National, August 10 th 2022: 100X.VC, India’s first venture fund to invest in early-stage
startups using iSAFE Notes, is providing deep insights into the early-stage startup landscape of
the country with the 3rd Edition of ‘India Sentiment Outlook Survey.’ The survey was
conducted among 475 founders from different sectors and 75 investors participating in early-
stage ventures.
Ninad Karpe – Partner – 100X.VC said, “The Indian startup ecosystem had 44 unicorns in the
past year and we’ve already witnessed 17 unicorns emerged in 2022. Given the economic
conditions, the survey result indicates a mixed reaction from founders and investors around
the current market landscape. However, we are optimistic that there is still room for early-
stage funding with credible and large investment deal flow.”
Detailed findings of the survey are as follows:
Founder’s survey findings –
I. Expecting growth: 76% of founders are bullish on business growth in the near term.
Only 24% of them are bearish on their expectation for business growth. This indicates
an increase in investor trust in Indian startups, which are emerging as a high-return
asset class. The factors leading to the growth include a conducive market
environment, quality of businesses and an increase in angel investment activity.
II. Outlook on fundraising possibilities: 49% of founders believe fundraising has improved
significantly in the post-pandemic scenario. About 23% feel it will be extremely
difficult, and 28% expect no change. The Companies Bill will provide additional
support to entrepreneurs and clarity on corporate structures and governance.
III. Plans on raising funds: More than half of the surveyed founders (52%) plan to raise
funds in the next three months, 26% to raise funds in the period of 3-6 months, 15% in
6-12 months and 7% in more than 12 months. Founders now prefer first working with
Angel Investors, VCs and Angel Networks.
IV. Funding amount: 53% of founders plan to raise up to UDS 300K, 16% are targeting USD
300k-500k, and 13% of founders to raise USD 500k to 1 million. Around 5% of founders
plan on raising more than USD 5 million.
V. Key sources of funds: The top 3 sources of funding are direct investments from Angel
Investors, Angel Networks and Venture Capital Funds. 26% of founders also feel that
family, friends, and corporate venture capital are key funding sources. A very small
number of founders go to banks or family offices for funding.
VI. Awareness of iSAFE notes: About 59% of the surveyed founders are aware of iSAFE
notes. iSAFE is a simple document similar to a convertible note that secures investors
the right to some future equity. About 52% of founders find iSAFE a founder-friendly
investment instrument for seed stage funding.
VII. First cheque: 46% of founders believe Rs 1.25 crore cheque from 100X.VC will last 12
months, around 12% believe it will last beyond 18 months, and the remaining founders
think it will sustain for 12-18 months. Founders also want investors that can make
value additions as well. They also expect business introductions, mentoring and
fundraising.
VIII. Focus on Metaverse: 55% of the founders believe Metaverse and Web3 are
good opportunities for Indian startups, and 17% feel that these are not big trends with
Indian startups. With these technologies, a digital economy is under construction and
will be disconnected from the physical economy in the next decade.
Investor’s survey findings –
I. Investors’ plans: The majority of the investors, which is 52%, plan on investing in less
than five companies in the next 12 months, 37% want to invest in 5-15 companies, and
11% say they will invest in more than 15 companies in the next 12 months.
II. Unicorns in India by 2025: Roughly 45% of the investors expect 100-200 more unicorns
in the country by 2025. 32% expect less than 100 unicorns, and 23% expect more than
200 unicorns. It is an indication of enormous confidence in the growth trajectory
outlook from the investors.
III. Source of startup deals: 48% of investors believe more start-up deals will come from
angel investors at the seed stage. 14% believe more startup deals will come from
accelerators. A small fraction of 9% of investors feel more deals coming from
incubators, and 7% believe they come from investment bankers.
IV. Perspective on iSAFE notes: A good percentage of 75% of investors believe iSAFE is
simple to execute with no legal cost. 25% opine iSAFE is simple to execute with a legal
cost, and 4% view iSAFE as complex to execute with no legal cost.
V. Priority sectors: 23% of investors are closely monitoring SaaS-based startups, 22% are
looking at FinTech startups, 21% at deep-tech startups, 18% at B2B startups and 18% at
clean-tech startups. Other sectors like Agritech, Web3 and EdTech are on a low
priority.
VI. Leading deals and factors influencing investments: 51% of investors are leading
deals. While making the investment decision, 18% of investors prioritize Founders’
Right to Win, 14% of the investors prefer market size and 12% look at the business
model.
These are the findings of 100X.VC’s latest India Sentiment Outlook Survey. For full access
to the detailed report, more detail, please log on to
https://docsend.com/view/ipu3ngxhnxct269p
About 100X.VC
100X.VC is India’s first venture fund to invest in early-stage startups using iSAFE (India Simple
Agreement for Future Equity) Notes. 100X.VC is a SEBI Registered CAT I AIF, Investment
Adviser and the first Institutional Investor in our portfolio companies. The fund is sponsored
by Mehta Ventures (www.mehtaventures.co), the Family Office Investment arm of Sanjay
Mehta.
