The growth of India’s tech startup has not only mainstreamed entrepreneurship but also led to a boom in the local venture capital industry.

The top 10 Indian venture capitalists have participated in nearly 600 funding rounds and backed over 420 ventures in just the last 30 months.

The most active among the bunch has been Mumbai-based Blume Ventures, which participated in 91 rounds between 2019 till July this year, data from market intelligence platform Tracxn show. The 10-year-old firm – launched by Karthik Reddy and Sanjay Nath, both consulting professionals who were former members of the angel investing network Mumbai Angels – currently has 57 companies in its portfolio, ranging from sectors such as e-grocery, online pharmacy, logistics and ed-tech.

Considering Blume Ventures has backed around 145 startups in its lifetime, the majority of these have been in the last two years.

Matrix Partners India, founded in 2006, follows Blume Ventures in the Indian venture capital industry with 86 deals and 55 portfolio companies, according to Tracxn. Matrix’s investing experience dates decades back though since it’s the Indian arm of an American venture capital founded in 1977.

While much of the capital being poured into the world’s third-largest startup ecosystem is still foreign with the likes of New York-based Tiger Global and Japan’s Softbank funding big-ticket deals, Indian venture capitalists are upping their contribution, too. And their investments aren’t just about the number of deals or the size of the cheque.

The strategies of Indian venture capitalists have evolved over the years, and they believe they bring a unique perspective that their foreign counterparts cannot.

Indian tech startups

A decade ago, there were barely four or five mainstream Indian venture capital funds, which were mostly making very safe bets, largely in the enterprise space. A handful of the more daring ones backed e-commerce player Flipkart, digital wallet Paytm and ride-hailing firm Ola that had already caught the attention of global investors.

A major reason for this paucity in Indian venture capitalists was because the startup landscape was in its early years and there were not many attractive investment options.

“If you asked people even back in 2016 how many unicorns India would have by 2021, they would guess eight or nine,” Pranav Pai, founding partner and chief investment officer of Bengaluru-based 3one4 Capital, told Quartz.

There are now at least 55 unicorns in India, and there has been a rapid acceleration not just in the number of startups being launched, but also in the variety of technologies they are experimenting with.

This increase in investment options has given investors in India the courage to place bets on local firms. For instance, in 3one4’s own portfolio, there’s online meat delivery company Licious, human resources software platform DarwinBox, digital banking app Juniper, and digital media company Pocket Aces, among others.

Moreover, with bets paying off, investors’ risk appetite is increasing. The next decade “will still see investment in fintech but the profile will evolve. Newer platforms like insurance, savings and brokerages will emerge,” Pai said. “There will also be new types of consumer-facing companies and single-brand models like Licious and Mamaearth will grow.”

The growth in India’s startup ecosystem has been phenomenal even during the pandemic. In fact, a host of online companies in sectors such as entertainment, groceries, and edtech, have benefited from Covid-19 lockdowns.

In 2020, Indian startups raised over $10 billion across more than 1,200 deals. Though the total investment was lower than 2019’s $14.5 billion, the number of deals was up 20%.

“The momentum that impact investing had gathered even pre-Covid-19 has only accelerated with far more attention now on building resilience and catering to the needs of lower-income populations and small businesses,” said Roopa Kudva, managing director of Omidyar Network India, which invests in tech startups working on social inclusion.

Indian versus global

While many of the nascent Indian venture capital players do not have ultra deep-pockets like their foreign rivals, they believe they have a leg up in one way: they are acutely aware of the Indian experience.

“Startups here scale up differently to those in the US or Europe,” said Arpit Chundawat, co-founder of Meteor Ventures, a seven-month-old seed fund and incubation firm. “We know the consumer mindset. For instance, we know that irrespective of the segment, giving discounts means there is a higher chance of conversions.”

Local venture capitalists can also help entrepreneurs with their understanding of how regulations work and with the help of their networks.

“Every international market is different and has its own intricacies,” said Pai. “It would be almost comical to just sweep into a new domicile to compete. We have aimed to be India-specialists in venture capital and we invest seriously to understand this ecosystem very well.”

“We have built a bottom-up graph of the reality of the market, like how and why a lot of activity is still run offline, what it is like to be working with controls and administrative systems to secure permissions, and so on,” said Pai. “It matters whether or not the banks work with you, or whether the market makers and investment bankers will work with you when a company is IPO ready.”

Despite the leaps made, there is still work to be done.

Lack of diversity

Just like the west, Indian venture capital firms lack gender diversity. Among the top 10 most active Indian venture capital firms, eight are headed by men.

This lack of diversity is part of a larger problem. Indian tech startup ecosystem has had far fewer female entrepreneurs. A measly 13% of unicorns in India have a female co-founder and women are sole founders of less than 6% of startups in the country. This gender problem runs deep. At India’s premium IITs, which feeds the startup founding pool, just two out of 10 students and one in 10 faculty members are female.

Meteor Ventures co-founder Sonal Bali realises she’s an anomaly but believes things are changing. “You will see more and more female-driven venture capital firms and startups impacting the ecosystem,” she said.

Bridging the divide of gender, age, race, caste and pedigree could prove to be a key to success for Indian venture capitalists to go a step further in bringing India’s local strengths to the table.

“The more varied the thinking, the better the startup and products, and the better for all of us,” said Freshworks CEO Girish Mathrubootham. “If a singular group of people has access to capital, their investments are likely to be in businesses founded by the same group. By closing the gap among race and gender, the world will see an influx of new ideas and increased creativity in business models.”

This article first appeared on Quartz.