SUMMARY
Overall, Indian startups raised $2.73 Bn between January and March 2021
Udaan led the funding charts with the $280 Mn round led by Octahedron Capital and Moonstone Capital
As per Inc42 Plus projections, Indian startups are on course to raise $13 Bn in 2021
Growth-stage and late-stage funding remained strong in the first quarter (Q1) of 2021 in India, even as overall investment witnessed a decline compared to the first three months of 2020. About $2.73 Bn was invested in Indian startups between January 2021 and March 2021 as per Inc42 Plus analysis. This represented a 33% decline from $4.1 Bn reported in the same quarter last year.
Even as India is still recovering from the impact of the Covid-19 pandemic on the economy in the last three quarters of 2020, startups are projected to raise $13.7 Bn in startup funding this year, under the present conditions.
Last year, there was a 10% drop in the annual startup funding compared to 2019 — $11.5 Bn from $12.8 Bn in 2019. Given the severity of the pandemic, however, this was not seen as a discouraging sign, especially as the Indian startup ecosystem saw 924 deals in 2020, 14% higher than 2019.
According to the latest Inc42 Plus data, mega rounds for growth and late stage startups will be a chief factor behind the surge in India’s funding in 2021. The trend also stands true for the first quarter of 2020 as 10 biggest deals made up for about 50% or $1.38 Bn of the total funding ($2.73 Bn) in the startup ecosystem.
The $280 Mn investment in B2B ecommerce platform Udaan along with other outlier funding rounds have increased the overall value of funding this quarter. There were also many first in the unicorn club in this quarter. Innovacer became the first healthtech unicorn and Infra Market became the first infrastructure technology startup to have entered the club, all thanks to the investment rounds led by Tiger Global Management.
Besides this, BharatPe and Cred have taken a step closer to the unicorn club by hitting the valuation of $900 Mn and $800 Mn, respectively. While BharaPe is looking to raise about 700 Mn in debt in two years to expand its loan book, Cred plans to raise another $200 Mn at a valuation of $2 Bn to enter the unicorn club. Mobile Premier League (MPL) too inched closer to the unicorn club with the valuation of $800 Mn.
The Top 10 Investment Rounds Of First Quarter Of 2021
- Udaan: $280 Mn
- Zomato: $250 Mn
- BharatPe: $143 Mn
- Zetwerk: $120 Mn
- Infra.Market: $107 Mn
- Innovaccer: $105 Mn
- Dailyhunt: $100 Mn
- boAt: $100 Mn
- Mobile Premier League: $96 Mn
- Cred: $81 Mn
What Led To These Rounds?
- Udaan To Focus On SME Financing: The B2B ecommerce unicorn bagged $280 Mn from new investors Octahedron Capital and Moonstone Capital at an undisclosed valuation. The company’s existing investors also participated in this fundraise, with which Udaan intends to focus on expansion of products and categories on its platform. It also aims to expand SME financing capabilities as well as user experience.
- Zomato To Create $1 Bn War Chest Ahead Of IPO: Zomato is all set to go public this year, seeking a valuation of $8 Bn. Therefore, the company has been building up a war chest of a whopping $1 Bn by raising capital from the market. The company raised $250 Mn from five different investors, and also announced its foray into the nutraceuticals and health supplements market with the launch of a private label play in this segment.
- BharatPe Eyes $700 Mn Loan Book: BharaPe’s intention to go big on lending is clear with its plans to raise about $700 Mn to fund its loan book expansion. It has already raised about $35 Mn of debt this year. Beyond that, the company also received an equity investment of $108 Mn, bringing it a step closer to the unicorn club with $900 Mn valuation two years after its launch.
- Zetwerk Looks For Acquisition Opportunities: Bengaluru-based manufacturing services platform Zetwerk intends to go aggressive on business expansion by looking at smaller merger and acquisition (M&A) opportunities to grow inorganically. For this, the company raised about $120 Mn this quarter in Series D from Greenoaks Capital, Lightspeed Venture Partners and others at a volition of $600 Mn.
- Infra.Market Turns First Infrastructure Technology Unicorn: Mumbai-based Infra.Market entered the unicorn club this quarter, after raising $100 Mn in Series C round from Tiger Global, Accel Partners, Nexus Venture Partners and others. One of the most impressive points of this startup is that it has maintained profitability ever since the start of its journey in 2016. The company had noted a 5.5X increase in revenue, from INR 63 Cr in FY19 to INR 250 Cr in FY20. It reported a profit of INR 1.74 Cr in FY19 and INR 8.59 Cr in FY20. Infra.Market had previously claimed that it would hit a monthly revenue run rate of INR 150 Cr by the end of first quarter of 2021.
- Innovaccer Bets On User Growth For 2020: Noida and San Francisco-based Innovaccer became the first Indian healthtech unicorn after raising $104 Mn at a valuation of $1.3 Bn. The company analyses healthcare data to provide actionable insights to healthcare providers and has a massive user base in the western countries like the US. During the pandemic, it added some key clients like Cancer Treatment Centers of America, Washington DC-based Embright and California-based Valley Integrated Provider Network (VIPN).
- Dailyhunt Looks To Boost Its Short Video Offering Josh: Two months after entering the unicorn club, Dailyhunt bagged another cheque for $100 Mn this quarter to step its mark on the content ecosystem even further by boosting its short video offering Josh. Dailyhunt has more than 100K partners and individual creators in 14 languages, creating content for irs 300 Mn+ users. It’s Josh app, which was launched in July 2020, had already hit 85 Mn monthly active users, 40 Mn daily active users and more than 1.5 Bn video plays per day.
- After Pandemic Roadblock, boAt Eyes Make In India Boost: Consumer electronics brand boAt found itself in a mess last year, not because of the lack in demand but a halt in production. The company relied on Chinese manufacturers to build for them, but with international trade coming to a halt during the pandemic, the company had to ensure the product runway. One way they did so was by canceling their sales.The company started off 2021 by raising $100 Mn to prevent such situations in the future and build locally.
- MPL Basks In Glory Of Gaming Boom: Mobile Premier League (MPL) inched a little closer to the unicorn club this quarter, after raising $100 Mn at a valuation of $800 Mn. The company claims to have grown 4X between March and September 2020, with gross manufacturing value (GMV) increasing from $350 Mn to $1 Bn in the same time period. It claims to have 60 Mn users in India and another 3.5 Mn from Indonesia. However the financial year 2020 wasn’t a great one for the company as its losses grew 162%, from INR 106.3 Cr in FY19 to INR 278 Cr in FY20.
- Cred Eyes Ecommerce Success For Revenue Generation: Bengaluru-headquartered credit card bill payment app CRED has been focusing sharply on its ecommerce business, by allowing discovery of D2C brands as well as experiential services such as hospitality and travel. The company has added over 1,300 brands like Samsung, Myntra, Curefit and others to its ecommerce play to generate a revenue stream. In FY2020, the company had earned only INR 52 Lakh in operating revenue, whereas its total revenue was at INR 303 Cr. It had raised $81 Mn in its Series C round, and is now looking to raise another round to hit the unicorn club.
