US firms most active investors in Indian start-ups

US-based Accel Partners made its largest investment in Flipkart through the overseas unit
US-based investors have been the most active foreign participants in India’s start-up ecosystem over the past five years, racking up over 800 equity deals during the period.

This also made them the second most active grouping since 2012, after their counterparts based in India or Mauritius, according to a CB Insights report. 

Singapore, Hong Kong, Japan, and the UK occupied the other four spots in the list of top five foreign investors in India’s technology ecosystem, racking up five, three, two and one per cent of deals, respectively.

“Excluding India and Mauritius, deal participation is heavily tilted toward investors from the United States, which has seen 800 disclosed equity deals to Indian start-ups since 2012 — more than four times the number of deals by investors from Singapore,” said the report.

Of the US-based investors, Tiger Global has been the most active, backing some of India’s largest start-ups, including Flipkart, Ola, and ShopClues, while also making numerous other investments in smaller companies. The investor also featured in the list of top 10 start-up backers in the country.

Another foreign investor who closed a large number of deals in the past five years is Hong Kong-based Saif Partners, which has backed firms such as Paytm and Urban Ladder.

While India/Mauritius-based investors contributed to 61 per cent of the start-up deals in the country, foreign investors have pumped in far larger amounts of money. Even US-based Accel Partners, which has an India unit, made its largest investment in Flipkart through the overseas unit rather than the local one.

Tiger Global and Japan-based Softbank are among the largest investors in India’s start-up ecosystem, having pumped in billions of dollars in the past few years.