Venture Capital Success Stories: Case Studies of Thriving Startups

Venture capital and startups thrive together in the business world. In fact, it is difficult to imagine one’s success without the other.

Venture capital companies offer finances to new startups with growth potential. In exchange, the VC firms get an equity stake in the startup company. This is a win-win for both parties.

Getting someone to invest in an idea is not so simple. It takes time and a lot of research to find the perfect strategy to convince someone and show how you can help them earn profits.

GrowthJockey here brings you the success stories of some thriving startups that used venture capital in India to succeed. Take inspiration from every insightful case study on venture capital funding to inspire your entrepreneurial journey.

Case Studies on Venture Capital Funding for Successful Indian Startups

Here, we have listed some remarkable success stories of startups that thrived on venture capital investment. Each case study offers valuable insights and lessons from startups that dared to dream big.

Case Study #1: Physics Wallah

Founded by humble B Tech dropout Alekh Pandey, Physics Walla is a Rs 9,160 crore ed-tech company. It is one of the most profit-making ed-tech startups in India. With inception in 2016, Physics Wallah became the 101st unicorn backed by venture capital in India.

Alekh started the venture as a physics teacher and YouTube personality. Beginning with a YouTube channel, the company earns profits through engaging and informative online classes.

It offered free JEE and NEET exam preparation videos and now courses across K-12, competitive exams, and UPSC. It has a mobile app that offers video lessons, mock tests, and more.

The startup raised Rs 825 crores from its leading investors in the Series A funding round. The VC investors include WestBridge Capital and GSV Ventures.

Success Strategies and Company Insights

Here are some strategies that highlight the success of Physics Wallah:

• Becoming YouTube Guru: With 9.17 million subscribers, PhysicsWalla earned almost half of its revenue through online classes on YouTube.

• Niche Targeting: He ditched the crowded JEE/NEET space to teach physics to ICSE students and gained a following of die-hard fans from the ground up.

• Word-of-Mouth Marketing: Building a strong community before launching the product helped the company in many ways.

• Ed-Tech App: The Physics Wallah ed-tech app has over 5M downloads, 3 lakh daily active users, and over 90 minutes of consumption time.

Case Study #2: Flipkart

Two ex-Amazon employees, Sachin Bansal and Binny Bansal, started Flipkart in 2007. Today, it is one of the largest eCommerce companies in India. Drawing inspiration from Amazon, Flipkart started the platform to sell books online.

As the site picked up, it started selling other products. Today, Flipkart sells over 150 million products across 80+ categories^[1].

Success Strategies and Company Insights

Here are some key insights on Flipkart’s success journey to learn from.

• Targeting Underserved Segments: Earlier, most eCommerce platforms centered around big cities. However, Flipkart saw an opportunity to deliver products to underserved customer segments in small cities.

• Known for Dynamic Taglines for Marketing: Taglines, like if it’s trending, it’s on Flipkart, ab har wish hogi puri, abhi nahi toh kabhi nahi, helped the brand connect and engage the audience with different offers and approaches.

• Big Billion Day Sale: Offering products at cheap prices helped the brand get free word-of-mouth publicity.

• Relevant and Relatable: Flipkart keeps the audience engaged by offering different entertaining activities, offering discounts on special occasions, and sharing engaging content on social media.

From selling 20 packages in the first year to acquiring ANS Commerce, eBay India, and Myntra, Flipkart has come a long way and proved its potential. In 2009, Flipkart raised its first institutional round of funds of $1 million. Tiger Global Management invested $10 million in the same year.

Till now, the company has gone through 28 venture capital fund rounds. Despite witnessing a decline due to demergers, the company’s current valuation stands at $35 billion.

Case Study #3: Zomato

Formerly known as Foodiebay, Zomato’s success story is among the most inspiring. The company started as a food directory website. After rebranding in 2010, the company runs on an on-demand food delivery service and restaurant aggregator model.

Founded in 2008 by two IITians, Deepinder Goyal and Pankaj Chaddah, Zomato is one of the most valuable companies that emerged from the startup ecosystem.

Success Strategies and Company Insights

Here are some highlights of Zomato’s success strategies and insights.

• Power of Live Order Details: Live order tracking and map-based location helped the company grow by offering transparency and convenience

• Convenience in the Pocket: Zomato also kept up with the smartphone boom and launched its mobile application promptly, contributing to its growth.

• Zomato Owns the Meme Game: Zomato’s social media profiles are full of hilarious content, considering that its target audience is young and shares many memes.

• Top-notch Content Marketing: It uses content marketing to make social media users aware that the brand not only exists but has a voice.

• Target Market: The company focuses on delivering food and launches offers considering its young audience. Given their higher frequency of food orders, they cater to urban millennials and Gen Z consumers.

It has now become India’s food-tech unicorn, having raised several rounds of venture capital funding. Its VC portfolio includes investors like Edge India, Sequoia Capital, Tiger Global, Temasek, and Alibaba’s Ant Financial.

Case Study #4: Ola

Ola is one of the world’s largest ride-hailing companies, and it started in India. Founded as Ola Cabs by Ankit Bhati and Bhavish Aggarwal in 2010, Ola mobile app allows users to book cabs, auto-rickshaws, bikes, and shuttle buses.

Ola is the first company to bridge the gap between cab owners and commuters. Today, millions of users book their rides using Ola in over 250 cities in India. The company employs more than 2.5 million^[2] driver-partners.

Success Strategies and Company Insights

• Bad Experience Turned into Startup: An unpleasant experience during a car rental helped Bhavish Aggarwal start this billion-dollar business.

• Started Local, Gone Global: In 2018, Ola expanded into its first overseas market, Australia. It also operates a cab-hailing service in the UK and New Zealand.

• Collaborations for Mass Reach: With the strategic partnership, Ola offered a rental car facility to Make My Trip customers for pick up and drop off.

Since its start, Ola has found immediate VC backing from leading investors such as Softbank, Vanguard and Tiger Global. In 2015, Ola raised $400 million in venture capital funds.

As a result, it became the third-most valuable venture-backed company in India. The company’s current value is about $2 billion.

Case Study #5: Oyo Rooms

Oyo Rooms is a well-known startup in the Indian business market. Started by a 17-year-old boy (Ritesh Aggarwal), it is a hospitality chain of franchised hotels, rooms and living spaces.

Today, Oyo Rooms has 23,000 hotels^[3], 8,50,000 rooms, and 46,000 vacation homes under its name. Launched on the concept of Airbnb, the startup scaled internally, covering countries like the USA, Brazil, Japan, China, etc.

Success Strategies and Company Insights

• Franchise Model: Ritesh Aggarwal partnered with hotel owners and helped them with technology, branding, and support.

• Technology Solutions: The company's app, central reservation system, and payment gateway are key to its success.

• Continuous Innovation: OYO Workspaces are other ventures that helped the company expand its revenue streams.

In 2015, OYO received $25 million^[4] in funding from Lightspeed India, Sequoia, and others. The company also secured $100 million^[5] in venture capital Series C funding from SoftBank.

Final Thoughts

Starting a business is a journey of the highs and lows one faces when writing a success story. Take a cue from these successful entrepreneurs who made their way through continuous innovation.

While raising venture capital could be challenging, it is crucial to keep innovating for undeniable prospects. The above case studies prove that the opportunities are available, and it only takes a potential business idea to get a venture capital investment.

Dealing with the technicalities and hassles of seeking funding adds another hurdle. GrowthJockey can help you here to create strategies for revenue growth and increase brand presence.

FAQs

1. What are some of the most reputed VC firms in India?

Several venture capital firms operate in India, supporting cutting-edge startups. It includes the following –

• Chiratae Ventures

• Matrix Partners

• 3one4 Capital

• Accel India

• Sequoia Capital

• Nexus Venture Partners

• Blume Ventures

• Kalaari Capital

2. What is the biggest challenge in securing venture capital funding?

One of the biggest challenges in securing VC funding is the competitive market and limited funding options. As a result, it becomes difficult for the startup founders to convince investors of the best potential returns.

It requires startups to communicate their value propositions effectively. They should focus on showing the market opportunity and their growth strategy, which stands out among other ventures.

Apart from this, the business landscape changes every few months. Further, market fluctuations and economic risks demand a resilient team of founders to secure funds.

3. Is it hard to get VC funding?

Securing VC funding can become difficult for early-stage startups. This is especially true in India, which has fewer funding options and limited funds available.

Apart from this, convincing someone to invest in your idea is challenging. You must show them that your idea is worth the risk and offers a high return on investment. Further, most investors are more risk-averse regarding venture capital in India than in other countries. They often prioritise investing in established firms.

The complex regulatory environment also increased the hardships for founders. It makes it difficult for startups to secure funding and get off the ground.

4. What is the success rate of VC startups?

Statistics show that only 1 out of 10 VC-backed startups survive, accounting for a 10% success r^[6]ate.

5. Why is venture capital good for startups?

Venture capital is one of the best available options for startups to secure funding. Getting investment in return on private equity is an excellent fit for startups looking for rapid growth.

Further, it allows the founder to avoid any debt and monthly repayment of loans. Though VC funding comes with some potential risks, it is one of the best ways to raise capital for startups. So, if your startup needs a big upfront investment and has the potential for rapid expansion, VC is a great scaling option.

Startup founders can weigh the risks, such as giving up some ownership or lack of creative control, against the benefits.

1. 150 million products across 80+ categories - Link ↑
2. 2.5 million - Link ↑
3. 23,000 hotels - Link ↑
4. $25 million - Link ↑
5. $100 million - Link ↑
6. 10% success r - Link ↑