“(I am) surprised that the number of investments is the same. The quality of entrepreneurs is vastly improved and while one can question valuations, even the biggest critics acknowledge that some high-quality and valuable businesses are being built leveraging technology. Which is why it is surprising that the opportunity pipeline has not widened. It should improve overall as a lot many ideas are now getting the initial funding and purchasing power continues to improve,” said Abhay Pandey, partner at A91 Partners, a growth investment firm.Pandey added that “three to four firms have been super-active over the last few quarters, causing a frenzy in parts of the growth market.”The funding boom comes in the face of a macroeconomic slowdown in India, and an internet funding slowdown in China and the US. These are beginning to make investors more watchful, as valuations rise with young companies raising hundreds of millions of dollars rapidly.“The capital from India-based funds has been stable. Strong flows from overseas over short periods cause the frenzy as we are witnessing today. With China certainly slowing and doubts emerging on valuations of a few large global companies, it is only a matter of time before the India sentiment gets sober,” Pandey said.

To be sure, investors continue to see the Indian market’s long-term value, with valuations being cyclical.

“Valuations are like stock prices; they go through their own cycles of highs and lows. As a long-term investor, we are more focused on value that the portfolio will build over the next decade. More late-stage investors mean Indian startups will have enough cash to scale up in the later stages of their evolution,” said Chowdhri of Stellaris.