Those who have witnessed the 2015- H1 2017 era of Indian startup ecosystem, understand the way Indian tech startups have led their way into the mainstream startup funding cycle. While 2015 was all about big investments, the Indian tech startup funding scene saw a major decline in 2016. The investments were being made with the philosophy of spray and pray. It was more about making a lot of investments, mostly smaller in size, across many startups and hoping some of the bets placed yield a substantial result. But it seems the credo has been reversed in 2017.
For the investing community in India, 2017 is clearly the time when they are looking at returns from their investments. Compared to 2015 and 2016, the first six months of 2017 witnessed a lesser number of deals in the Indian tech startup ecosystem, but what is significant is that the amount invested in this period was much higher.
As per Inc42 Datalabs, the funding deals in the startups have increased by an overall average of 18% in the first three quarters of 2017 (from January to September). So far this year, Indian tech startup ecosystem was able to close more than 700 deals (until September 2017) across different segments with a record high investment of $9.4 Bn, a growth of almost 1.35X when compared to total investment in 2016 (January-December).
Although the overall numbers are quite impressive, there have been some crests and fall in the Indian tech startup ecosystem. As we prepare to relinquish the closing days of 2017, Inc42 looks back at the last quarter of 2017 (Q3 for FY17-18), with contemplation to understand what might lie ahead for the Indian tech startups community in this fourth quarter and subsequently 2018.
While ecommerce continues to be the investment-heavy arm of the Indian tech startups economy, fintech and healthtech are the two emerging sectors to look out for the year 2017 and the time to come. Bengaluru continues to be the hot spot despite continuous competition from Delhi/NCR. Big mergers and acquisitions have been observed throughout the year of 2017; the highlight of this quarter would be BYJU’S, BookMyShow and Freshworks acquiring two startups each.
Indian Tech Startup Funding Q3 2017: An Overview
Upon analysis of the data collected by Inc42 Datalabs, we observed the following trend in tech startup funding: