Indian startups raised $ 39B in 2021 - TechCrunch
At the end of March Last year, as the virus began to spread across India, investors began to worry about the potential impact of a pandemic on their portfolio companies.
They handed out notes, and on April 1, wrote an open letter to the local startup ecosystem, advising companies to “prepare for the worst. ”
In the months that followed, the virus captured the South Asian market and, among other things, hit the brakes on financing activity. Scratching to steer through the unprecedented event, beginners started cutting costs. Some did not survive, and few got into fire sales. Many entrepreneurs and investors stepped up and volunteered to help the country fight the pandemic as well.
Investors were right about the impact of the virus on the country, and on its spread, on the companies trying to fuel the economy. But little was prepared for what was going to happen in a few quarters.
Scores of start-ups, many working in the edtech and fintech sectors, reported rapid growth. “We started to see three years and five years of growth in one year,” said Ashish Dave, Mirae Asset Venture’s chief business officer in India.
While a number of investors, including many tier 1 funds that are generally very active in India, remained cautious, a group of investors including Tiger moved Global, Falcon Edge Capital, and SoftBank to higher gear.
Navroz Udwadia of Alpha Wave Global (formerly Falcon Edge Capital) said at a conference earlier this year that its company is prone to being aggressive when most other assets are cautious. about market conditions.
Tiger Global backed Infra.Market in February this year, leading the valuation of the business-to-business e-commerce platform from $ 200 million to over $ 1 billion in a two-month span.
In a letter to investors in February, Tiger Global said that the opportunity it sees in areas such as consumer, enterprise, and financial technology in the US, China, and India is “very significant. compared to the level of capital that we regulate and grow at a level that is often difficult to comprehend. ”
Several factors worked in India’s favor, many investors said. Dry powder is plentiful in the market and investors are increasingly looking at growth pathways as emerging sectors as their next big bets. It also helped that Beijing was imposing a series of barriers on its own initiative and making it difficult for foreign currency to flow into China.
Another thing that was going on in India's favor was the highest number of IPOs we have seen this year. The food delivery company Zomato first had a big debate. Nykaa fashion trading, PolicyBazaar online insurer also featured strongly on the stock exchanges. Paytm filed for the largest IPO in the country, although the public market is still giving it less value than it was looking for.
Dave said Indian startups were going publicly addressing the exit challenge that many investors have faced over the years.
Investor bullishness on India was on full display in April, when the virus was starting to gain momentum again in the country.
Eight Indian startups - including Meesho social trading, fintech CRED, Groww investment platform, Gupshup business-to-business messaging platform, Chargebee payment company - joined the unicorn club in April. Minted Tiger made five of the ones.
The sudden movement of money also created a crunch for market talent. Startups began offering profit stock options and salary increases to employees to win and keep them.
In total, capital flowing to Indian private start-ups rose more than four times to about $ 39 billion this year and nearly three times from the previous high of $ 14.6 billion in 2019, according to data from the Tracxn visualization platform, which is also filed for IPO.
There are now 81 monkeys in India, 44 of whom joined the club this year. Several of the unicorns and many other fast - growing starters have picked up several rounds this year and the valuation has increased several times. Fintech Slice, which gives millions of Indians access to credit card features and helps them build credit scores, increased its complex valuation in a recent round it picked up from Insight Partners and Tiger Global.
CRED, for example, has built three rounds of funding and held talks for a fourth, TechCrunch said earlier. Indian edtech giant Byju's has raised more than $ 1.5 billion since last year. Zepto’s immediate grocery delivery startup, co-founded by two 19-year-old Stanford dropouts, doubled its value to $ 570 million in a span of two months.
Fintech Starter Jar, which is helping hundreds of thousands of Indians embark on their investment journey, is about to close around from a high - profile investor, said two acquaintances. The startup, set this year, is likely to increase its valuation by about 15 times in the new round.
Bangalore-based QuestBook, which is helping developers move to web3, is closing in from a number of investors including entrepreneur Balaji Srinivasan, according to one familiar with the web. issue. Polygon is in talks to build from Sequoia Capital India and Steadview Capital, TechCrunch reported this month. (Amazon is also in talks to support agritech start - ups, for all two people familiar with the matter.)
“Startups have become mainstream in India,” Dave said, pointing to several recent developments including Shark Tank’s arrival in the country. “Indian parents are no longer reluctant to tell their friends that their child is working at the beginning or that they have set one up. Everyone now knows what a startup is. For years, I had to explain to my father what to do for a living! ”
Tiger Global, which has made more than 50 investments in India this year, is currently making a concerted effort to support nine more start - ups in the country, according to someone familiar with its issue. In addition to Tiger Global, SoftBank, and Alpha Wave Global have also used bad capital in the country this year. SoftBank has invested more than $ 3 billion in India this year. Alpha Wave Global has poured over $ 2 billion.
The frenetic pace at which some of these companies have written reviews to Indian startups this year has also led many of their peers to take India more seriously. Temasek, which generally supports late start-up rates, has made 20 investments in India this year.
Insight Partners, which has become more fertile in India this year, has made some changes to its investment process in the country to accelerate the time it takes to get back on track, said two acquaintances. the case. It is currently in the process of supporting the Indian NFT platform Faze, according to two people familiar with these events.
General Catalyst is building a team in India, too. The company is also in talks to support several start-ups including OneCode, said one familiar with the matter. Andreessen Horowitz made its first investment in India this year. B Capital Group has also hired India’s new leader.
"Tiger has changed the game," said Dave. "Every asset on the planet has at some point reconsidered and reassessed its strategy and tried to find out what they could do best. Not everyone can play Tiger game. But what's the best thing you can do next? Because you can't play the same game as you used to. "
Sequoia Capital India, which has been investing in India for over a decade, remains the most prolific investor in India and Southeast Asia. It has made more than 60 investments this year.
Dave said he expects the pace of investments to continue in the new year. “The market will continue to become more competitive. Just take a look at the number of people who are starting to make angel money. ”
“Abroad, the market is huge. The number of investors and companies is also quite large. That is not yet true in India. So the competition for good contracts is very high. ”