Tech startups face a drought as e-commerce fattens


Flipkart and Snapdeal may be soaking up the cash as buoyant investors place a high value on the potential of Indian internet commerce companies but for most of the country’s technology startups, big bucks and skyrocketing valuations are only a distant dream.

Young ventures in India are typically valued less than peers inSilicon Valley, China or Israel due to a paucity of capital and investors unwilling to grant high valuations in a market where only a very few companies have delivered strong returns so far.

“In Silicon Valley, there is a lot of capital available because in the early stage, the managers of the capital are entrepreneurs and not investment bankers,” said Sharad Sharma, angel investor and co-founder of iSpirt, a software product industry think tank. The lack of a robust merger and acquisition market that can deliver strong exits is also pegging back the value of technology startups in the country.

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