<article>Bangalore, which has India&#8217;s highest number of startups, is not attracting as much funding as it used to.</article>

Bangalore, which has India&#8217;s highest number of startups, is not attracting as much funding as it used to.
Instead, investors are pouring in more funds into companies in the Delhi National Capital Region (NCR), which comprises Noida and Gurgaon as well. Startups in the region have attracted more than half of the $1.8 billion that venture capital firms have invested in India in the first six months of 2016, according to data from research firm <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/tracxn-raises-funding-from-nandan-nilekani-mohandas-pai-others-31091/">Tracxn</a>.
<a href="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Startup-funding-.png" rel="attachment wp-att-46035"><img loading="lazy" decoding="async" class="aligncenter wp-image-46035" src="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Startup-funding-.png" alt="Startup funding" width="620" height="340" srcset="https://media.dealstreetasia.com/uploads/2016/06/Startup-funding-.png?w=1004 1004w, https://media.dealstreetasia.com/uploads/2016/06/Startup-funding-.png?resize=768,420 768w, https://media.dealstreetasia.com/uploads/2016/06/Startup-funding-.png?resize=620,340 620w" sizes="(max-width: 620px) 100vw, 620px" /></a>
Total startup investment in 2016 (Year-to-date). All figures in $ million. Source: Tracxn.
The gap has widened at the top since the last year when Delhi NCR startups raised $1.1 billion in funding, compared with $951 million by Bangalore companies, according to Tracxn.
Mumbai was at third place with $491 million, while Pune and Hyderabad startups raised $42 million and $14 million respectively. These three cities are yet to have strong startup environments.
Bangalore has been referred to as India&#8217;s Silicon Valley because of its robust startup ecosystem. The initial wave of IT startups such as Infosys — later the bellwether of the Indian software industry — began there in the early 90s. The city continued to churn out startups and attract funding despite economic slowdowns during the 2000 dot com bust and the 2008 financial crisis.
Almost 30 per cent of India&#8217;s technology startups are based there, including unicorns such as <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/india-why-flipkart-snapdeal-ceos-are-talking-up-customer-satisfaction-45686/">Flipkart</a>, <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/ola-cabs-to-invest-23m-add-40000-vehicles-to-its-platform-in-andhra-pradesh-12699/">Ola</a>, and <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/india-digest-chryscap-to-exit-eris-life-inmobi-fined-950k-adhar-housing-dhfl-vysya-merger-45237/">InMobi</a>. It still is regarded as India&#8217;s top startup eco-system because of easier availability of tech talent, investors and universities.
<a href="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Deal_count.png" rel="attachment wp-att-46037"><img loading="lazy" decoding="async" class="aligncenter wp-image-46037" src="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Deal_count.png" alt="Deal_count" width="595" height="313" srcset="https://media.dealstreetasia.com/uploads/2016/06/Deal_count.png?w=990 990w, https://media.dealstreetasia.com/uploads/2016/06/Deal_count.png?resize=768,403 768w" sizes="(max-width: 595px) 100vw, 595px" /></a>
Deal count in 2016 (YTD)
In the above graph, Delhi&#8217;s lead in terms of deal count is much narrower than in funding, suggesting that bigger rounds played a major role. Delhi NCR&#8217;s startups had 155 deals, compared with 129 in Bangalore and 77 in Mumbai. Startups based out of Pune and Hyderabad were involved in 24 and 17 deals respectively.
But Delhi NCR has been able to attract several major e-commerce startups at a mature stage, such as online marketplace <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/india-why-flipkart-snapdeal-ceos-are-talking-up-customer-satisfaction-45686/">Snapdeal</a>, restaurant listing and food ordering company <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/india-in-a-new-twist-zomato-says-it-had-scaled-back-operations-in-overseas-markets-42298/">Zomato</a> and India&#8217;s largest online payments company <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/paytm-to-help-indian-sellers-source-from-china-45550/">Paytm</a>. These firms have raised huge amounts to finance their expensive, rapid growth, including hefty late-stage funding rounds from the likes of <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/softbank-said-to-face-inquiry-over-alleged-nikesh-arora-conflicts-46025/">Softbank</a> and <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/tiger-global-cut-stakes-in-amazon-jd-com-apple-last-quarter-41205/">Tiger Global</a>. Six of the top 10 ranked investments rounds were in startups located in Delhi NCR.
Late-stage funding rounds, which are several times larger than early-stage, have skewed the average investments graph in favour of startups in Delhi NCR, most of which were e-commerce players who had raised multiple rounds previously, the data shows. Startups in the Delhi NCR region had 22 Series A deals and 12 Series B rounds. In comparison, Bangalore had 16 Series A deals and nine Series B rounds.
Bangalore might regain the balance in the next six months if the mature startups there manage to raise raise funds at the levels of their northern counterparts. A report by consultancy Bain &amp; Co had said that this would be a tougher year for fundraising, but the corpus raised by VC and PE firms until last year would need to be invested. That has kept startups hopeful if raising enough funds this year, even if the amounts are lesser than what they would have raised in 2015.
<a href="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Avg-deal-size.png" rel="attachment wp-att-46038"><img loading="lazy" decoding="async" class="aligncenter wp-image-46038" src="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Avg-deal-size.png" alt="Avg deal size" width="587" height="319" srcset="https://media.dealstreetasia.com/uploads/2016/06/Avg-deal-size.png?w=972 972w, https://media.dealstreetasia.com/uploads/2016/06/Avg-deal-size.png?resize=768,417 768w" sizes="(max-width: 587px) 100vw, 587px" /></a>
Average deal size in 2016 (YTD). All figures in $ million.
Here are the top startup deals so far this year:
<a href="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Major-funding-rounds-in-2016.png" rel="attachment wp-att-46039"><img loading="lazy" decoding="async" width="1614" height="1100" class="aligncenter size-full wp-image-46039" src="http://www.dealstreetasia.com/wp-content/uploads/2016/06/Major-funding-rounds-in-2016.png" alt="Major funding rounds in 2016" srcset="https://media.dealstreetasia.com/uploads/2016/06/Major-funding-rounds-in-2016.png?w=1614 1614w, https://media.dealstreetasia.com/uploads/2016/06/Major-funding-rounds-in-2016.png?resize=768,523 768w" sizes="(max-width: 1614px) 100vw, 1614px" /></a>
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Bangalore, which has India's highest number of startups, got less funding than Delhi NCR startups, led by e-commerce funding rounds.

India: Late-stage rounds in e-commerce help Delhi trump Bangalore in VC funding

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India: Late-stage rounds in e-commerce help Delhi trump Bangalore in VC funding

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