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Funding Landscape is Changing: You need to learn the new rules:

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If you were inspired by the funding of startups or startups making it big in the last 2-3 years, you were falling prey to an impractical rosy picture. The funding landscape is changing and you will have to understand the the new paradigm and how you can create a successful, fund-able startup,
in the current and coming years. The key points are:
-> Understanding the shift in startup funding paradigm
-> The change in the key factors (unit economics, CAC,
LTV etc.) that would make your startup fund-able
-> How a small startup can prepare (documentation, the
process etc.) itself to get funding.
-> How to connect to angel investors.

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Funding Landscape is Changing: You need to learn the new rules:

  1. 1. Agenda: Snapshot of Funding Landscape Recent stories: Tinyowl, Local Banya, Grofers To worry or not Adapting to the change Preparing to get funded
  2. 2. 1000 Deals $9 Billion Total Investment $9 Million Avg. Ticket size 2015 300 Deals $5 Billion Total Investment $16 Million Avg. Ticket size 2014
  3. 3. Investor No. Of Deals Sequoia 46 Tiger Global 35 Accel Partners 33 Saif Partners 26 IDG Ventures 32
  4. 4. Company Investors Investment Grofers Sequoia, Tiger Global, Softbank $120 M Ola Tiger Global, Didi Kuaidi, Softbank, DST Global $500 M Oyo Rooms Softbank, Greenoaks, Sequoia, LSVP $100 M
  5. 5. Sector Companies Online Commerce Shopclues, Pepperfry, Urban Ladder, Flipkart, Snapdeal Hyperlocal & On- demand Grofers, Swiggy, Urban Clap, Housejoy, Tinyowl, Faasos, Foodpanda Logistics Ecom express, Gojavas, Delhivery,Blackbuck, Rivigo
  6. 6. Sector Companies Transport Ola, TFS, M-tai, baxi, jugnoo, Shuttl, ZipGo Budget Hotels Oyo Rooms & Zo Rooms Media & Content Yourstory, Scoopwhoop, Newshunt
  7. 7. Sector Companies Health-tech Practo, Lybrate, Doctor 24x7... Edu-tech Byjus classes, IndiaCollegeSearch Fin-tech Paytm, Mobikwik, Lendingkart, Freecharge
  8. 8. Investor Fund Size Accel Partners $ 300 Mil Kalaari Capital $ 300 Mil IDG Ventures $ 200 Mil Nexus Venture Partners $ 450 Mil Saif Partners $ 350 Mil Lightspeed $ 135 Mil
  9. 9. 350 Mil 40 Mil E-commerce Transactions $86 Bil Internet users shopping online Brazil: 35% China: 50% Sri Lanka: 60% 550 MilInternet Users 200 MilOnline Purchasers $22 Bil India: 11% Today 3 Years later
  10. 10. Pain Point: Unit economics
  11. 11. Pain Point: High Capex
  12. 12. Pain Point: Low Adoption
  13. 13. • Founders need to drive at 300 kmph • Moderation is required. It’s an international phenomena. • Early stage deals are relatively easier. Series A and beyond is the challenge. • Consolidation is good in long-term • Boom in e-commerce supporting sentiment across other industries • More than 5 Unicorns in India • Startups a good alternative investment for HNIs • Successful exits for investors in Freecharge, TFS, CommonFloor • SD, Zomato founders pumping money into startups • New fund launches
  14. 14. • Identify the problem you are solving • Need and paying ability of consumers • Is the market big enough? • First mover advantage is not enough • Differentiation & USP • Barriers to Entry • Customer Experience • Scalability • Unit economics & Operating margin* • Customer acquisition costs • Consolidation vs. Aggressive expansion • Spend wisely • Long-term sustainability
  15. 15. • Should I raise funds? • Is this the right time? • How much should I raise? • What are my options? • What equity investors look for? • How much should I dilute? • What documentation do I need? • What does the funding process look like? • How do I reach out to investors? • What can I do to better my chances?
  16. 16. Vineet Sagar Vice President, Venture Garage Email: vineet@smejoinup.com www.smejoinup.com/vgarage

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