Chinese investors miss record year for Indian tech fundraising

Chinese investors are effectively separated from the Indian tech sector, identifying areas that are turning out to be record years for Indian start-ups for US and European venture capitalists.

According to data provider Tracxn, Indian start-ups raised a record $ 7.2 billion in 336 rounds of funding during the quarter ended in June. Of these, Chinese investors only participated in 10 rounds and were worth a total of $ 745 million. In contrast, US investors participated in more than 100 rounds worth $ 5.7 billion.

Tech giants like Alibaba and Tencent were once one of the most influential investors in India’s growing startup scene, but most have been abandoned. By regulation Introduced last year in response to growing tensions between India and China.

US investors such as Sequoia, Lightspeed and Tiger Global are filling the void as investors invest capital in high growth opportunities in Indian tech due to sufficient liquidity and low returns in the Western market. Intervened for.

For example, New York-based investment firm Tiger Global completed a record 25 deals in India this year.

Karam Daulet-Singh of Touchstone Partners, a law firm that advises foreign investors including Tencent, said:

“Many American and European funds that have not considered India at all have great opportunities. It is the global Tiger Global that really benefits from this uncertainty.

Last year, India introduced a rule requiring all foreign direct investment from China to be approved by the government. Lawyers and venture capitalists say some stock trades are approved, but the process can take up to six months or more.

But more adventurous Chinese investors are looking for ways to get around restrictions on FDI, for example by increasing debt.

Tencent invested $ 40 million in debt last month GaanaAccording to Crunchbase, it is a music streaming platform and social media company ShareChat for $ 225 million. During the month of April..

Yinglan Tan, managing director of Insignia Ventures, a Singapore-based venture capital firm with a large number of Chinese investors, said the limitation was “a willingness to seek more creative strategies for Chinese investors, especially investment “. It does not completely block the opportunities of some investors. ”

“These tech strategies will surely continue to invest in what they see as ‘worth the effort,’ he added, citing Tencent’s ShareChat transaction as an example.

Some continental investors have the option of relocating Establishment of the office In Singapore, Tan added.

Mukul Rustagi, co-founder of Classplus, a Delhi-based online education company, raised $ 65 million in a round led by Tiger Global last month. “The market is very hot, three to four times hotter than last year. Part of the noise is part and others are quite late.