Lessons from India’s most funded startups in 2017
The Indian startup scene is currently in a delicate situation: investors are still cautious following bad performances for big investments in 2016. Several promising companies, however, have managed to navigate the slump to gain the trust of investors.
These three startup companies in 2017 secured the most funding from seed, angel, and investment funding sources, respectively. Valuable lessons can be learned from analyzing how they managed to stand out, both to the public and to investors, at their particular stage of development.
Looking to be India’s first fully digital insurance company
Seed funding: $30.9 million in 2017 in total
Acko sprung suddenly into the startup world in May with huge news: $30 million in a single funding round from several investors. Acko aims to simplify insurance for small-ticket needs, transferring savings from their non-physical business to customers. An early-stage startup, Acko is the embodiment of potential for disruption.
Getting insurance policies is time-consuming, complicated and boring for the average user. Digitizing this outdated business model reduces the hassle and could save the customer 40%. This is an idea bound to take a significant slice of the cake that is the $10 billion Indian insurance market. Thorough market research is essential at this stage, and services such as Probolsky Research can give you a significant edge to make investors see the potential of your startup.
Communication and collaboration platform for companies
Angel funding: $25 million in 2017.
Competing directly with Slack, but with lower costs and more features, Flock has developed a product they hope will capture the attention of large companies and become a single-stop substitute for the constant switching between e-mail, Skype, and other common office communication tools. Brought to life by successful entrepreneurs and brothers Bhavin Turakhia and Divyank Turakhia, the enterprise collaboration platform promises to tap into a profitable and relatively untapped market.
Flock secured $25 million this year on top of $20 million in initial funding in 2016. However, the impressive $45 million funding spree came straight from the two brothers’ pockets, who have amassed a $1.4 billion fortune building, running and selling several successful tech startups.
The moral is pretty straightforward here: experience pays off—and there are no better angel investors than rich siblings.
Online platform for paying utilities and recharging prepaid services; expanding to e-commerce.
Investment funding: $1.4 billion in 2017
When parent company One97 secured $1.4 billion from Japanese conglomerate SoftBank and vowed to invest it all into Paytm, its valuation rose to $8 billion, becoming India’s second most valuable unicorn just ahead of Snapdeal. Previous funding by the Alibaba Group – for whom it was the first time investing in an Indian company – and other sources have shown investors’ great confidence in the future of the fintech startup.
The 500 million potential Indian users are what the company is after. Even with the fast growth rate of Paytm, it will take time to reach their intended size. The company is looking ahead and diversifying with ventures such as Paytm Mall and Paytm Payments Bank, weaving its service offering into a complete ecosystem users will increasingly depend on.
Such large-scale outcomes for funding rounds are rare and Paytm is not close to profitability, which it is expected to reach within five to six years. However, the secured investment has created value by further increasing investor confidence, resulting in the aforementioned $8 billion valuation.