Mumbai: Angel investments in India’s startups have hit a five-year high in the current financial year with the Delhi-National Capital Region (NCR) becoming the most preferred destination, accounting for 36 per cent of the total deals.
According to India Angel Report 2016 released by Innoven Capital, a leading venture debt firm, angel investors executed 69 deals worth Rs 113.6 crore in FY16, 62 per cent higher than 47 deals inked in FY15 with a total commitment of Rs 70.3 crore.
While NCR overtook Bengaluru as the preferred city growing two times over FY15, angel group funding to startups outside the top three metro cities grew by 74 per cent. Bengaluru accounted for 20 per cent of the total deals whereas Mumbai, Hyderabad and Chennai accounted for 10 per cent, 9 per cent and 5 per cent respectively.
Reflecting India’s place as one of the largest consumer markets in the world, business-to-consumer (B2C) startups attracted over two-thirds of angel group investments, with consumer internet, food and e-commerce as top sectors.
In the business-to-business (B2B) space, startups in IT or ITES, marketing and advertising sectors received majority of the investments. A major portion of the angel funding has gone into companies that were more than two-years old suggesting investors preference for cash generating ventures.
As per the data compiled by Innoven Capital, 49 per cent of the investment was directed towards firms, which were more than two years old while only 11 per cent of the investment went into companies less than six months old.
The report also revealed that startups on an average had two co-founders, and one-fourth of all startups in the sample had at least one female co-founder. On an average, startup founders had eight years of experience prior to starting up and 28 per cent of all founders were found to be serial entrepreneurs. Looking at academics, 67 per cent of were engineering graduates and the majority of them had an MBA.
