For Indian startups, 2018 has been a year of bouncing back as venture capital funding doubles

  • Indian startups have raised more money through VC fundings and financing, beating now listed companies that raised capital via IPOs this year.
  • While the startups raised nearly ₹449 billion in the venture capital (VC) funding rounds in 2018, nearly 25 companies listed on stock exchanges in India garnered ₹341.17 billion from investors.
  • Indian market regulator SEBI has been making amendments in regulations to provide IPO as a substitute to VC funding for startups.
2018 has turned out to be an eventful year for startup ecosystem. While several Indian startups are planning to tap the Initial Public Offerings (IPO) market as an alternative capital needs, they have already raised more money through fundings and financing via the venture capital route, beating other Indian companies that raised money via IPOs this year, CNBC reported citing data from research firm, VCCEdge.

Comparing the total amount raised by the companies under the two segments — startups getting funding under the Venture Capital (VC) and other companies listed under IPOs — stats show that while the startups raised nearly ₹449 billion in VC funding rounds in 2018, nearly 25 companies listed on stock exchanges elevated with ₹341.17 billion from investors.

In 2017, the companies listed under IPOs raised over ₹772 billion. On the other hand, the startup VC investments were found to be comparatively low, raising ₹243.47 billion.

The biggest company under IPO, Bandhan Bank, raised ₹44.7 billion from investors this year.

In fact, startups are forging ahead with nearly twice the Venture Capital ( VC) funding this year, as compared to 2017. Separately, the Security and Exchange Board of India (SEBI) has recently floated changes in the existing regulations for the startup ecosystem. With this, the regulatory body is looking to provide IPO as a substitute to VC funding.

However, the market regulator will release detailed guidelines by January 2019. It is also planning to launch a startup platform, with inputs from Bombay Stock Exchange (BSE), for its listing process across sectors — including Information Technology, e-commerce and biotech among others.

Unicorn club’

India, which is the third -largest for startup ecosystem in India, added 8 new unicorns to the list this year, adding up to 18 in total. Private companies with a valuation over $1 billion are the ones making to a ‘unicorn club’.

Under the venture capital funding, India’s recent unicorns raised ₹70 billion in its latest round of fundings from international investors such as Naspers and SoftBank among others. In fact, swiggy entered the ‘unicorn club’ just this year, accompanied by the homegrown food major, Zomato, which raised 13.99 billion from Alibaba Group’s subsidiary — Ant Financial Services.

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