India Startup Funding Analysis

The Project analyses Funding Received by Start-ups in India from years 2018 - 2021.

Summary

Code	Name	Published Article	PowerBi Dashboard
LP1	India Startup Funding Analysis	Article	PowerBI

Project Description

This data analysis project focuses on the funding received by start-ups in India from 2018 to 2021. The objective is to gain insights into the Indian start-up ecosystem and propose the best course of action for our team's venture. By analyzing the data on funding amounts, start-up details, and investor information, we aim to unearth prevailing patterns and gain insights about the opportunities in India's start-up ecosystem to inform decision-making.

The type of the problem

This project is of the exploratory data analytics and visualization type as it is our aim to deduce hidden insights and patterns from the available data.

To guide our analysis, we have formulated 5 SMART questions:

1. What is the overall trend in funding received by start-ups in India from 2018 to 2021?
2. Which industries or sectors have received the highest funding during this period?
3. What is the distribution of startups across the cities in India?
4. What is the average funding amount received by start-ups in India during this period?
5. Which Investors Funded Most Start-Ups Over the Period?
6. Which Investors Funded the Most Money on Average Over the Period?
7. At What Stages were Most Start-ups Funded?
8. Which 5 Cities Recorded Most Funding?

The following hypothesis were formulated for testing:

Hypothesis 1:
Null: The funding received by start-ups in India has not demonstrated consistent upward trajectory over the years.
Alternate: The funding received by start-ups in India has demonstrated a consistent upward trajectory over the years.

Hypothesis 2:
Null: There are no significant disparities in funding received by all sectors of the Indian startups.
Alternate: The technology sectors receive higher funding compared to other industries.

Hypothesis 3:
Null: Situating a startup in a particular city does not influence funding.
Alternate: Situating a startup in a particular city significantly affects funding.

Hypothesis 4:

Null: There are no significant disparities in funding received among different stages of the Indian startups.
Alternate: During different stages the startups received different funding amounts.

To test these hypotheses, we will conduct the following analyses:

• For Hypothesis 1, analyze the year-by-year funding amounts and calculate the average growth rate of funding.
• To investigate Hypothesis 2, categorize start-ups based on industry and compare the funding amounts received by each sector.
• Regarding Hypothesis 3, examine the distribution of start-ups across cities and deduce which cities harbor the most highly-funded start-ups.
• Regarding hypothesis 4, categorize start-ups based on stages and compare the funding amounts received by each stage.

Conclusion

• Funding dropped from 2018 to 2019 by over 17 billion dollars before rising steadily through to 2021. We therefore fail to reject the null hypothesis which states that the funding received by start-ups in India has not demonstrated consistent upward trajectory over the years.
• There are significant differences on the funding amounts received in through out the years. This can be proven by the post hoc Dunn test that illustrates the significant differences among the following pair of years ('2018', '2020'), ('2019', '2020'), ('2020', '2018'), ('2020', '2019'), ('2020', '2021'), ('2021', '2020').
• There are significant disparities in funding received during various sectors. Comparing the other sectors to the technology sectors, there was no significant evidence of a difference in funding amounts between the Tech sector and other sectors.
• There are significant disparities in funding received during various stages. The debt financing stage received the highest funding over the period with 150.7 billion. Venture capital with unknown series, however, came second with 14.9 billion and Series C with 13.4 billion

Recommendations

• Situation analysis for a venture into the Indian ecosystem regarding funding of start-ups is particularly important as it is highly likely to receive funding as a start-up when headquartered at Mumbai, Bangalore, New Delhi and Gurugram respectively.

• Alternative financing sources must be implored to support a start-up since most of the start-ups failed to receive highly significant funding at their initial stages. The earliest highly funded was at the Series C stage when it is expected to be a market fit.

• Considering the sector to venture into as far as funding for a start-up in India is concerned is vital as it is more likely to receive funding when at the financial services, commerce and shopping, administrative and education sectors, respectively.