You Are Likely To Receive Funding If Your Start-Up Belongs To These Sectors, Says IIT-M Report

The 10th Annual Report on Indian Venture Capital and Private Equity Report on ‘The Success and Impact of Start-Ups’ has been published by the Indian Institute of Technology, Madras. According to that, just around 0.5 per cent of the 12 lakh companies formed between 2000 and 2017 were able to generated venture funding.

According to Times of India, the report released at TiECON Chennai 2018 states that only three sectors receive 63 per cent of the total venture funding. The sectors include software, internet services, consumer products and services, financial technology, payments.

The companies established in towns and smaller cities have increased somewhere between 65 to 76 per cent in 17 years. The companies formed in Tier 1 cities specifically have seen a dip of 35 to 24 per cent. Quite naturally, the companies in the cities receive more venture capital as opposed to those in towns and smaller cities.

The location does not play a major role in receiving funds for the start-ups, the report says. This includes both, successive funding or in the quantum of funding.

Per Rs 100 crore, large companies employ about 35 people to work. In case of start-ups, it is worse, with 0.04 (ratio of 875:1). Hence, they must not be viewed as a sector that creates jobs, but rather one that demands innovation.