Private Capital
From few micro VCs backing Flipkart, Ola, others, how ecosystem has grown in number of investors, capital
21 Feb 2021

Investors such as Helion Venture Partners, which had put $800k in Flipkart back in 2008, earned 16.7x returns on its exit from the Walmart-owned company. Others including Orios secured around a whopping 375x returns on its 2011 angel investment of $156k in Ola while DSG Consumer Partners witnessed around 6x returns on its $1.25 million investment in OYO back in 2014.

The high-risk high-reward game at the seed stage level, which yielded handsome returns for early investors of Flipkart, Ola, OYO, Zomato, Swiggy, and others, has helped blossom the micro or seed venture capital ecosystem in India in the past few years. Angel, seed or micro funds, clubbed in the category of micro VCs, which usually have a sweet spot of $500k-2 million per deal, have grown from 29 in 2014 to 88 in 2020. The rise in micro VCs in India has been driven by the growing number of startups across sectors, the market gap between angel investments and mid-large size institutional investors. Domestic limited partners (LPs) have also joined the party for better return potential, small cheque size requirement, deep operational expertise, flexible deal terms, and co-investment opportunities, according to a report by Indian Private Equity & Venture Capital Association (IVCA), Amazon Web Services and Praxis Global Alliance. Some of the prominent micro VCs in India currently are 100X VC, Pravega Ventures, 9 Unicorns, Artha Venture Fund, and more.

The full article was originally published on Financial Express

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