the city, we hope Mumbai will continue to rake in high investments and nurture a stronger ecosystem in the years to come.