It’s not just the venture capital (VC) funds that are kicked about technology startups in India.
Inspired by the success of VC funds, several crossover investors have increased their exposure to the country’s red-hot technology startup ecosystem. These crossover investors include hedge funds, mutual funds, family offices, asset management firms, and advisory firms.
During the first quarter of this year, crossover investors featured in 24 funding rounds, almost five times of their participation in the previous quarter, according to CB Insights, a New York-based venture capital database.
Unlike VCs, crossover investors are traditionally known to invest in equity and other asset classes like bonds and commodities. But with the Indian startup ecosystem booming, and the number of such young companies estimated to reach 11,500 by 2020, these companies are becoming an emerging asset class for them. And one of the most prominent hedge funds in the world, Tiger Global , has been bullish on Indian startups for years now.
Since April this year, the New York-based hedge fund has invested in five of the nine deals that happened in the Indian technology startup space. These investments include taxi-hailing service Ola Cabs’ series E round of $400 million, and classifieds portal Quikr’s series H round of $150 million.
The chart below shows the increasing interest of crossover investors in India’s startup ecosystem. (For the second quarter of 2015, data until May 4 is included.)