The document provides an overview of the startup landscape in India. It discusses that India has the 3rd largest startup ecosystem globally with over 4,200 startups in 2015. 59% of startups are focused on B2C models and Bengaluru, Delhi, and Mumbai account for 66% of all Indian startups. The key drivers of the ecosystem include India's large population, growing internet usage, and government support through initiatives like Startup India. The document also outlines some challenges around access to funding and regulations. It provides details on the different startup hubs within India and sectors seeing increased investment and activity.

1. Startup
Landscape
in India

2. Table of Contents
Investment Themes
Key Takeaways
Startup India in Numbers
Drivers and Inhibitors
Exit Opportunities
Startup Hubs in India

3. 3© 2016 BlitzLearning
Startup Landscape in India
India in numbers
India’s large young population and growing economy are providing various business opportunities and attracting large investments
from across the globe
Source: NASSCOM 10000 Startups Report
3rd largest startup
ecosystem
28% of the total
are technology
startups
4200+ startups in
2015
11500+ expected
by 2020
65000+ new jobs
created in 2014
250000+ new jobs
by 2020
B2C/B2B,
4%
B2B, 37%B2C, 59%
Focus
areas

4. 4© 2016 BlitzLearning
India ranks 3rd behind US and the UK in global startup ecosystems. 2015 saw increased startup activities and subsequent funding in
technology sector especially in B2C segment
Key Takeaways (1/2)
Landscape
 India saw 4200 startups in 2015 and is projected
to see over 11,500 by 2020
 Growing number of investors, growing digital
consumer base, stable political environment are
some of the factors driving the growth of startups
in India
 Internet of Things (IoT), analytics, health-tech, and
hyperlocal ecommerce are the areas of
investments
 Bengaluru, NCR, and Mumbai account for 66% of
all Indian startups
 Due to high share of web based services and
Cloud/SaaS startups, Bengaluru received highest
amount of funding (USD 2,516.4 MM) in the
period 2011-2015
 Hyderabad, Chennai, Pune, Jaipur and Ahmedabad
are the upcoming start up hubs
Verticals
B2C Segment:
 E commerce startups and aggregators are getting
maximum share of the investments. Hyperlocal
ecommerce and consumer services are seeing
maximum growth in this segment
B2B Segment:
 Niche e commerce and hyperlocal ecommerce are
growing the fastest hence are top funded in this
category. Analytics across consumer supply chain
recruitment is another high growth segment
Emerging verticals:
 IoT, health-tech, and payments are witnessing
strong growth and funding
 Robotics, 3D printing, Machine learning are few
disruptive areas which are expected to show high
growth
Funding
 Funding is estimated to grow at a rate of 125%
from USD 2.2 Bn in 2014 to USD 4.9 Bn in 2015.
Cumulative funding for the years 2010-14 was USD
3.2Bn
 Over 390 startups received funding in 2015 as
compared to 179 in 2014. Overall VC/PE funding
grew 2.2x in 2015 over 2014. Seed stage VC
funding grew 6.5x
 India is a hot investment destination for global
investors and corporates. Tiger Global, Sequoia
capital, Softbank, Warburg Princus and Alibaba are
some of the top investors spending over USD 500
MM
 Investors have access to more exit opportunities
with over 65 M&A deals worth USD 800 MM in
2015

5. 5© 2016 BlitzLearning
There is a strong support from academia, corporates and government to help grow startup ecosystem in India. Female
entrepreneurs are also being promoted
Key Takeaways (2/2)
Accelerators
 Incubators/accelerators grew 40% in 2015 from 80
to 110. Half of these incubators are setup outside
Bengaluru, NCR and Mumbai
 Academia and corporates are helping
entrepreneurs by setting up their incubation
centers
 New vertical focused incubation centers and
programs are in focus
Policies
 Government of India announced integrated
platform to promote entrepreneurial culture in
India
 A transparent framework is made for the
disbursement of Rs.10,000 crore startup fund
 Improved TDS system which allows startups to pay
tax at the end of the year rather than being
deducted at source
 The policies and programs such as “Startup India”
and “Make in India” aims to promote overall
startup ecosystem
 Government is making India a preferred nation for
investments and improving ease of doing business
and exit opportunities
Talent
 Startups are creating a new pool of high skilled
workforce
 Top executives from MNCs are either joining high
growth startups or setting up their own startups
 India is the youngest startup nation in the world
with 72% of the founders being 35 years in age
 Female entrepreneurs are rising at a fast pace.
2015 saw a rise of 50% in the share of female
owned startups over 2014. Funding to female
startups grew 4.5x in 2015 over 2014
 Startups are offering unconventional and fun filled
work environment along with attractive monetary
benefits

6. 6© 2016 BlitzLearning
2015 saw investments and startups in market place tools, DIY e- commerce & enablers, content and discovery, and segments of B2C
and 2016 will continue likewise
Investment Themes Over the Years
India and Global
Source: Desk research
Deals/Locations
Gaming
Photos/Mobile
Social
Hardware/Marketing/B2C
Messaging/ Bitcoin/Listicles
Crowd funding/Big Data+ SaaS/
Sharing
2008
2009
2010
2011
2012
2013
2014
Vertical E commerce
E commerce
Recharge/ Logistics
Adv/ Networks
Marketplaces/B2C/Discovery
Payment gateways/ Coupons/
Price comparisons
SaaS/ Online cabs/ Accelerators
Facebook
Twitter
Zynga
Foursquare
Groupon
Pinterest
Instagram
Airbnb
Uber
WhatsApp
Buzzfeed
Facebook
Twitter
G
L
O
B
A
L
I
N
D
I
A

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Drivers and Inhibitors
Source: Desk research, 2015 India technology Product M&A Industry Monitor Report
 Fast growing middle class.
583 MM expected in 2025
 300 MM internet users (2nd
Highest in the world) and
15-20 MM users transacting
online
Large Domestic Market
1
 Average investment in 2010
was $4.2 Mn which reached
over $11 Mn in 2014 2014.
 Over 70 active VCs/PEs and
550 angel investors
 Over 80
incubators/accelerators.
Evolving Investor Ecosystem
2
 Long sales cycle is one of the
biggest challenge for
startups in India.
 After sales support post
contract is draining the
startups.
Long Sales Cycles1
 Although late funding has
grown but getting seed
funding is still a tough task.
 Funding challenge is not
merely limited to seed
rounds, but also for vital
Series A and B rounds.
Seed Funding2
 Regulations and
bureaucracy are often said
to be big and inefficient in
India.
 Myriad laws and regulations
means it takes about 30
days to comply compared to
just 9 days in OECD
countries.
Stringent Government
Policies
3
 Lot of whitespaces in the
areas of robotics, 3D
printing, machine learning.
Whitespaces
3
 190 tech M&As with a total
deal value of $2.27 Bn in the
period 2011-15.
 Domestic transactions
accounts a majority of 72%.
Increased M&A activities
4
Drivers
Inhibitors

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Startup Hubs in India (1/2)
Major Cities
Source: iamwire, “Tech startups in India- A Bright Future”
Owing to well established infrastructure and high skill pool, 67% of the startups are concentrated in 3 cities. Other major cities in tier
1 and tier 2 are also getting hot for startups
M
a
j
o
r
C
i
t
i
e
s
 Bangalore hosts 28% of the total startups primarily focused on eCommerce, Hyperlocal eCommerce, Consumer Services & Analytics
• Incubators/Accelerators: Accel Partners, Sequoia Capital, Nexus Venture Partners, Inventus Capital, IDG Ventures, Ascent Capital, Bessemer Venture Partner
• Startups: Myntra, Flipkart, BigBasket, ZoomCar, HackerEarth, FreeCharge,Ola, Quikr and InMobi
 Delhi/NCR holds 24% of the startups focusing on eCommerce, Hyperlocal eCommerce, eCommerce Enablers & Aggregators
• Incubators/Accelerators: Sequoia Capital, Peesh Venture Capital, Helion Venture Partners, LightSpeed Venture Partners, SAIF Partners
• Startups: Snapdeal, Paytm and Grofers
• Delhi/NCR has seen 52 e-commerce startups raising capital since 2011
 Mumbai is the home of 15% of the startups mainly from eCommerce, Hyperlocal eCommerce, eCommerce Enablers & Aggregators
• Incubators/Accelerators: Helion Venture Partners, Sequoia Capital, Nexus Venture Partners, IDG Ventures, Kae Capital, LightBox, Matrix Partners, Norwest
Venture Partners
• Startups: Housing, ClearTrip, TinyOwl, Instamojo
 Hyderabad hosts 8% of the total startups and is the headquarter of companies such as Facebook and Microsoft
• Incubators/Accelerators: SRI Capital, Venture, SEAF India, BitChemy Ventures
• Startups: Mapmygenome, AppVirality, MartMobi
 Chennai holds 6% of the total startups and is growing fast as an startup hub
• Incubators/Accelerators: VenturEast, TVS Capital, Peepul Capital, Fulcrum Venture
• Startups: ZOHO, Freshdesk, Unmetric and InterviewStreet

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Startup Hubs in India (2/2)
Flow of Funds Into Indian Startups During 2011 -2015
Source: iamwire, “Tech startups in India- A Bright Future”
Bangalore raised the highest amount during 2011-2015 mainly towards startups providing web based services
Cities Delhi/NCR Bangalore Mumbai Hyderabad Chennai
Funds Raised ($MM) 1061.18 2516.42 2017.35 178.21 565.67
No. of Startups that Raised Funds 236 311 199 45 55
Web-based Services 108 112 87 19 22
Net Classifieds/Listings 12 12 17 5 4
Mobile Tech 28 56 24 5 5
E-commerce 52 45 34 8 9
Digital Media 6 10 10 0 1
Cloud/SaaS 26 64 17 6 11
Big Data 4 12 10 2 3
With 4200-4400 startups, India only behind UK with over 4800-5000 technology driven startups. US, tops the chart with over 47,000
technology driven startups In 2015

10. 10© 2016 BlitzLearning
Exit Opportunities
Who Can Acquire Whom?
Source: Logos are taken from internet (Not to be used for any commercial activities. Only for representation purpose)., “Tech startups in India- A Bright Future”
With relaxed exit norms, market will slowly consolidate by increased M&A activities. Large firms are acquiring Indian startups for
talent and technology
Consolidation
The startup ecosystem in India is witnessing two types of consolidation
 Enterprises acquiring startups: Large enterprises are acquiring startups mainly for talent acquisition and to add technology to their existing
portfolio. Companies like Facebook, Google, Yahoo are interested in hiring talent from India through such acquisitions.
 Startups acquiring startups: Startups are acquiring other startups to accelerate growth and enhance their customer base.
• Private labels
• Niche ecommerce players
Possible Acquisition Targets
• Niche e commerce players
• Events and ticketing
• Online cab services
• Travel experiences
• Travel experiences
• Trip planning
• Travel content players

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