Indian UHNIs (ultra-high net worth individuals) are expected to invest up to $30 billion in tech-startups in the country by 2025, reflecting the growing investment opportunity for home-grown tech ventures, stated a report by 256 Network and Praxis Global Alliance.
India is estimated to have approximately 10,000 UHNIs, which will include business leaders, NRIs, celebrities and digital entrepreneurs with a cumulative wealth of $700 billion by 2024. Family offices that are set up as full-service private wealth management services to cater to one, or a small clutch of these UHNIs, added the report.
The report defines UHNIs as those having net worth of more than $30 million. India has about 140-plus family offices catering to Indian UHNIs and heavily investing in the Indian startup space, they have been pro-actively involved in over 50 such deals every year since 2015.
Kris Gopalakrishnan, co-founder, Infosys and promoter of Pratithi Family Office, stated "Investments in innovative startups have emerged as a lucrative alternate asset class when compared to traditional investments like equity, debt, commodities, and real estate. Backing such companies requires deep expertise, strong networks, patience, and sufficient capital. Funds run by professionals provide that opportunity to Indian Family Offices and UHNIs, he added.
256 Network is a peer-built network of decision-makers investing in the global alternatives market. Sunil Kant Munjal, chairman of Hero Enterprises, said that the pandemic has seen the rise of a new entrepreneurial class that is savvier. Several startups are launching India-specific solutions while repeat founders are targeting bolder issues. Many are unlocking value through private markets and it is reassuring to see multi-generational entrepreneurs viewing this space as a vehicle to create wealth, he added.
Madhur Singhal, Managing Partner and CEO of Praxis Global Alliance, stated private wealth in India is burgeoning and UHNIs are increasingly turning to venture capital and the private equity ecosystem as an asset class. "Incumbents, digital entrepreneurs, celebrities, and NRIs are setting up family offices and investing in the Indian startup ecosystem which has generated 14 new unicorns in 2021 so far. "These family offices are providing businesses with patient capital and we are closely following the role that these family offices play in the Indian startup ecosystem," he added.
As per the report about 190 'Soonicorns' are estimated to become unicorns by 2025. Currently, India has 56 unicorns of which 14 were added in 2021. Also, 'digital first' solution providers are establishing India as a deep-tech hub. India currently has over 950 AI startups, more than 480 IOT startups, more than 80 AR/VR startups and over 30 robotics startups.
The report stated more than 55,000 Indian startups raised over $70 billion in funding between 2014-20. The opportunity to leverage India's technology sector growth remains firmly in the private market as more than 250 private Indian tech companies with valuations above $100 million have the potential to go public in the medium term.