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Startup funding in Mumbai, Pune declines by 22% in 2016

Startup funding in Mumbai, Pune declines by 22% in 2016
Startup funding in Mumbai, Pune down by 22% in 2016

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Startup funding in Maharashtra, concentrated primarily around Mumbai and Pune, declined by 22 percent in 2016, a recent study by News Corp VCCEdge has said.

In 2016, a total of 219 funding deals worth USD 285 million was raised by startups based in the state. In comparison, there were 282 funding deals amounting to USD 496 million in 2015, the statement from News Corp VCCEdge, the financial research platform of News Corp VCCircle, said.

The number signify a drop of 22.3 percent in the number of deals and 42.4 per cent in terms of deal value.

The 2016 funding numbers were however higher by 53 percent in terms of number of deals than 2014, and 9 per cent higher in terms of deal value for the same period, which saw Maharashtra based startups raise USD 262 million from 143 deals, it said.

In the last five years, a total of USD 1312 million worth of funding was received by Maharashtra based startups across 866 deals, including Angel, Seed, Series A, Series B rounds, it added.

The contribution of angel/seed funding of startups in Maharashtra to total number of deals has touched a five year high of 80 percent in 2016.

Overall, 175 angel/seed funding deals amounted to USD 76.23 million in 2016; a decrease of 9 percent in number of deals, but an increase of 11.5 percent in deal value when compared to 2015.

“The rise in angel/seed funding in the state is encouraging from the viewpoint of promising business ideas, which have the potential of fulfilling needs of the end customer, continue to get requisite funding,” Nita Kapoor, Head – India New Ventures, News Corp and CEO, News Corp VCCircle said.

“However, the fall in ‘growth stage’ funding is indicative of these startup ideas failing to achieve scale,” she added.

Series A funding declined 58 percent in number of deals registered and 53 percent in deal value on a year-on-year basis in 2016 with only 28 deals amounting to USD 137 million.

It is Series B funding which took a major hit in 2016 with a 46 percent decline in value terms with USD 72.85 million raised from 16 deals as against USD 135 million from 24 deals in 2015.

Mumbai and Pune continued to be epicenters of startup funding in Maharashtra in 2016, totalling 96 percent of number of deals and 99 percent of deal value.

Fintech and Foodtech startups in the state continued to rake in maximum investor interest in 2016, followed by Education technology and Entertainment tech startups.

With agency inputs

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