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VC’s Pouring in Enough Money for Niche Products and Platforms

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According to industry experts, VC firms these days are on a high spree of funding in deep technology startups, in the wake of has seen a spurt with investors and VC firms pooling in more money in higher number of funding rounds in the past year as their appetite for niche products and platforms is growing significantly. Experts are of the view that higher technology expertise, global ambitions and more availability of ‘patient’ capital could have been one of the key reasons.

Research from startup information following stage Tracxn said speculations worth $697 million, spread crosswise over 115 rounds, have been made in profound tech new businesses so far this year, as against subsidizing worth $832.16 million of every 243 adjusts in 2018, and $355 million out of 256 financing rounds in 2017.“Like consumer and fintech startups in the past, a critical mass is now building up in the deep technology space… The quality of founders and those wanting to go global has also greatly increased and that makes a big difference to valuations that businesses can command,” said Ganapathy Venugopal, CEO of Axilor Ventures.

The connectivity of deep tech startups to ‘patient’ capital that is willing to stay invested without immediate results has also increased, according to some investors. “There is capital that is willing to take risks and fund, and these are not just Indian investors — includes Japan, China, Europe or South East Asia, US,” said Sateesh Andra, MD at Endiya Partners.

A natural evolution in technology cycles in India is a key reason for the spurt, Andra added. “The combination of returning Indians from the US and Europe and local talent, which has worked in core multinational companies in R&D, and young graduates who have a deep understanding of this technology — this now forms the talent pool… previously, that kind of technology was available only in the (Silicon) Valley,” said Andra.

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