Starting A New Business? Here Are The Sectors That Pick Up Funding Most Easily

Employees at an IT startup in Bengaluru (Hemant Mishra/Mint via Getty Images)

The Indian Institute of Technology, Madras (IIT-M) in its Tenth annual report on 'The Success and Impact of Start-Ups' has said that only around 0.5 per cent of the 1.26 million companies established during 2000-17 were able to get venture funding, Times of India has reported.

The report which was released during Tiecon Chennai 2018 states that consumer products, software and Internet services, Fintech and payments sectors account for the 63 per cent of the companies which received venture funding.

The proportion of companies established in Tier 1 cities from 2000-17 has decreased from earlier 35 per cent to 24 per cent and the proportion of the companies formed in smaller cities and towns in the same period has grown to 76 per cent from 65 per cent.

The report also stated that even though large cities account for only 32 per cent of the start-ups, they still secure 89 per cent of the total angel or venture funding.

Factors like sector and age of the start-up cease to matter for funding as the companies mature and their demonstrated performance outweighs other considerations.

Software and internet services, consumer products, health tech sector startups have higher chances of availing a first-round funding compared to other sectors, said the report.

The report also states that the location of the start-up played no significant role in getting successive funding or amount of funding.

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