Indian Startup Funding Report June 2016 – 3 Startups Funded Everyday This Month

In May 2016, we saw a number of changes in the existing trends of the Indian startup ecosystem. Health-tech was the most favoured sector for investment, hyperlocal players showed strong survival instincts and also acquired smaller players. Given our data driven mindset at Inc42 Datalab, we collected and analysed data for the month of June.

Around 90 startups got funded in June 2016, 3.4% more as compared to last month (May 2016) and 18.4% more as compared to June 2015. This month ecommerce has levelled with health-tech as the most favoured funding sector, suggesting last month’s finding might have just been a temporary dip in the trend. Furthermore, number of acquisitions has decreased by 13.3% as compared to last month and increased by 30% as compared to June 2015. 2 mergers, 4 acqui-hire, and 7 acquisitions were observed this month.

Let’s see what we found!

Fading Million Dollar Cheques In Early Stage Is Only For Q1 2016

Finally we have a quarterly trend to confirm that the observed trend of fading million dollar funding in early stage startups was applicable just for Q1 of 2016. The general trend as observed since Q1 of 2015 holds true.

Bangalore Neck And Neck With Delhi

For the last two months, we observed Delhi to be the top city in terms of number of startup funding deals. The trend also suggested a saturation for Bangalore ecosystem. But, this month Bangalore has once again taken the lead, but just by 12%. Whether it would be able to challenge Delhi’s newly established position as top startup destination is unknown.

Ecommerce Levels With HealthTech

In May 2016, we observed Health-tech dethroning ecommerce, but this month ecommerce has leveled with health-tech in number of deals. Both, are observed to occupy 10% of the market respectively.

Late Stage Funding Crunch Trend Confirmed

The trend of funding for startups in late stage (both in number and amount) continues to show a steady drop. The $100 Mn funding of Fractal Analytics accounts for the slight rise in the funding curve.

Other Key Takeaways

• On an average, 3 startups were funded per day this month (June 2016).
• Although there were more late stage deals this June over last year, there was a 60% drop in deals value as compared to June 2015.
• Out of the 13 M&As, around 28% M&As were observed in Ecommerce and MarTech sectors.
• Voonik, a fashion commerce startup, has acqui-hired three fashion-tech startups – Zohraa, Picksilk and Styl. Automobile ecommerce company Hopcar and Spinny has signed a merger. This trend in ecommerce is consistent with that observed for hyperlocal in May 2016, suggesting market saturation in these sectors.
• Union Cabinet, chaired by PM Narendra Modi, approved the INR 10,000 Cr. corpus of ‘Fund of Funds for Startups’.
• JSW Ventures has received mandatory clearances from SEBI to invest $15 Mn (INR 100 crores) in early stage startups over a period of three years. The initial focus will be on tech startups operating in education, healthcare, financial services, SaaS and enterprise software space.
• Founders of Quadria Capital Fund L.P. have launched $10 Mn (INR 65 Cr) healthcare-focused venture capital fund HealthQuad.

[Research & Analysis by Ankan Das; Graphics & Designs by Satya Yadav]