Angel & seed funding of Indian startups perked up in Q2

After a sluggish start to the year with a sharp drop in the number of startups attracting early stage venture funding in the first quarter, angel & seed investments in India perked up almost 33 per cent for the three months ended June 30, 2014, according to a data collated by VCCEdge, the data research platform of VCCircle.

This bodes well for startup community as the angel or seed fund provides the first external financial support to scale up the venture.

There were a total of 65 deals in the angel-seed stage with a cumulative announced value of $16 million in Q2. The actual funding value would be higher as the investment amounts are not disclosed for some transactions.

In comparison, in the second quarter of last year, investors put $14 million across 49 startups, which means the number of firms getting funding rose by a third year on year.

The most active investors last quarter include Unitus Seed Fund, Mumbai Angels, Accel Partners, SAIF Partners, VentureNursery and GrowX, all of which struck more than one investment in the last three months.

The sequential rise in the volume of angel-seed investments was particularly strong last quarter. There were just 38 deals with a cumulative value of $14 million in Q1. This had declined 38 per cent over the deal flow for the quarter ended March 31, 2013.

However, given the slow start to the year, the overall number of startups which got funding in the first half or first six months of 2014 stands a tad short of last year's tally of 111 in the corresponding period.

(Edited by Joby Puthuparampil Johnson)