UHNIs ARE INCREASINGLY TURNING TO VENTURE CAPITAL AND PRIVATE EQUITY ECOSYSTEM AS AN ASSET CLASS
Homegrown tech ventures are going to boom and this is going to be funded by the rising high net-worth individuals (HNIs). According to the latest report by 256 Network and Praxis Global Alliance India, HNIs are expected to invest $30 billion in Indian tech startups by 2025.
The report – ‘Turning Ideas to Gold’ predicts that 150 unicorns would emerge by the year 2025 in India. The report also stated that more than 55,000 Indian startups raised over $70 billion in funding between 2014 and 2020.
“VC/PE funds raised during periods of economic crisis tend to have better returns when compared to those raised in non-crisis periods,” the report pointed out.
As per the report, the total market capitalization of public tech companies is 12.6% of India’s GDP while the valuation of private tech companies is 10.2% of the GDP.
The report noted that the number of (ultra-high net-worth individuals) UHNIs that includes celebrities and NRIs is growing and the number would touch 10,000. The cumulative wealth of $700 billion, says the report would help fund startups.
“Family offices are being set up as full-service private wealth management services to cater to one or a small clutch of these ultra-high net-worth individuals,” the report said.
At present, India has more than 140 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. As per the report, around 190 Soonicorns are expected to become Unicorns by 2025.
Technology investments have emerged as a lucrative alternative asset class to traditional investments like equity, debt, commodities, and real estate, experts said.
