VCs Earned 4.5x ROI In Indian Startups In Last 15 Years: Report Besides capital, venture capitalists add a lot of value to the companies they fund through sharing knowledge of governance, financial prudence and networks
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Venture capital has played a central role in helping Indian startups scale to the $100 million revenue milestone. On average, VCs have been able to make 4.5 times of their investments in the startup space in the last 15 years, according to a new report released by consultancy firm Redseer Strategy Consultants.
As per the report, VCs have invested about $143 billion over the last 15 years (CY08 to CY22) in the startup ecosystem, which is currently valued at $804 billion. Besides capital, investors add a lot of value to the companies they fund through sharing knowledge of governance, financial prudence and networks.
The report also delves into the time taken by startups to reach the coveted $100 million revenue benchmark. "There are about 100 unicorns and 170 soonicorns in India. Of these 270 companies, over 40 startups in fintech, e-commerce, and logistics have crossed over $100 million revenue as of FY22. These startups have taken anywhere from 5 to 12 years to reach this scale. With the ecosystem maturing in the last decade, the time taken to reach the $100 million mark has decreased significantly. What took 18 years in 2000 to reach $100 million revenue has come down to 5 years in 2017," it stated.
"Redseer's toolkit tackles various challenges faced by startups in the journey to $100 million revenue. Customized solutions from TAM expansion, product market fit, to improve profitability and operational efficiency, our industry experts help startups scale to desired heights and solve their challenges," said Rohan Agarwal, partner, Redseer Strategy Consultants.
India has about 12,000 startups ranging in revenue classification from 'emerging' (less than $10 million), 'growth stage' ($10–100 million), to 'large' ($100 million to over $1 billion). Most startups face scaling challenges in their growth journey on account of poor profitability and bottlenecks with organization, governance, and operations. Since VCs help overcome many of these issues, their support to Indian startups transcends financial aid.
