Venture Capital

Money provided by investors to start-up firms and small businesses with perceived long term growth potential.

VENTURE CAPITAL FUNDING IN INDIA

Promoted By:

All India Financial Institutions

State Level Financial Institutions

Commercial Banks

Private Sector Institutions

ForeignIndian

Venture capital funds in India

VCFs in India can be categorized into following five groups:

1) Those promoted by the Central Government controlled development finance institutions. For example:

- ICICI Venture Funds Ltd. - IFCI Venture Capital Funds Ltd (IVCF) - SIDBI Venture Capital Ltd (SVCL)

2) Those promoted by State Government controlled development finance institutions.For example:

- Punjab InfoTech Venture Fund - Gujarat Venture Finance Ltd (GVFL) - Kerala Venture Capital Fund Pvt Ltd.

3) Those promoted by public banks.For example:

- Can bank Venture Capital Fund - SBI Capital Market Ltd

4)Those promoted by private sectorcompanies.For example:

- IL&FS Trust Company Ltd - Infinity Venture India Fund

5)Those established as an overseas venture capital fund.For example:

- Walden International Investment Group

- HSBC Private Equity management Mauritius Ltd

Venture capital industry wise segmentation

6.947.73

11.5

4.32

27.954.82

11.43

12.92

3.369.03

Percentage

IT & ITESEnergyManufacturingMedia & Ent.BFSIShipping & logisticsEng. & Const.TelecomHealth careOthers

Top cities attracting venture capital investmentsCITIES SECTORS

MUMBAI Software services, BPO, Media, Computer graphics, Animations, Finance & Banking

BANGALORE All IP led companies, IT & ITES, Bio-technology

DELHI Software services, ITES , Telecom

CHENNAI IT , Telecom

HYDERABAD IT & ITES, Pharmaceuticals

PUNE Bio-technology, IT , BPO

Venture capital funding stages

SEED STAGE

The first stage of venture capital financing. seed-stage financings are often comparatively modest amounts of capital provided to inventors or entrepreneurs to finance the early development of a new product or service. These early financings may be directed toward product development, market research, building a management team and developing a business plan. A genuine seed-stage company has usually not yet established commercial operations - a cash infusion to fund continued research and product development is essential. These early companies are typically quite difficult business opportunities to finance, often requiring capital for pre-startup R&D, product development and testing, or designing specialized equipment. An initial seed investment round made by a professional VC firm typically ranges from $250,000 to $1 million. 

Early Stage - For companies that are able to begin operations but are not yet at the stage of commercial manufacturing and sales, early stage financing supports a step-up in capabilities. At this point, new business can consume vast amounts of cash, while VC firms with a large number of early-stage companies in their portfolios can see costs quickly escalate. 

Start-up - Supports product development and initial marketing. Start-up financing provides funds to companies for product development and initial marketing. This type of financing is usually provided to companies just organized or to those that have been in business just a short time but have not yet sold their product in the marketplace. 

First Stage - Capital is provided to initiate commercial manufacturing and sales. Most first-stage companies have been in business less than three years and have a product or service in testing or pilot production. In some cases, the product may be commercially available. 

SECOND STAGEAt this stage, we presume that the idea has been transformed into a product and is being produced and sold. This is the first encounter with the rest of the market, the competitors. The venture is trying to squeeze between the rest and it tries to get some market share from the competitors. This is one of the main goals at this stage. Another important point is the cost. The venture is trying to minimize their losses in order to reach the break-evenThe management team has to handle very decisively. The VC firm monitors the management capability of the team. This consists of how the management team manages the development process of the product and how they react to competition.

The Third Stage• This stage is seen as the expansion/maturity phase of the

previous stage. The venture tries to expand the market share they gained in the previous stage. This can be done by selling more amount of the product and having a good marketing campaign. Also, the venture will have to see whether it is possible to cut down their production cost or restructure the internal process. This can become more visible by doing a SWOT analysis. • Apart from expanding, the venture also starts to investigate follow-up products and services. In some cases, the venture also investigates how to expand the life-cycle of the existing product/service.

• At this stage the VC firm monitors the objectives already mentioned in the second stage and also the new objective mentioned at this stage. The VC firm will evaluate if the management team has made the expected cost reduction. They also want to know how the venture competes against the competitors. The new developed follow-up product will be evaluated to see if there is any potential.

The Bridge/Pre-public Stage

• This is the last stage of the venture capital financing process. The main goal of this stage is for the venture to go public so that investors can exit the venture with a profit commensurate with the risk they have taken.

• At this stage, the venture achieves a certain amount of market share. This gives the venture some opportunities, for example:

• Merger with other companies• Keeping new competitors away from the market• Eliminate competitors

• Internally, the venture has to examine where the product's market position and, if possible, reposition it to attract new Market segmentation. This is also the phase to introduce the follow-up product/services to attract new clients and markets.

Founded 2010Industry E commerceFounders Kunal Bahl , Rohit Bansal

Venture Funding :-January , 2011 - $12 million from Nexus venture partners and Indo-US venture partners

July , 2011 - $45 million from Bessemer venture partners and existing investors

Round 3 - $50 million from existing investors

Venture funding of $250000 in 2002 from Draper investment company

Venture funding of $1.3 million

Venture funding of 6 million euros

February , 2014 - $133 million from Kalaari capital, Intel capital, Saama capital and all existing investors

May , 2014 - $105 million from Blackrock, Temasek holdings and Premji Invest

October , 2014 - $647 million from Softbank

Founded 2007Industry E commerceFounders Sachin Bansal, Binny Bansal

Venture Funding :- Accel India US$1 million in 2009 Tiger Global US$10 million in 2010

and US$20 million in June 2011 ICONIQ Capital-$150 million Additional $200 million from existing

investors including Tiger Global, Naspers, Accel Partners and Iconic Capita in July 2013

DST Global-$210 million on 26 May 2014 Tiger Global Management-$1 billion on 29 July 2014 Baillie Gifford & Greenoaks Capital- USD 700 Million in

November 2014 Singapore-based companies regulator ACRA- USD 700

million in December 2014 By August 2015, after raising $700 million, Flipkart had

already raised a total of $3 billion, over 12 rounds and 16 investors

Founded 2010Industry E commerceFounders Vijay Shekhar Sharma

Funding :- In March 2015, Indian industrialist Ratan

Tata made personal investment in the firm .  Paytm received a $575 million investment from

Chinese e-commerce company Alibaba Group in march 2015 

Ant Financial Services Group took 25% stake in One97 as part of a strategic agreement.

Company received 300cr from ICICI Bank in March 2016

Thank youPresented By: Aakriti Chaudhary FA15001 Pooja Tayal FA15040 Rahul Kumar FA15042 Saakshi Bhalla FA15045 Sambhav Jain FA14049 Bhawna Gupta FA15014