The Indian economy is growing leaps and bounds and despite the global geopolitical challenges, the country remains a bright spot for investors globally. According to recent report by GlobalData, a total of 920 VC funding deals were announced in India during January-October 2023, registering a decline of 38.6 percent in comparison to the 1,499 VC deals a year ago.
Despite this, many industry stakeholders believe that this is just a temporary or a cyclic phenomenon, which will result in weeding out of start-ups whose fundamentals are not strong.
In a recent conversation with Financial Express Online, Vikas Sharma, Head – Wealth Management & Private Banking, IDFC FIRST Bank said: “India has been an outlier the way the world is looking at us in terms of investment and ecosystem that we built. For instance, in 2022 when the interest rates were going up across the world we could still see investments coming into India. That talks about the confidence that everybody outside India has in addition to the domestic interest. While we can keep talk about funding winter the fact people talk about Whenever you start seeing some investments coming back particularly in start-ups India stands to benefit from the whole positive vibe about the country.”
Responding to the buzz around funding winter, Anas Rahman Junaid, MD and Chief Researcher, Hurun India said, “We have invested since 7 startups in the last 8-9 years, and have almost deployed $2 million (Rs 16 crore) through our investments. There is no funding winter from that perspective, the positive thing that happens you get companies at much better valuation.”
“I really believe that this is a cycle more than anything. More and more dry powder (funding) is ready and waiting to come to India, what we have to wait for is the US interest rates to slightly get down a little. If not more the same kind of capital (earlier investments) will be deployed in India. But yes there will be some things that will change hypothetically for example, instead of Edtech, it could be AI, ML, etc.”
Sharma added that it is difficult to put a timeline around it as it depends on various factors.
“Given the positive view that the world has around India, we will get the first-mover advantage and start to see the investments in the start-up ecosystem. We will tend to benefit from it.”
Both of them agreed on the fact that even if one does not take into account the geo-political situation, India has been a very attractive market. Domestic consumption, demography, infrastructure development, and push are “all signs of a positive growth economy independently of the global geopolitics.”
Source: The Financial Express
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