There has been some disagreement as to whether India experienced a “bubble burst” in the country’s tech business sector. As the name implies, there was a period of rapid growth (bubble) followed by a downfall (burst).

The enormous success of an e-commerce site during a six year period of time produced a major funding boom in India. International investors from private equity and hedge funds to large investment firms created several “unicorns” immediately. In the investment industry, a unicorn is a tech startup company that reaches a one billion dollar market value. Investors in India chased after the next big opportunity. They competed to invest larger amounts earlier than each other.

A point of disagreement was did an actual bubble exist. Some believed that high values and huge amounts of funding created a bubble. Others felt that this was a misconception because all of the factors of a bubble needed to be evident. In order to have a bubble, these elements were needed: demand vs supply.

How does this work — panic! A few initial financial profits drew in speculators as capital investors who were only interested in making money quickly. And, few founders start shell companies that get funded and turned over quickly, few tourist investors buy stock only because they anticipated an increase in prices. By the way, it would be a great honor for us to mention about few hedge fund VCs who force to get LPs who push money to offshore Delaware accounts like Singapore, Netherlands, and try to formalize the investments by bringing those monies back to India. But, wait. Let’s check the facts before we can disclose much.

Here’s the question: Did India’s startup funding scene in 2015 meet the characteristics of a bubble?

The initial investors were not looking to make a fast buck. They were some of the most reputed investors in the world. These investors did not sell out at the first available opportunity. They actually invested more funds.• They were in this for a long term investment. There was not a panic in the market. The number of new deals increased. In the first three-quarters of 2016, there have been 571 investments compared to 575 deals for the whole of 2015.

This information led to the conclusion, that there probably never was a startup bubble or that one has burst. Some companies have experienced less funding and reduced their workforce, but this can be explained by the fact that most companies require a time of organization and change in order to be successful. The past two years have been used for readjustments. Ironically, this meant that the companies were succeeding. Investors were not giving up.

How healthy is India’s investment ecosystem? The tech startups have remained in India. Investors have been more diverse. Early estimates showed that the total capital that is expected to come into India over the next two years is 16.5 billion dollars.

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