Indian start-ups are China's big attraction now

The Chinese are set to arrive with their money bags to seed Indian start-ups with funds and ideas and hand-holding.

What started off with just a handful of early-stage start-up funds like Cyber Carrier setting up India-focused funds last year, is now set to become a major trend with other seasoned Chinese investors like Incapital, Fenghou Capital, Legend Capital, Plum Ventures, Grand View Capital, K2VC, Hill House Capital, Fusion Capital, Heli Capital and Chengwei Capital preparing to enter India, says Vikram Gupta, founder and managing partner, IvyCap Ventures.

"They have been waiting all this while but Chinese investors are expected to come in significant numbers. For them, the Indian start-up space, with the scope of growth that can happen, can't be ignored. Also, with Chinese start-ups getting more mature, growth there is tapering off, making India an attractive investment destination," he said. The current trigger for the Chinese interest is a recent visit of more than 15 funds, mostly angel investors, to India last week. "Such visits don't happen everyday.

The delegation that came to India was more interested in early stage start-ups. But the feedback we got during the meetings and also during our subsequent visit is that they would prefer a single platform to get access to target start-ups," said Vikram, a day after a week-long visit to Hong Kong, where a partnership pact was firmed up with the platform Zhucloud, developed by Incapital, which is part of the IT and communication biggie of Hong Kong, the HKT Group. The combined platform of IvyCapital and Zhucloud would bring together Chinese investors and Indian start-ups.

On its own, IvyCap manages two funds supported by the trust formed by the alumni of IITs and IIMs and provides start-ups access to the rich network of trust members. "Looking at the bigger picture, where the Chinese market was 10 years back, Indian market is there now. These Chinese investors had seen the growth process which we are now seeing in our own start-up sector and are keen to share this knowledge. They are perfectly placed to bring in not only mature capital but the knowledge they have gathered all these years in a market which is very similar to ours," Gupta said.

"The Chinese market is huge in terms of consumption, offering immense scope to Indian start-ups to learn and develop products".