Early rounds saw 63% more money in 2021

Mumbai: An unprecedented funding boom last year led to an increase in early-stage deals, with 63% more capital flowing to companies in the seed and pre-Series A rounds compared to 2020, the company says. of venture capital InnoVen Capital.

Even though the number of deals increased by 30%, the average deal size increased by 20%, the sixth edition of its “Early-Stage Investment Insights Report 2022” showed.

The report focuses on investment activity through the seed and pre-Series A stages by analyzing market insights, as well as a survey of 20 top seed-stage institutional investors.

Funds such as 3one4 Capital, Blume Ventures, First Check Ventures, Indian Angel Network, India Quotient, Inflection Point Ventures, Kae Capital, Mumbai Angels, Omnivore, Orios Venture Partners, Stanford Angels, Sauce.vc, Aureolis Capital, Leo Capital, WaterBridge Ventures, Prophetic Ventures, Incubate Fund, Good Capital, Gemba Capital and YourNest Capital participated in the survey.

Investments worth $594 million were invested in start-up companies in 2021.

More than 67% of respondents surveyed invested more in 2021 than in 2020.

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According to the report, most of these investments were between $500,000 and $1 million.

“Seed deal valuations continued to rise, with 56% of deals closed in the $5-10 million valuation range,” he said in a statement.

While fintech, business-to-business (or B2B) platforms and enterprise software as a service (SaaS) emerged as the top three sectors for capital injection in 2021, more than 30% of Startups funded last year were at a pre-revenue stage, up from 20-30% in 2020, underscoring the companies’ maturity.

“Investors continue to bet on experienced founders, with 70% of founders having 5 to 10 years of experience. The number of repeat founders has also increased, with 29% of investors having more than 30% repeat founders in deals completed in 2021,” he said.

Concerns about a funding winter are real, with 47% of investors expecting deal activity to slow this year.

Interestingly, most start-up investors feel that the emergence of angel syndicates has been positive for the overall ecosystem.

“However, higher levels of seed-stage activity by large, established VCs have increased competition and pushed valuations higher,” the report points out.

Most investors have relied on the domestic pool of capital for their funds. In reality,

29% of them have 100% national sponsors (LP’s). Family offices and ultra-high net worth individuals are the top sources of domestic capital in the venture capital ecosystem, followed by funds of funds like SIDBI, he said.

“Early-stage investment activity has proven resilient in 2021 with larger deal sizes at higher valuations and an increase in the number of angel syndicates, all of which are clear indicators of a growing ecosystem. fully mature start-up phase,” said Tarana Lalwani, Partner, InnoVen Capital India. “Although market sentiment is showing slight signs of slowing down, we expect the seed funding environment to remain solid.”

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