Average start up funding up 27% at Rs 4.6 crore: Report

The average size of funding received by startups from angel investors grew 27% to Rs 4.67 crore in 2015, from Rs 1.06 crore in 2009, a report said.

Also, the average investments made by these angel investors individually saw an annual growth rate of 34% from Rs 0.21 crore in 2009 to Rs 1.69 crore in 2015, according to the '2016 India Venture Capital and Private Equity Report on Start-Ups' by Indian Institute of Technology, Madras (IIT-Madras).

"Startups have an important role to play in the modern innovation economy. The national government has recognised this and startups have emerged as a focus area for policy making now," IIT Madras Director Bhaskar Ramamurthi said.

This report provides an interesting commentary on the trends in startups and the startup ecosystem of India since 2005, he added.

The report said angel deals have shown an annual average growth rate of 124% during 2008 2015.

"The number of angel investors has grown at an annual average of 107% during 2008-15. While the number of first time angel investors has grown at a rate of 98%, the growth rate of investors who are re-investing has been 105%," it added.

Besides, companies in tier I cities are getting funded earlier and obtaining larger amounts of funding. The average deal sizes for companies in tier I cities are about 62% higher than that of tier II cities.

Also, investment rounds are more than 40% higher in tier I cities as compared to tier II cities.