A 2013 Quarter 1 report on the Indian Startup Space in terms of Angel/VC funding. The report is developed by YourStory Research.

1. India Startup Digest
Q1 2013- Angel/VC Funding
2 April 2013
YS Research
India Startup Digest Q1 2013, Page 1

2. Background to the report
2012 was an exciting year for the Indian startup ecosystem. The momentum built
over the past couple of years intensified. Investor interest increased in Indian
startups. More than 200 deals worth more than $700 million were sealed.
Qualitatively, emerging startups show high levels of maturity which should have a
positive impact on funding.
Funding activity is by no means an indicator of success but is a good proxy for
business viability tracking.
In this report, we provide a synopsis about the startup space in India in the first
quarter of 2013 with our insights.
YS Research
India Startup Digest Q1 2013, Page 2

3. Overview
71 deals were announced in the first 3 months of 2013, out of which the funding
amount for 33 were disclosed (16 of these were acquisitions).
Declared investments total to $140 million. Along with smaller seed rounds our
estimates are that India witnessed a total funding activity of $160 million in Q1
2013.
Note: This relates to deal info till March 2013.
Monthwise
funding
amount
and
number
of
deals
$
70 $
68
$
56
$
53
$
35
29
26
$
17
$
18
16
$
0
January February March
Funding
Amount
($
million)
No.
of
deals
YS Research
India Startup Digest Q1 2013, Page 3

4. 62% of the deals were seed/angel stage investments. Another 5% involved bridge
rounds, deal creation and loans. The rest of the deals are undisclosed. A breakup
of the disclosed deals is given below:
4% 14%
7%
11%
18%
46%
Acquisition Angel/Seed Series A
Series B Series C Series D
YS Research
India Startup Digest Q1 2013, Page 4

5. Sector wise analysis
Healthcare and eCommerce were the most favored categories with investments
of $42.44 million and $40.51 million respectively.
Healthcare saw 10 deals (3 undisclosed) and probably took top spot because
inherently the sector needs more funds per investment.
eCommerce came in close second with $41 million with 7 deals (2 undisclosed).
Consumer Web and Education took a distant third with $13.72 million (10 deals
with 5 undisclosed) and $13 million (7 deals with 2 undisclosed) being put in
respectively.
50
38
25
13
0
Funding in millions
Cloud Consumer Web eCommerce
Education Finance Gaming
Healthcare Mobile Payment
Travel
YS Research
India Startup Digest Q1 2013, Page 5

6. Healthcare
Of the 10 deals, three were seed stage investments - Drishti Eye Care, iKure and
Biosense.
Seven others were Series A and beyond (Richcore Lifesciences, ASG Eye
Hospitals, Perfint, Nueclear, Strand Lifesciences, and LifeCell International).
In addition, Core Diagnostics was funded by Artiman Ventures via deal creation.
Deal creation is a kind of an investment wherein the investors put out a business
idea and select a team around the idea to execute it.
Of the players, Perfint closed the biggest deal - $11 million - in series D from
Norwest Venture Partners.
e-commerce
Despite all the bad press, the e-commerce space saw 7 deals signed off worth $41
million (2 undisclosed).
e-commerce is now in a consolidation and restructuring phase wherein we expect
more mergers and bigger investments being pumped into companies that have
managed to stabilize.
There were four seed stage deals while the others were Series A and beyond.
Zovi and Lenskart took away $10 million and $9.86 million respectively.
Consumer Web
The consumer web saw an infusion of $13.72 million in a total 10 deals. Eight of
these were in the seed stage.
Notably, Zomato saw a $10 million Series C from Info Edge, the owners of
Naukri.com.
YS Research
India Startup Digest Q1 2013, Page 6

7. Education
Education saw 7 deals worth $13.05 million out of which 5 were in the seed stage.
Meritnation scored the biggest deal with $5.5 million, again from Info Edge.
YS Research
India Startup Digest Q1 2013, Page 7

8. Analysis by location
0 15 30 45
60
Bangalore
Chennai
Hyderabad
Mohali
Mumbai
NCR
Rajasthan
Funding in millions
The top 3 hot spots were still Mumbai, Delhi NCR and Bangalore. Mumbai saw
the maximum number of deals with 18 closures, but Delhi saw the highest
infusion of funds at $51.63 million.
Location Deals Amount
Delhi NCR 12 $51.63 million
Mumbai 18 $39.74 million
Bangalore 8 $26.65 million
YS Research
India Startup Digest Q1 2013, Page 8

9. Other news
Q1 2013 saw some interesting investments in key growth sectors.
Amongst other ecosystem factors affecting funding, NASSCOM setup up a
framework to get 10,000 startups. To further interest in entrepreneurship,
NASSCOM also had a high profile event where Eric Schmidt addressed key
ecosystem players.
Another trend was the rise of startup incubators and accelerators.
GSF opened up applications for the second match, TLabs announced startups for
it’s 3rd batch, Wharton India Economic Forum concluded, Venture Nursery
opened up applications, TLabs announced batch 3, Microsoft Accelerator
announced batch 2, and the oldest, The Morpheus are well into their 9th batch
now.
The World Startup Report was launched along with the India Startup Report this
quarter.
Overall, the momentum in the startup ecosystem is strong, and with some of the
macro-economic factors expected to ease out, we expect a stronger Q2.
YS Research
India Startup Digest Q1 2013, Page 9