Investors love India’s startup ecosystem, and for good reason.
Up to 28% of limited partners (LPs), or investors in venture capital (VC) firms, said India was an attractive market, a recent report by consulting firm Bain & Company and the Indian Private Equity & Venture Capital Association showed.
Though China was viewed as slightly more favourable, far more LPs (22%) failed to see its appeal. Comparatively, only 18% said India’s VC market wasn’t attractive, making it the Asian-Pacific nation with the least number of detractors.
Already, India’s startups are flush with VC money. The sector is now evolving to nurture more and more talent.
One of the reasons VCs prefer India is its domestic consumption appetite, which gives startups access to a ready consumer base.
Disposable incomes and consumer expenditure have both risen in India at a compound annual growth rate (CAGR) of 9%-10% between 2013 and 2017.
In addition, India is witnessing a rapid increase in the penetration of smartphones and mobile internet, which will translate to more consumers for tech startups.
During the same four-year period ending 2017, internet penetration and mobile usage increased at a CAGR of over 20%.