Technology product startups, angel and venture market comparisons – US and India

There is a lot of activity and interest in technology product companies in India, as there is in the US. I spent some time reviewing numbers from NVCA, VCCircle and pulled some numbers specifically in the areas of Internet, software, technology products and eliminated services companies. Here is a simple table to keep things in perspective. All sources are at the bottom.

USA

India

Total number of technology (Product & services) companies formed annually (average)

24,169

412

# of companies that secured angel funding

15,233 (1)

65

# of companies that secured seed / early stage from VC

1,682

58

# of companies that secured late stage funding from VC

658

31

I am yet to do any “analysis”. Right now the data validation process is what I am going to embark upon.

What is your analysis.

Relevant Links:

1. Crash Dev – eye of the needle

2. UNH center for angel investment research.

3. NAV Fund John Backus

4. Product Startup Landscape in India from Zinnov . (Thanks Pari!)

5. NVCA National aggregate data for US investments (Excel spreadsheet)

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11 thoughts on “Technology product startups, angel and venture market comparisons – US and India

  1. Rajan Chandi

    Interesting data points. Over 50% of US tech. companies secure angel funding. I thought this number would be much lower. So, an Indian tech. company is 3.5 times less likely to secure angel funding as per your data points.

    Reply
  2. Utkarsh

    I don’t think so the total number of indian tech startups started annually is right.
    It actually depends on how we define these startups – registered businesses? startups that succeeded to get some visibility? number of years over which this data is calculated from?

    The current data seems to indicate India does better than US in seed stage and VC funding, which doesn’t seem to be likely.
    Also one more major source of funding in the US now is crowdfunding which we came up with sites like kiskstarter and now been legalized in the USA for the general public to get equity too.

    Many missing links.

    Reply
    1. Mukund Mohan Post author

      Utkarsh, data for Indian product startups is from Zinnov. This does not include services companies. As I said I am checking and rechecking the data. I took data from 2011 and 2012 only.

      Reply
  3. Ravi

    Great job, Mukund. Notwithstanding the validation part, the data points to an overwhelming influence of culture between investors in the two countries; with US (speed dating) investors taking more risks than our desi folks – investing in 4x more companies than Indians at angel stage. Interestingly, while (argumentative) desi investors appear to be spending too much time before committing their first buck; once committed, they appear to stick to their portfolio, with less than 20% dropoff at early stage, and just 50% drop off at late stage. Sad to see less than 1/5th of desi product experiments getting financial support at angel stage – perhaps this is a white space, if one can successfully decode the product black box, and work with an innovative incentive structure!

    Reply
  4. Pratyush Prasanna

    I dont think the absolute numbers are important beyond a point – but the trend and relative comparisions are. The fact that being a product company based in India cuts down the probability of funding by a third is indicative of the nascent market (and lack of angels who have made stupendous exits).

    The absolute number that IS important is that there are just 412 product companies (and I think that’s also stretching it). The pie has to grow and grow faster and bigger. Angels, investors – the ecosystem will follow naturally.

    Look forward to the analysis!

    Reply
  5. Lakshman Kakkirala

    It would really help to know if rows 4 and 3 are subsets of the rows above. If not, how many companies in row 3 are in row 2 etc. In other words, how many companies, in all secured any funding?

    Reply
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