Start-ups deal sizes are getting smaller: VCCircle

Startup funding deals has stood at $301 million, a drop of 50 per cent over the last year

In the first quarter this year, start-up funding deals have shrunk to $301 million as compared to $611 million in the same period a year ago indicating that this is a year of consolidation. Start-up valuations are getting trimmed as the deal size is shrinking while the funding deal volume has remained constant.

 

There were 234 transactions in January-March 2016 as against 232 deals in the year-ago period, according to VCCEdge, the financial research platform of the VCCircle Network, which is part of News Corp.

 

Going by the current rate of deals, as many as 1000 start-ups are expected to get funded this year. The deals data point out that investors are waiting and consolidating their existing portfolios and looking at ventures with strong fundamentals and a good revenue model.

 

However, the share of start-ups in the overall private investment pie is on the rise. Start-ups accounted for 70 percent of the total transactions in 2015, up from 62 percent in 2014. Bengaluru tops the deal volume share at 25 percent of the total start-up deals.

 

Source: Agencies


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