VC investors are far more selective with their bets in India: Report

Venture capital investors in Asia’s third-largest economy are choosing to be far more selective while placing their bets, as they seek strong exits from their portfolio companies, according to a recent report co-authored by Bain and Company and the Indian Venture Capital Association.

According to the report, with the venture capital landscape in India moving from the scale up phase to the maturing phase, the ecosystem is now bigger funds participating, while corporate venture capital firms also choosing to increase their presence in the country.

This has resulted in improving exit records shown by VCs and a growing belief that the exit momentum will only pick up pace over the next 5-6 years. As per the report, about 80% of startup entrepreneurs anticipate investor exits by 2024.

The report also calls out the role played by regulator authorities as well as by quasi-governmental institutions, such as SIBI, in ensuring the increasing ease of doing business in India, geography not previously known for such.

However, the country’s startup ecosystem continues to lag significantly behind those of the United States and China, across various metrics, including, size of funding, overall ease of doing business and total funded tech start-up base, among others.