Background
2016 – was the time when AUXANO took the leap of faith and invested in a startup (a new lexicon which was coined in the last few decades). It was a disruptor, an emerging megatrend, a category creator and add to the spice – a prepaid wallet with no checkout. Which also meant that cash first and revenue later. What a combination.
And what’s the downside – execution risk, ecosystem adaptability, a large player with enough capital wanting to displace. These are not in our hands – we cannot control this, as an investor.
What can be controlled is the input from the promoters on strategy, opening doors to promoters in all possible manners which was coined India’s venture capital (VC) journey has evolved rapidly over the decade —shaped by digital transformation, regulatory shifts, and growing global interest in Indian startups. At Auxano Capital, we have witnessed this evolution from close quarters, both as investors and enablers of long-term value. Here’s how the Indian VC landscape has developed and where it stands today.
Auxano into VC world
Around 2014 Flipkart became a unicorn and it caught the attention of the investing world in India. Mutual Fund investing was slowly gaining traction and salaries were also going up. Moreover, Indian professionals who were travelling globally on work, was getting introduced to the world of startup investing.
And this was where the clients wanted to invest in the startup world. But, being professionals, and being busy in their work, wanted an organisation and team, who could ensure that the opportunities which came in were identified to be fit for investment, carry out due diligence and get a go-no-go, for investment.
And since the team at Auxano had experience in the space of wealth management and also having experience across industries in the corporate space, Auxano was the choice for the investors.
And that’s how the investing journey of Auxano in the Startup world got initiated.
Lets understand the evolution of the VC world in India from 2010-2015 –
- The Flipkart story (founded 2007, unicorn by 2014) was a turning point. It gave LPs and founders a glimpse into the real potential of technology-driven scale in India.
- AUMs (Assets Under Management) for Indian VC firms crossed $10 billion by 2015, with annual deployment reaching ~$1.5 billion in early-stage rounds.
- Domestic players gained visibility, while global VCs doubled down on India.
- Sectors like e-commerce, logistics, payments, and SaaS took center stage.
2015-2020 was the time of diversification and democratization in the VC world in India
- By 2020, India had over 50 active VC firms and more than 30,000 startups registered with DPIIT.
- Annual VC investments grew to over $10 billion, as Indian startups began drawing attention from sovereign wealth funds, hedge funds, and family offices.
- Auxano Capital, founded during this phase, positioned itself to serve a growing cohort of Indian LPs who were seeking professionally managed, impact-driven exposure to the startup economy.
- The market witnessed diversification: healthtech, edtech, agritech, and fintech became hot sectors. The Bharat narrative gained strength, moving the focus beyond metros.
2020–2023- the period of boom and afteraffects
- COVID-19 accelerated digital adoption, driving India’s unicorn count from ~30 in 2020 to 100+ by mid-2022.
- VCs raised and deployed capital at record speeds: over $35 billion was invested in 2021 alone across all stages.
- Auxano Capital saw a 3x increase in LP interest, with more HNIs and family offices showing comfort with early-stage risk, especially in B2B and D2C categories.
- However, the post-2022 correction led to:
- Layoffs across startups
- Valuation markdowns
- LP skepticism around returns and governance
2024 and Beyond: VC 5.0 – Responsible Capital and Measured Growth
- As of 2024, the Indian VC ecosystem manages over $50 billion in cumulative AUM.
- LPs are demanding better transparency, corporate governance, and exit visibility.
- Auxano Capital emphasizes “exit-worthiness” even at the point of entry—identifying founders with clarity on monetization, path to profitability, and scalable distribution.
- Exits have improved with:
- Growing M&A activity (e.g., Tata’s acquisition of Curefit stake)
- Renewed interest in IPOs (e.g., Zomato, Mamaearth, ideaForge)
- Return of secondary sales as a tool for partial liquidity
Auxano Capital’s Lens: Building India’s Next-Gen Entrepreneurs
At Auxano, we believe India’s VC future must be anchored in sustainable capital, founder empathy, and institutional rigor. Some key principles we follow:
- Exit-readiness from Day 1: Not all startups should chase unicorn status. We back those building profitable, acquirable businesses.
- Skin in the Game: As a sponsor of the fund, we are the largest investor, alongside our LPs and founders, aligning outcomes across the table.
- Beyond Metro Mindsets: We scout tier-2/3 founders building for middle India, often overlooked by large funds.
- Founder Integrity > FOMO: We prioritize governance, frugality, and long-term trust over momentum chasing.
What lies ahead –
In spite and despite of what is happening in the ecosystem, viz, macroeconomic slowdowns or occasional missteps, the Indian VC ecosystem is becoming more mature, mission-driven, and outcome-focused.
- India is now #3 globally in startup count (behind the US and China).
- 100,000+ DPIIT-registered startups, with over 110 unicorns and 80,000+ active angel investors.
- With digital infrastructure (UPI, ONDC, Account Aggregator, OCEN) in play, we are entering a foundational decade for deep tech, public-good platforms, and cross-border SaaS.
At Auxano Capital, we remain committed to backing visionary entrepreneurs who don’t just chase scale—but build to last.
Author
Brijesh Damodaran
