2016 witnessed a decline in Indian tech startup funding, receding venture capital, and a definite late-stage funding crunch in India. But 2017 began with a bang and have created new hopes for the Indian startup ecosystem.
According to Inc42 Datalabs, over $5.56 Bn was invested across 452 Indian tech startups during the period January-June 2017. While in Q1 2017 about $1.46 Bn was invested across 206 startups, Q2 witnessed 217 deals amounting to $4.1 Bn in funding. Interestingly, in Q2 2017, most of the amount was contributed by Flipkart’s $1.4 Bn funding in the month of April and Paytm’s $1.4 Bn round led by Softbank Group in May.
2017 has also been considered as the year of M&As. While the Flipkart-Snapdeal merger is yet to take place, about 71 other M&As took place this year during H1 2017. Headliners include eBay selling its India business to Flipkart, Housing getting acquired by PropTiger among others.
The year also witnessed the launch of several new funds, VCs raising India-specific funds, and the Department of Industrial Policy and Promotion (DIPP) asking the Finance Ministry to release an additional $247.7 Mn under the Fund of Funds for startups (FFS) in FY ‘17-18. All in all, with different firms, organisations, and individuals coming to support startups financially; startup funding activity in India is expected to witness a significant spike.
Indian Tech Startup Funding H1 2017: Overview
Tech startup funding activity in India witnessed a 3% hike in H1 2017. This figure is in comparison to the number of deals that took place in H2 2016, with a 17% fall in comparison to H1 2016.