For Indian startups, families and friends are primary and the largest source of funds as only 13.2% of the startups received international funding, said a survey based on responses from 1,246 startups by the Reserve Bank of India (RBI).
About 6.8% of the Indian startups got international funding up to Rs 1 crore whereas 1.9% of them received above Rs 10 crore funding. About 1.5% of the total overseas funding was not reported.
Families and friends emerged as the largest source of funding, about 43%, for startups. Angel investor and incubator funding were the next largest sources of investment, 11.3% and 9.7% respectively.
Around 36% of the startups availed institutional loans to finance their activities.
The pilot survey of the central bank further revealed the concentration of the startup sector in India to a few states. Close to 75% of the participants were from only five states- Karnataka, Maharashtra, Telangana, Delhi, and Tamil Nadu.
“Over 70% of the participating startups were set up in the last three years”, the survey said.
The survey further covered aspects of Product Innovation and Sectoral Spread. About 50% of the participating startups dealt in innovative products and over 20% had filed patents for their products, the survey added.
In terms of academic qualification, about 88% of the founders had a bachelor’s degree. Close to 10% of the founders were below 25 years of age and 7.3% of the founders were still students.
Around 55% of founders were in the age group 25 to 40 years.
Talking about their future plans, almost 58% of the startups, mostly belonged to health, software development, IT consulting sectors, aim to get listed on the Indian stock exchanges in the next five years.
The RBI’s pilot survey was conducted on the Indian startup sector from November 2018 to April 2019.