What is an anchor investor in Indian startups?

 An anchor investor is a type of institutional investor who, by investing a significant amount of money in a startup or early-stage company, helps to "anchor" or stabilize the fundraising round. The investment by an anchor investor can also be seen as a vote of confidence in the company, which can attract other investors to participate in the round as well.

In the Indian startup ecosystem, anchor investors are typically large institutional investors such as venture capital firms, private equity firms, or hedge funds. These investors have a lot of experience investing in startups and can provide valuable guidance and support to the companies in which they invest. They also often have a network of industry contacts that can help the startup to grow and scale.

Anchor investors are typically brought in at the beginning of a funding round and are the lead investors. They may also participate in subsequent rounds of funding as the company grows and expands. With the increased interest of foreign venture capital and private equity firms in Indian start-ups, many Indian startups are attracting anchor investors from overseas too.

However, it is important to note that, Indian goverment also has some regulation in place that limits the FDI investments in Indian startups below certain threshold in some sectors, so it's best to consult with professionals in this regards.

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