Delhi Beats Bangalore & Mumbai In Startup Investments; 3 Reasons Investors Are Attracted To National Capital
As of June, 2016, India’s capital Delhi attracted more venture capital funds than all other Indian cities combined. In terms of VC money, total of $917 million was infused into Delhi-NCR startups across 155 deals, which more than 50% of the total venture capital infusion across India.
As per Tracxn’s blog, during the first half of 2016, 453 Indian startups attracted $1.8 billion of venture capital; and 50.95% of this overall capital was lapped up by startups based in Delhi alone.
With an average ticket size of $5.8 million investment, Delhi also tops the list of raking in maximum average investments. Ibibo Group based in Gurgaon tops the chart for Delhi-NCR as it received $250 million in Series C funding from Naspers, while Snapdeal is at #2 with investments of $200 million and LensKart is at #3 with investments of $601 million.
Some other highlights from the report:
- Bangalore is the most friendly city when it comes to early stage startups. Total of 96 deals materialized in Bangalore as angel funding and for seed stage startups
- Ahmedabad, Jaipur and Chennai are slowly turning out into major startup hubs, as these cities are attracting investments in middle-staged startups – notable being Stayzilla in Bangalore and CarDekho in Jaipur
- Ahmedabad, Chennai and Jaipur collectively attracted $34 million in funding across 30 startups
- Top 5 startup cities of India are: Delhi, Bangalore, Mumbai, Pune & Hyderabad
3 Reasons Investors Are Attracted Towards Delhi
a) IIT & Beyond: Besides intense rivalry between Snapdeal and Flipkart, what is the common feature among them? It’s IIT Delhi, whose passouts are co-founders of both Snapdeal and Flipkart. Besides, there is Paytm founded in Noida, Bluestone, MobiKwik, CashKaro and host of other startups which originated from Delhi and created a solid foundation for making Delhi India’s #1 startup destination. There is a reason Mark Zuckerberg chose IIT Delhi for town hall meeting.
b) Vibrant community: Compared to other Indian cities, Delhi boasts of a strong startup community which encourages collaboration and networking, leading to partnerships and more startups. Facebook groups such as Delhi Startups and Digital Defynd quickly scaled to become a full fledged community of entrepreneurs and innovators, which directly and indirectly fuels to startup movement in the city.
c) Population Advantage: Delhi NCR is world’s one of the largest urban agglomeration & India’s most populated region with a population of 4.6 crore. During 2011-12, Delhi-NCR churned out GDP of $128 billion, which was 7% of overall India’s GDP. Delhi NCR constitutes of New Delhi, Gurgaon, Noida, Faridabad and Ghaziabad; and besides New Delhi, each of these suburbs is a huge district in their own merit. When a startup gets such a huge geographic area to experiment with, then it automatically attracts investors’ attention, and the rest is history.