India’s startup economy is reeling from the financial disruption caused by the pandemic, with growth capital and funding deals hard to come by
While $4.1 Bn was invested in Indian startups in Q1 2020, the amount fell 74% to $1.05 Bn in Q2 2020
The funding amount has since recovered from the dismal Q2 numbers, increasing 167% to $2.81 Bn in Q3, with Sequoia India, Accel and Mumbai Angels Network among the top 11 investors
The second quarter of 2020 saw India’s startup economy implode, with an acute shortfall in funding and a consequent lack of growth capital. It was a reflection of the dire time being faced by the Indian economy as a whole, as the financial disruption caused by the Covid-19 pandemic had crippled businesses across sectors and made furloughs, layoffs and pay cuts for employees a common sight.
According to an Inc42 Plus analysis, between January to September 2020, so far $8.1 Bn has been invested into Indian startups across 652 funding deals. Of the total funding amount, 51% or $4.1 Bn was invested in startups in the first quarter (Q1) of 2020 across 208 deals. Thereon, the funding amount fell drastically, by more than 74% to $1.05 Bn across 179 deals in Q2 2020. The numbers for Q3 2020 have recovered from the previous quarter, with the funding amount increasing by 167% to $2.8 Bn and the deal count increasing by 46% to 261 deals.
The Top 11 Investors [Q3 2020]
Based on our analysis, we’ve collated 11 top investors for Indian startups in Q3 2020:
- Sequoia India: The venture capital fund has for long been bullish about the Indian startup economy, and was so about its revival amid the pandemic too, having participated in 12 funding deals this quarter. Most notably, Sequoia Capital India was one of the investors in edtech platform Unacademy’s $150 Mn funding round which saw it enter the unicorn club. It also led Bengaluru-based virtual events platform Airmeet’s Series A round worth $12 Mn earlier this month.
- 100X.VC: The Mumbai-based venture capital firm participated in nine funding deals this quarter. Last month, the Sanjay Mehta led firm revealed its Class 02 investments in nine seed-stage startups from various sectors such as Pracify, Mindpeers and BatteryPool, among others.
- Accel Partners: The US-based venture capital firm with India-focused funds, participated in eight funding deals this quarter. Accel, which counts Indian startups such as Cure.fit and Swiggy among others in its portfolio, was most notably one of the investors in Bengaluru-based home interior services startup HomeLane’s $8 Mn funding round last month.
- Mumbai Angels Network: The venture investing platform for new startups, participated in funding deals this quarter. Most notably, Mumbai Angels was one of the investors in defence tech startup Big Bang Boom Solutions’ $1.5 Mn Series A funding round. It also participated in Delhi-based electric mobility startup BluSmart’s $7 Mn worth seed funding round earlier this month.
- LetsVenture: The Singapore-headquartered online funding platform also participated in seven funding deals in India this quarter. One of these was BluSmart Mobility’s seed funding round, while another was short video sharing app and Indian TikTok alternative Mitron’s seed funding round worth INR 2 Cr in July. LetsVenture was also one of the 12 investors in Mitron’s Series A round worth $5 Mn in August.
- Matrix Partners: The US-based private equity firm which focuses on venture capital investments in early and seed-stage startups in the US and India, participated in six funding deals in India this quarter. One of these was Bengaluru-based online lending startup Avail Finance’s $11.8 Mn Series B funding round last month. Matrix was also one of the lead investors in B2B marketplace Bijnis’ $10 Mn worth Series A funding round in July.
- SAIF Partners: The leading private equity firm participated in six funding deals this quarter. Along with Matrix, it was one of the investors in fintech platform Jodo for its $3.8 Mn worth seed round in July. Earlier this month, SAIF Partners was one of the investors in the $5.1 Mn Series A1 funding round for analytics platform SenseHawk.
- Better Capital: The Silicon Valley-headquartered micro venture firm participated in six funding deals this quarter. It led the $220K seed round for data entry and document workflow automation software DocSumo last month. Better Capital also led the pre-Series A round for Inspection AI startup Inspekt Labs.
- Y Combinator: The US-based seed money startup accelerator participated in five funding deals in India this quarter. One of these for early-stage payments startup goDutch which raised $1.7 Mn in a seed round led by venture capital firm Matrix India in July.
- Nexus Venture Partners: The Silicon Valley-headquartered early-stage venture capital firm participated in five funding deals in Indian this quarter. It was the lead investor in short video sharing app Mitron’s Series A funding round worth $5 Mn last month. Nexus was also one of the participants in the $25 Mn Series B funding round of San Francisco and Bengaluru-based software technology company Hasura earlier this month.
- 3one4 Capital: The Bengaluru-based early-stage venture capital firm participated in five funding deals for Indian startups this quarter. Some of the notable startups backed by it in this period were Bengaluru-based healthtech startup Dozee and Mitron.
For More Details On India’s Startup Funding Climate In Q3 2020, Read Inc42 Plus’ Latest Q3 Indian Startup Funding Report.
Update: 1st October 2020, 2:50 PM
- 3one4 Capital’s Logo updated
- 100X VC included in the list