An Angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. India’s Delhi – (NCR) have become the most preferred choice for angel investment groups such as Indian Angel Network (2015-2016) and has overtaken and beat counterparts in Bengaluru, the Information Technology hub and unofficial startup capital of the country.
According to a report by InnoVen Capital, a Mumbai-based venture debt owned by Temasek- the Singapore government’s investment company it is found that a 62% increase in the angel investment size last year. Close to Rs 114 crore was committed across 69 deals by angel groups, as compared to the 2014-15 figure of Rs 70 crore across 47 deals. These groups had increased investments in startup companies over the year. Moreover, it was found that majority of the investments were drawn by startups that had a clear road map for generating revenues.
Ajay Hattangdi, CEO, InnoVen Capital said
“While there might be a funding slowdown in the late-stage investment space, the reverse can be seen in the angel space. Valuations and funding rounds have gone up and there are a greater number of investors coming to the table to invest in early-stage startups. This is an important trend to note and will give a sense of optimism to a great number of companies.”
Compared to the previous year’s Rs 9 crore the average valuation of the companies were rose by 10% nearly Rs 10 crore. Data on startups funded in 2015-16 covers 69 deals and 67 companies. These startups also got better valuation than firms who raised money in the past.
The Delhi-NCR region accounted for 36% of angel deals, with 25 deals in 2015-16. In Bengaluru, the number of deals was 14 and in Mumbai nine. The deal values were similarly distributed. Last year, Delhi was behind Bengaluru and Mumbai, accounting for only 16% of the total angel deals. Bengaluru took 29% and Mumbai 24%.
Consumer internet and mobile emerged on top with a total investment of Rs 21.2 crore across 14 deals, followed by IT/ITeS with Rs 19.5 crore across 10 deals in te4rms of sectors .The E-commerce startups had the highest average deal size of Rs 2.33 crore. Food tech firms, which saw a bloodbath last year, continued to get funded in the early stages, and raised a total of Rs 14.92 crore in the early stages.
The study indicated that the failure rate of startups that are angel funded have reduced from one in five in fiscal 2012 to 8% in 2014.