Analysis of venture capital investments in India

Abstract

Today, venture capital companies have become omnipresent alternative means of financing. The technology and information industry is the most targeted by these companies. Over the past decade, the venture capital market has grown tremendously. Record investment operations worldwide have been carried out in the United States, Europe and emerging countries like India. In 2018, it was found that approximately $254 billion had been invested in 18,000 startups worldwide through venture capital financing. This is an increase of approximately 46% over the 2017 figures, 52% of which comes from the United States, which remains its dominant market with $131 billion invested. Venture capital is an exceptional means that gives innovative companies the opportunity to increase their growth and expand their market share. Venture capital is not always a cash investment but can also be provided in the form of technical or management expertise. “India has woken up to potential of startup ventures with great enthusiasm and energy. In the past few years they have grown exponentially”, stated PM Narendra Modi at the India-US Startup Konnect 2015. India’s Prime Minister refers to the outstanding development of startups in India during the last decade. According to the KPMG 2019 report on the Indian startup ecosystem, the number of startups in India has skyrocketed from 7,000 in 2008 to 50,000 in 2018. Some of the reasons of this boom is India currently being the fastest growing economy, the democratization of internet access in the country, education, the initiative of the government but also the fast growth of the VC industry.