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Dealmaking in Maharashtra slumps in 2016; angel investments hold out hope

14 February, 2017

Private investments in Maharashtra declined last year largely due to a significant drop in growth-stage deals. However, early-stage funding continued to hold out hope in the state, where Mumbai and Pune were the primary centres of entrepreneurial activity.

The number of deals in Maharashtra decreased to 219 in 2016, against 282 deals in the previous year, reveals VCCEdge, the data and research platform of News Corp VCCircle. The deal value also plunged by 42.4% to $285 million during the year.

In 2016, the state attracted only 28 deals amounting to $137 million at the Series-A level – 58% drop in the number, and 53% fall in deal value from 2015.

Similarly, Series B funding took a major hit with a 46% decline in value terms at $72.85 million from 16 deals, as compared to $135 million raised from 24 deals in 2015.

However, deal value at the angel and seed funding level increased 11.5% to $76.23 million last year, while deal volumes saw a relatively modest fall of 9% to 175.

Sector focus: Pune outshines Mumbai

Fintech and foodtech startups in the state continued to get maximum investor interest in 2016, the data noted. Fintech startups cornered $27.55 million funding from 15 deals, while foodtech startups came second with $16.5 million raised from nine funding deals.

In the last five years, fintech startups in the state have received funding worth $122 million from 64 deals, while foodtech startups have received $64.5 million from 47 deals.

Mumbai and Pune continued to be epicentres of startup funding in Maharashtra in 2016, accounting for 96% of the total deals and 99% of the deal value.

Mumbai contributed $232 million worth of funding from 151 deals in 2016, a steep decline from $418 million worth of funding from 233 deals in 2015.

Notably, Pune recorded an annual 69% increase in deal volume at 59, and a jump of 35% in funding value at $ 52.5 million. It was, in fact, one of the few startup hubs in India to buck the funding slowdown last year.

Overall, angel, seed and venture investments in India declined to 1,141 deals amounting to $3.13 billion in 2016, against 1,493 aggregating $6.94 billion in 2015.

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Dealmaking in Maharashtra slumps in 2016; angel investments hold out hope

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