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India ranks 3rd globally in tech startup exits

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CIOL Writers
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Successful startup exits are an indicator of successful startup ecosystem. Incidentally, till a couple of years back there were concerns that India wasn’t seeing too many exits of startups through mergers & acquisitions (M&As) or IPOs. The picture seems to have changed as the country witnessed a third highest number of tech startup exits, in the first half of 2016, according to US startup database CB Insights.

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The US led the list with 857 M&A/IPOs in the first six months of 2016, followed by the UK with 135. Indian startups witnessed 86 M&As, down from 96 in the second half of 2015. China, with just 15 M&As, fell to 11th position from 7th in the second half of 2015.

CIOL India ranks 3rd globally in tech startup exits

The report said there were over 1,590 exits globally in the first half of 2016, a 17 percent decline from the same period last year. However, the number of exits in the June quarter, at 820, was a 6 percent increase over the March quarter.

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Over half, (53 percent) of the exits were at valuations less than $50 million, and 26 percent of the exits was between $50 million and $200 million, according to CB Insights. Only 4 percent of exits were at over a $1 billion - US-based personalized healthcare company Nanthealth topped the tech exit charts with a valuation of $1.7 billion.

While some of those companies saw successful exits (Twilio, Lytx, Ping Identity etc), there were a number of companies that sold for less than their total funding raised. For example, One Kings Lane raised $229M and sold for $30M while Gilt Groupe raised $284M and sold for $250M.

CIOL India ranks 3rd globally in tech startup exits

Interestingly, 72 percent of companies that exited didn't raise VC or PE money prior to exit. Given the large number of consumer Internet companies, every country in the top 5 had exits in the space. In India, 28 percent of the overall exits were of mobile ventures, the highest among the top 5 countries. Except for India (28 percent) and Canada (23 percent), Mobile exits have slowed down, reaching a 5-quarter low to account for 15 percent of global tech exits in Q2’16.

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