India Startup Digest Q1 2013- Angel/VC Funding

2 April 2013

YS Research India Startup Digest Q1 2013, Page 1

Background to the report

2012 was an exciting year for the Indian startup ecosystem. The momentum built

over the past couple of years intensified. Investor interest increased in Indian

startups. More than 200 deals worth more than $700 million were sealed.

Qualitatively, emerging startups show high levels of maturity which should have a

positive impact on funding.

Funding activity is by no means an indicator of success but is a good proxy for

business viability tracking.

In this report, we provide a synopsis about the startup space in India in the first

quarter of 2013 with our insights.

YS Research India Startup Digest Q1 2013, Page 2

Overview

71 deals were announced in the first 3 months of 2013, out of which the funding

amount for 33 were disclosed (16 of these were acquisitions).

Declared investments total to $140 million. Along with smaller seed rounds our

estimates are that India witnessed a total funding activity of $160 million in Q1

2013.

Note: This relates to deal info till March 2013.

$  0

$  18

$  35

$  53

$  70

January February March

$  68

$  56

$  17

2926

16

Monthwise  funding  amount  and  number  of  deals

Funding  Amount  ($  million)No.  of  deals

YS Research India Startup Digest Q1 2013, Page 3

62% of the deals were seed/angel stage investments. Another 5% involved bridge

rounds, deal creation and loans. The rest of the deals are undisclosed. A breakup

of the disclosed deals is given below:

14%

46%18%

11%

7%4%

Acquisition Angel/Seed Series ASeries B Series C Series D

YS Research India Startup Digest Q1 2013, Page 4

Sector wise analysisHealthcare and eCommerce were the most favored categories with investments

of $42.44 million and $40.51 million respectively.

Healthcare saw 10 deals (3 undisclosed) and probably took top spot because

inherently the sector needs more funds per investment.

eCommerce came in close second with $41 million with 7 deals (2 undisclosed).

Consumer Web and Education took a distant third with $13.72 million (10 deals

with 5 undisclosed) and $13 million (7 deals with 2 undisclosed) being put in

respectively.

0

13

25

38

50

Funding in millions

Cloud Consumer Web eCommerceEducation Finance GamingHealthcare Mobile PaymentTravel

YS Research India Startup Digest Q1 2013, Page 5

Healthcare

Of the 10 deals, three were seed stage investments - Drishti Eye Care, iKure and

Biosense.

Seven others were Series A and beyond (Richcore Lifesciences, ASG Eye

Hospitals, Perfint, Nueclear, Strand Lifesciences, and LifeCell International).

In addition, Core Diagnostics was funded by Artiman Ventures via deal creation.

Deal creation is a kind of an investment wherein the investors put out a business

idea and select a team around the idea to execute it.

Of the players, Perfint closed the biggest deal - $11 million - in series D from

Norwest Venture Partners.

e-commerce

Despite all the bad press, the e-commerce space saw 7 deals signed off worth $41

million (2 undisclosed).

e-commerce is now in a consolidation and restructuring phase wherein we expect

more mergers and bigger investments being pumped into companies that have

managed to stabilize.

There were four seed stage deals while the others were Series A and beyond.

Zovi and Lenskart took away $10 million and $9.86 million respectively.

Consumer Web

The consumer web saw an infusion of $13.72 million in a total 10 deals. Eight of

these were in the seed stage.

Notably, Zomato saw a $10 million Series C from Info Edge, the owners of

Naukri.com.

YS Research India Startup Digest Q1 2013, Page 6

Education

Education saw 7 deals worth $13.05 million out of which 5 were in the seed stage.

Meritnation scored the biggest deal with $5.5 million, again from Info Edge.

YS Research India Startup Digest Q1 2013, Page 7

Analysis by location

The top 3 hot spots were still Mumbai, Delhi NCR and Bangalore. Mumbai saw

the maximum number of deals with 18 closures, but Delhi saw the highest

infusion of funds at $51.63 million.

Location Deals Amount

Delhi NCR 12 $51.63 million

Mumbai 18 $39.74 million

Bangalore 8 $26.65 million

0 15 30 45 60Bangalore

ChennaiHyderabad

MohaliMumbai

NCRRajasthan

Funding in millions

YS Research India Startup Digest Q1 2013, Page 8

Other news

Q1 2013 saw some interesting investments in key growth sectors.

Amongst other ecosystem factors affecting funding, NASSCOM setup up a

framework to get 10,000 startups. To further interest in entrepreneurship,

NASSCOM also had a high profile event where Eric Schmidt addressed key

ecosystem players.

Another trend was the rise of startup incubators and accelerators.

GSF opened up applications for the second match, TLabs announced startups for

it’s 3rd batch, Wharton India Economic Forum concluded, Venture Nursery

opened up applications, TLabs announced batch 3, Microsoft Accelerator

announced batch 2, and the oldest, The Morpheus are well into their 9th batch

now.

The World Startup Report was launched along with the India Startup Report this

quarter.

Overall, the momentum in the startup ecosystem is strong, and with some of the

macro-economic factors expected to ease out, we expect a stronger Q2.

YS Research India Startup Digest Q1 2013, Page 9