Ranjan Anandan, the managing director of Peak XV, said that Indian startups are expected to raise $8-12 billion this year while highlighting the country’s vibrant startup ecosystem.
In an interview with Startup Mahakumbh event, he stated that, in a country like India, where startups play a major role in the country’s economic growth, $ 10 billion or Rs. 80,000 crores of funding per year is sufficient enough to build a strong ecosystem.
According to Anandan, the annual investment rate of Indian startups before 2021 and 2022 was nearly about $8-10 billion. However, combining the years 2021 and 2022, India received a total funding of nearly $60 billion.
Last year, Indian startups received $7 billion in funding, which was comparatively low compared to people’s expectations. However, it’s important to note that this amount could have been zero, as we received six years’ worth of funding in just two years. This year, we aim to receive funding of $8-10 or $12 billion. India will develop an ecosystem that will maintain this level of funding and will go at a natural pace.
Anandan noted that approximately $20 billion of private capital remains uninvested and is ready for investment in private firms and startups in India, with a significant focus on AI as the primary focus for investors.
According to a report by Bain & Company and the Indian Venture and Private Equity Association (IVCA), startups that experienced significant growth and received enough funding between 2020 and 2021 will receive additional funding in 2024. This shows the acceleration of the startup ecosystem in India, where firms are willing to invest their money in startups.Â
Over the past five years, business-to-business and the manufacturing technology sectors accounted for nearly 56% of the new listings on the main board, as per the joint report by Boston Consulting Group and Matrix Partners, a venture capital firm.
India currently has nearly 20 publicly traded startups. This number will increase in the coming 7-8 years as more than 100 will go for initial public offerings, Anandan further added.
India currently has the third-largest startup ecosystem worldwide. However, the challenge is to become the No. 1 startup nation, surpassing the US and China in the coming five to six years.
