What Drives Startup Fundraising in India?

Rajas Saroy, Ashish Khobragade, Rekha Misra, Sakshi Awasthy and Sarat Dhal in the RBI Bulletin article:

This text presents an evaluation of fundraising by the Indian startups over the previous decade, together with an summary of the enterprise capital financing mannequin. The article empirically derives the essential components that decide the quantum of start-up funding on the economy-wide stage in addition to on the agency stage.

Highlights:

1. 1. There was an upward stage shift of fundraising by the Indian start-ups post-2014. This has been contributed to by the Startup India initiative, together with different enabling insurance policies and the rising digitalisation of the economic system. COVID-19 offered a short lived enhance to fundraising.
   2. On the combination stage, long-run start-up funding is essentially pushed by the surplus return supplied by the home fairness market over the worldwide benchmark, and by the extent of home financial exercise.
   3. On the agency stage, unconventional components like the tutorial background of founders, pre-existing relationships with institutional buyers and recognition matter for fundraising, along with the size already achieved and the sector of operation.

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