Jan, 2018     

NEWSDOG: Startups hit with reality-check as VCs turn choosy with their money


NEWSDOG: In 2017, investors turned more choosy, putting higher amounts of money into a few companies they believe are potential winners. So, while the amount of start-up funding in 2017 doubled, the volume of deals was lower. Startups raised roughly $10.7 billion in 2017, compared with $4.6 billion in all of 2016, according to data with Tracxn, a start-up tracker.

The sluggish early-stage investment activity has led to concerns that venture capital (VC) firms will struggle to generate returns on the large amount of funds they raised in the past two-to-three years and that the big Internet companies are hoarding too much capital, leaving little for smaller startups.

As investors are still not done separating the weed from the chaff, expect the investment trends of 2017 to continue into this year.

On the actual business side, things did improve in 2017. After nearly 18 months, India’s e-commerce market finally picked up sharply in the second half of the year, driven by strong growth at Flipkart Ltd and Amazon India and new entrant Paytm E-Commerce. Online retail grew 23% to $17.8 billion in 2017, up from $14.5 billion in gross merchandise value (GMV) last year, according to RedSeer Management Consulting, a market research and consulting firm.

The expansion of online retail is likely to accelerate next year, with the market projected to increase by as much as 60% to $28-30 billion in gross merchandise value (GMV), according to RedSeer estimates. GMV is an e-commerce metric that refers to the value of goods sold on a site but does not account for discounts or even sales returns.

 

 

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