Three important startup observations of 2016

The startup world has noticed several varying trends in the last 2 years and the momentum has only led to mature changes. As much as there were new startups observed, it was overwhelming to know that there was an equal percentage that failed to succeed in the market. Interestingly about 1000 startups have failed to leave a mark in the past 2 years which is almost close to 40% of the startup world. As the year is wrapping up, let us now look at what 2017 beholds with these latest observations from the previous year.

  1. Not all startups could make it: The year has seen careful investment approach from the angels. 212 startups have not survived to see 2017. It was noted that almost half of the startups could not survive in the market. One of the biggest failure was PepperTap which run out within two years. Lot of hopes were pinned on this startup. The Gurugram-based company, which started its operations in 2014, had raised more than $51 million from a league of big investors, including Sequoia Capital, Saif Partners and e-commerce major Snapdeal. In April, its founder Navneet Mishra announced the decision to close the grocery business.
  2. Not performing, no space (thumb rule): It is by now evident that startups which fail to perform will vanish. Even investors are looking at the potential of the startup and the ability to sustain in the market. India also has seen several tech companies becoming invisible because they are unable to deliver what was expected out of them. In the first six months of 2016, India saw the 3rd highest number of tech startup exits, according to CB Insights. The most important reason for this trend of failure has been funding slowdown.
  3. Not all is chaos: While the first two points appear depressing, the silver lining is the fact that the average investment in Indian startups is still on the rise. The average valuation of startups is $2.3 million in India, and 3/4th of the total investment goes to startups that are present in NCR and Bangalore. These two cities have also received more Series A funding than others, which means more upcoming Series B funding. Most of the e-commerce funding was observed in NCR while Bangalore is in the lead for all the startups put together.

These being the top three observations show that startups who will have logic and hard work will succeed while the rest will fade away. Hope that the New Year gets better and brings in exceptional growth to the startups. Happy 2017!

— Team SoS

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