47% of founders see startups growing at good clip

Nearly 47% of startup founders are experiencing growth at present, while another 42% expect the same over the next six months, a survey by early-stage venture investor 100X VC showed.About two-thirds (65%) of participants in the survey expect seed-stage funding by angel investors to increase this year, according to the second edition of ‘India Sentiment Outlook Survey’ of 275 founders and 77 investors across sectors.Almost 88% of early-stage ventures are looking to raise funds in the next 3-6 months, the survey report, shared exclusively with ET, showed.“Over the past year, we have seen the Indian startup segment giving a strong pushback to the Covid-19-induced market landscape. We believe that the optimistic outlook of both startups and investors, as also seen in the survey results, is an encouraging factor,” said Sanjay Mehta, founder and partner, 100X.VC.As per the survey, around 40% of startups have not changed their fundraising plans. However, 23% have delayed their fundraising initiatives, while 12% said they will decrease their round sizes. Of the total sample, 25% were inclined to ask for more capital.“We are at the stage where it’s never been easier to start a business, never been easier to raise funds and it’s never been easier to scale. This ecosystem has the perfect mix of opportunity, growth potential and momentum,” said Tuhin Sharma, cofounder of on-demand automation company Accio Robotics.Angel investors and individual investors (34%) topped the charts in terms of source of funding, while micro-VCs were the second port of call for founders with around 21% saying they would opt for such funds. Around 18% of founders preferred raising capital from venture capital funds.“Covid-19 has generated mixed sentiments among all sections of society. While credit has dried up for most, equity flows are at an all-time high. It’s a time of flux and uncertainty that the world has never seen for this long,” said Siddarth Pai, founding partner, 3One4 Capital. “The report helps get a pulse of investor sentiment and will inform the powers that be of the reforms required to convert these sentiments to action.”Angel network syndicates (13%), private equity (4%), and family offices (3%) were the other sources of funding, the report showed.More businesses were inclined to expand into newer markets, with around 33% of the companies saying they would expand; around 29% said they were looking to hire aggressively and 21% said they were looking at hiking product portfolios.Increasing runway and conserving cash were the other key focus areas for startups.Business valuations are also expected to see manifold growth, with 28% of startup founders saying valuations have increased while 41% expected it to increase in the near term.Around 19% reported no change, while 6% said it had decreased or was about to trend down.“I believe ‘Next Big What’ will be from India. Looking at the current Indian Startup ecosystem, the resource utilization, innovation, out-of-box thinking, striving to make complex things simpler and support from the investor community are driving our startup ecosystem to newer heights,” said Akash Nidhi PS, cofounder and chief technology officer of Vitra.ai -- a simple drag-and-drop application to translate videos with voice and lip sync to more than 50 languages.Among the 77 investors who took the survey, 51% were angel investors, 21% from venture capital funds, around 9% from micro-VCs and 7% from family offices and angel networks each.Of these, around 70% of all respondents said they were seeing business growth, 23% expected it in the next few months, while 68% were asking portfolio companies to be more aggressive and 30% were prompting them to maintain status quo, according to the report.

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