Marquee merchants are looking to revive India’s startup scene.
Matrix Partners India, which backs unicorns savor Ola and Razorpay, is setting up $450 million (Rs3,522 crore) for its fourth and finest India fund yet. The switch comes per week after Sequoia Capital stated it became raising a $2.85 billion corpus for southeast Asia, of which $2 billion would tear to Indian startups.
Earlier this year, various US-essentially based entirely firms savor Accel (backer of Flipkart and Swiggy) and Elevation Capital (Paytm and Unacademy), too, anguish up their finest-ever India funds and raised over half of-a-billion greenbacks each. Lightspeed Project Partners, which closed a $275 million fund in 2020, is taking a look to nearly double its contemporary India fund.
This “fundraising supercycle,” which a January document in CapTable had predicted, comes amid a funding iciness that left the valuations of India’s budding firms battered. Most firms that went public over the last year, barring beauty e-tailer Nykaa, are procuring and selling below checklist prices.
The roadblocks for VCs investing in Indian startups
One key aspect quiet eludes India’s startup ecosystem: frequent, profitable exits. Of the more than 200 investments it has made, Matrix Partners India has clocked only 14 exits—a couple of them at mammoth losses.
Besides, merchants face company governance components in India’s onerous regulatory ambiance. For occasion, Sequoia’s most contemporary fund became delayed after its portfolio firms were caught in controversies. These encompass the one involving finech firm BharatPe’s founder Ashneer Grover and the financial irregularities at social commerce company Trell.