The Indian startup funding in the first half of 2021 has already reached the overall funding raised in 2020, with $10.1 billion across 543 deals. In 2020, the Indian startups had raised $10.14 billion across 1200 deals.
Lakhani Financial Services recently closed funding for 4 startups across Sportstech, Edtech and Food Retail. Extending their services from fund raising, Lakhani Financial Services also mentor startups through a 3 month programme to prepare all aspects of business presentation before fundraising. With their own network of investors, the company is now looking to close nearly 10 deals in the coming 5 months.
Manish Joshi from NewsBarons connects with Devansh Lakhani, Director, Lakhani Financial Services and a Chartered Accountant by profession, who informs ‘Apart from Fund raising, many deserving startup entrepreneurs who fail to make the mark due to the lack of proper guidance and handholding.’
NB: What is your outlook for 2021. Do you see considerable growth in funding opportunities for Indian startups in 2021.
Devansh: It’s been a tough year, and the second wave of pandemic and lockdown has further hampered the economy and growth prospects. The pandemic has further fastened the process of digital transformation across business platforms in India, and tech startups are bound to gain in this process.
As for funding opportunities, we have already witnessed over $10.1 billion in funding (2021 H1 data) with investors exploring opportunities across sectors.
We are positive that 2021 will end better than 2020, that saw a total corpus of $10.14 billion in startup funding across 1200 deals.
NB: Which segment/s do you believe have exponential potential for growth and funding going forward.
Devansh: Though 2021 saw a huge amount of money being invested in Fintech, Foodtech and Healthtech spaces amongst others, we believe that the below three sectors are bound for exponential growth:
1. Direct 2 Consumer (D2C): D2C has huge growth potential with the growth of internet penetration across rural India. Though the space, at present, is fragmented but the opportunity is vast with the availability of ecommerce across tier II & III locations.
2. Sportstech: We see a huge opportunity in this area and are positive that data driven businesses like sports wearables, performance enhancing equipments and sports analytics startups would generate a lot of interest amongst investors.
3. Edtech: We have already witnessed a lot of traction in this space; and is expected to become a $30 billion industry in the coming 10 years.
NB: What do you believe is the biggest dissonance in Indian startup industry.
Devansh: The Indian Startup Ecosystem has been attracting a lot of interest and funding from global investors and has seen steady growth, even during the pandemic period.
But there are many deserving startup entrepreneurs who fail to make the mark due to the lack of proper guidance and handholding, especially at the early stages. Also, we need a higher participation from leading private organisations to support young startups and groom them for entrepreneurship. Apart than capital requirement, right mentoring accounts for a huge percentage for failure of startups.
NB: What role do you play in startup funding? What are your plans for 2021.
Devansh: Lakhani Financial Services is a boutique Investment Banking and an Advisory firm specializing in helping startups raise funds from our network of investors.
At LFS, we provide all the support that a startup requires to raise funds. We handhold startups in their fundraising journey by helping them prepare an efficient business plan, a pitch deck, preparing valuation and connecting with investors to raise funds.
We also have a 3 month mentoring program for startups that are looking to build traction before approaching investors for funding.
In 2021, we have strong plans to help over 100 startups and raise funds for 10 of them. We have already closed deals for 2 startups and plan to raise funds for more 8 startups in the coming 5 months.
NB: Your advice to startups looking to raise funds.
Devansh: We have 2 simple advice for startups looking to raise funds:
1. Before fundraising, ensure that you have invested enough (bootstrapped) to showcase your product meaningfully to the investors. Founders, especially young entrepreneurs, need to understand that no one will invest in their business if they themselves aren’t invested in it. And by investment, we mean aspects like business involvement, hard work, efforts along with money to prove your capabilities and your plans post funding.
2. Always be prepared with an efficient business plan. Entrepreneurs need to communicate their business vision in a few sentences, detailing growth opportunities, fund deployment, geographical growth and product bandwidth with a 3/5 year plan. The clarity in founder’s vision with articulated plan helps investors understand business better and improves the chances of the business getting investments.