Why VCs Are Still Backing Indian Startups

Growth stocks such as Southeast Asia's largest ride-hailing and grocery delivery service Grab, e-commerce giant Sea Limited, and Indian companies Paytm, Zomato and Freshworks are examples of unicorns that have been performing poorly compared to the markets. 

Even after the falling performance of these startups, Amit Anand, co-founder of Singapore-based venture capital fund Jungle Ventures, told CNBC that three of his companies have postponed their IPO plans. But "in the medium to long term, the company will definitely be open to the public," he said.

Sequoia Capital has postponed the closing date of the $2.8 billion Indian and Southeast Asian Fund, the media reported. Reasons for this include financial irregularities and corporate governance issues in some of his portfolio companies.

The reason why VC funds that raise money from investors, from pension and university funds to wealthy individuals, find the region attractive is due to the rapid growth of start-ups. This is due to favorable demographic trends. Promising trends include a rapidly expanding middle class, a young population, and an increase in digital adoption. Some of these trends show acceleration after COVID.