Indian Startups raise $12.1 billion within First Six Months of FY21
To break it down, from January to June 2021, there were 31 deals worth more than $100 million, according to the report. According to the data, there were 873 deals totaling $13 billion in 2019, compared to 747 deals totaling $10.8 billion in 2018.
Companies at various stages of development have all raised funds, indicating their growing influence, particularly in sectors such as edtech, healthtech, agritech, social commerce, and hyperlocal delivery.
The continued inflow of funds at exorbitant valuations aided in propelling a record number of startups into the unicorn club—privately held companies valued at $1 billion or more.
According to venture capitalists, entrepreneurs, and industry insiders, more funds have lined up to back young and evolved startups as a result of the increased adoption of digital technology across businesses following the Covid-19 pandemic.
According to the data, there were more $100 million-plus funding rounds in the last six months, with late-stage startups raising larger rounds at headline-grabbing valuations.
In the January-June period, notable fundraising deals included those by edtech leader Byju's ($1 billion), food delivery platforms Swiggy ($800 million) and Zomato ($576 million), regional language social media app ShareChat ($502 million), and fantasy gaming startup Dream11 ($400 million).
This compares to just over $5 billion earned by companies during the January-June period last year. So far this year, the space has added up to 16 unicorns across segments, compared to about 11 unicorns added in the entire year of 2020.
Ola recently received a $500 million investment. Earlier this week, Tiger Global led a $144 million funding round for social commerce start-up DealShare, while fintech player Pine Labs raised $315 million from a group of investors. Indian start-ups appear to be on a fundraising spree; faster adoption of technology in a Covid-affected world has prompted a slew of investors to back internet companies.
Pine Labs, a digital payments provider, raised $315 million in new capital as part of its ongoing fundraising, bringing the round to $600 million.This came just a month after the company closed a $285 million secondary fundraise from investors including Baron Capital Group, Duro Capital, Marshall Wace, Moore Strategic Ventures, and Ward Ferry Management.
In the first half of this year, there were 31 such transactions, compared to 19 in the second half of 2020. There were nine $100 million-plus transactions in the first half of 2020.
“While global investor interest in leaders in the Indian consumer tech landscape has consistently been strong, we are now seeing multiple software businesses coming out of India…raise $100 million-plus growth rounds,” said Shweta Bhatia, partner and head of technology investments for India at Eight Roads Ventures.
According to data, Sequoia Capital India, Tiger Global, and Accel India led the majority of VC investments. But 2021 is shaping up to be a year for start-ups in more ways than one. The sector is also buzzing with significant M&A (mergers and acquisitions) transactions and proposed IPO (initial public offering) launches. New entrant in the unicorn club, PharmEasy recently acquired a majority stake in diagnostic chain Thyrocare for Rs 4,546 crore.
Byju's, on the other hand, walked away with one of the largest M&A deals in the space with it’s nearly $1 billion acquisition of Aakash Educational Services.
A slew of established start-ups, flush with capital and having reached a certain scale, are preparing to go public in the coming months, with Zomato leading the pack. On July 14, the food tech firm will begin accepting subscriptions for its Rs 9,375-crore initial public offering (IPO). Paytm, led by Vijay Shekhar Sharma, plans to go public in November.
“I strongly believe that Indian startups do not need to look out to other countries for growth. There is a tremendous amount of market depth in India,” Zomato founder and CEO Deepinder Goyal had said last year.
According to Venture Intelligence data, the ecommerce sector received the most capital inflows in the last six months, totaling $4.15 billion, while fintech companies received $2.3 billion, logistics companies received $1.9 billion, and enterprise software firms received $1.6 billion.
According to analysts, international markets will be the next frontiers of growth for many start-ups. Once a company is able to scale up its operations in the top 20-30 Indian cities, growth opportunities become limited. These segments are likely to continue attracting investments in the near as new types of investors, such as limited partners and micro VCs, become more active.
Launched in 2002, the Venture Intelligence service is India's leading source of information and analysis on private company financials, transactions (private equity, venture capital, and M&A), and valuations.