Indian Startups Raised A Record $20.5 Bn In 2021 So Far

Over the past few weeks, it’s become clear that Indian startups are in the midst of a funding deluge in 2021. More than $10.8 Bn in funding was raised by Indian startups in the first six months of 2021 (till June 26) as per the Inc42 Plus H1 2021 report. But that is set to be surpassed by the Indian startup funding spree in the past four weeks, where over $9.75 Bn has been raised over 130 disclosed deals. The total funding raised by Indian startups in 2021 has now risen to $20.55 Bn, which means, on average, Indian startups raised $100.2 Mn per day this year.

The funding deluge in July has been led by mammoth rounds for Flipkart ($3.6 Bn) and Swiggy ($1.25 Bn). With one more week to go in July, we expect the funding in just this one month to overtake the funding in the past six months, given the frequency of mega rounds this year. It is a situation never seen before in the Indian startup ecosystem and one that is likely to define the next few quarters in the tech industry.

As the post-pandemic market drives adoption of technology solutions by businesses and consumers, the funding for Indian startups that continue to exhibit user and revenue growth is expected to continue rising in 2021 and 2022. This has also resulted in a wave of mergers & acquisitions in the India startup ecosystem, with the latest example being BYJU’S $500 Mn acquisition of US-based learning platform Epic.

As seen in our H1 2021 report, with 614 deals, half-yearly funding and deal count were at their historical peak. Compared to the year-ago period (H1 2020), total funding amount in H1 2021 surged 2.1x, while it recorded a 72% increase compared to H2 2020.

Interestingly, fintech, enterprise tech and edtech startups in India have spearheaded the funding bull run in 2021. However, in July, the funding rounds for Flipkart, Swiggy and Zomato (INR 4200 Cr) are likely to skew the funding numbers towards ecommerce and consumer services sectors.

In our H1 2021 report, we had conducted a time series forecasting based on quarterly time stamps to determine the total capital inflow in Indian startups in the calendar year 2021 (CY2021). As per our calculations, the total funding for the year was likely to range between $19 Bn and $23 Bn, estimated under usual and optimistic scenarios, respectively.

But given that July has nearly matched the tally for all six months in 2021, these predictions are likely to fall well short. Given the torrent of funding deals in the past month, we will be updating our funding amount and deal predictions for 2021 next week.