Currently, 50% of Matrix’s portfolio companies are based in Bengaluru, while 15-20% are in the national capital region (NCR).
Bengaluru: Venture capital (VC) firm Matrix Partners India will increase its investments in Delhi-based start-ups as it seeks to expand its consumer internet portfolio and tap what it says is an under-served market by investors.
Currently, 50% of Matrix’s portfolio companies are based in Bengaluru, while 15-20% are in the national capital region (NCR). Matrix will launch its Delhi office this week and has moved three of its investors there.
“Over the past 18 months, 30-40% of the start-ups we’ve been meeting have been based in NCR which is more than we meet in Bangalore. Even for the overall market NCR has more start-ups than Bangalore but Bangalore still leads by far in terms of funded deals. That could be because of two reasons. VCs are more focused on Bangalore or the quality of Delhi start-ups is not that good. We think it’s the first reason. And we were missing out on unique ideas in Delhi and wanted to be closer to the ecosystem,” Matrix Partners managing director Tarun Davda said.
Few of India’s top VC firms have a presence in the NCR though investors travel frequently to hunt for new investments there. Apart from SAIF Partners and Lightspeed Ventures, most other large funds are based in Bengaluru and Mumbai. Over the past 18 months, NCR has emerged as an equally attractive destination as Bengaluru in terms of new start-up activity.
Davda said that while Bengaluru was the hub for pure tech-related investments, Delhi has a larger base of operation-heavy commerce and Internet start-ups.
“For sectors like e-commerce and travel and ops (operations)-heavy businesses, there’s a very big and established ecosystem in Delhi. Overall, we want to expand our consumer Internet portfolio and having a presence in Delhi will help us do that,” Davda said.