Is this what 2016 holds for startups in India?

It wouldn’t be wrong to call 2015 a year of startups. In fact, reports have suggested that the largest share of the investments pie last year belongs to these debutants in the country. According to market reports, a whopping $9 billion was invested in the startups last year. But this year would be different!

Market experts believe that 2016 would be a year of consolidation instead of investments. “Last year especially in the last quarter of 2015, we saw everybody investing in startups. But this year, investors will be more cautious with their funding,” says Sheetal Bahl, managing director of growX Ventures, an early seed investment firm.

He added that 2016 would be more of third and above funding rather than seed funding. “It won’t be much of Seed A or B funding but the later stages (Seed D & E),” noted Bahl.

Apart from minimal early seed funding, this category will also see many shut downs. According to experts, there have been several such sectors that saw many ‘me-too’ startup firms cropping up.

“One of them is definitely food technology. The sector has seen nearly 50 new players but not all can survive. I think only a handful will eventually play around in this category,” he noted. Other categories that saw a mushrooming of startups include on-demand concierge services, on-demand laundry services among others.

“At least, in on-demand laundry services, we alone got nearly 50 pitches but we decided to stay away from making any investment in this segment,” said Bahl. The company did around 18 funding in 2015 and aims to do around 5 to 6 funding in 2016. “ We do not have any set target but this year, most of the companies we had invested in, are looking at raising their third or fourth round of funding,” he stated.

Image Credit: Indiatimes.com