Bangalore-based Ridingo.com, founded last February, was one of the shortlisted ventures of Nasscom's 10,000 Start-ups phase one programme held in 2013. The firm has recently managed to raise Rs 15 lakh from GSF Accelerators, the investor which had funded Little Eye Labs that Facebook acquired early this year. GSF Accelerators usually give funds worth Rs 15 lakh in multiple tranches for 8% stake in a new venture.
Despite the start-ups in the country being increasingly seen as hot acquisition targets among global giants like Facebook and Google, Indian start-ups typically face a gap in early-stage funding of Rs 10-20 lakh as angels look for operational ventures and seed funds or venture capitalists (VCs) mostly focus on large investments.
“It is extremely difficult to get a Rs 10-lakh funding, while it is easy to raise Rs 1 crore. Compared to the US, in India, we don't have so many investors in the low-funding stage,” said Rajat Tandon, senior director, 10,000 Start-ups, Nasscom. At present, the pitching session of the second phase is on with 197 shortlisted ventures from across the country speaking to incubators, accelerators and angel investors. Over the last few years these players have been striving to get business ideas to an investment-ready stage. The Nasscom programme is also looking at bridging this viability gap.
Ridingo.com, which gives fuel points to vehicle owners for car pooling that can be retrieved at fuel stations, is currently part of the Nasscom Warehouse, a joint venture between the IT industry lobby and the Karnataka government, for a nominal fee of Rs 3,500 per seat for a month. Sixteen startups from the phase one of the programme are being given a co-working space in the Bangalore Warehouse.
“In India, it is not ideas but revenues that sell. Otherwise you need to be financially sound or must have an education from the IIT or Havard,” said Srivatsan Mohan, co-founder of Ridingo. Mohan, who has worked in Hewlett Packard for six years and holds four patents, struggled to raise funds for his idea. He plans to go operational in a week.
So far, in the Nasscom 10,000 Start-ups phase one programme, 29 companies have been funded and are now being accelerated by various organisations like Kyron Accelerators or Microsoft Accelerators. Others are in the process of being evaluated by several angels and accelerators. Among the shortlisted ventures, around 41% of these companies are in idea stage