Sharp rise in Micro VC investments as 566 startups get $341 mn in 3 years

With the startup ecosystem blooming in India, the number of such funds rose from 29 in 2014 to 88 funds last year

With India seeing the birth of several hundred start-ups every year, small venture capital (VC) funds have emerged as promising players. Micro VC flow increased 20 per cent in 2020 to $139 million from $116 million a year ago. The number of deals increased to 88 from 82 in 2019.
 
Micro VCs — those with fund size below $30 million — have infused $341 million into the space through 730 deals across 566 start-ups in the past three years, according to a report by Indian Private Equity and Venture Capital Association and Amazon Web Services co-authored with Praxis Global Alliance. With the start-up scene blooming in India, the number of such funds has increased from 29 in 2014 to 88 funds last year. The report is based on responses from around 50 micro VCs.
 
These VCs typically invest in the sunrise sectors, and around 60 per cent of these investments last year were in the SaaS/AI sector, consumer apps and platforms, e-commerce, and listing platforms.
 
Of those surveyed, 52 per cent are sector-agnostic, focusing on SaaS, BFSI, health care and life sciences as major investment verticals.