This article is an extract from Inc42's\u00a0\u2018Annual Indian Tech Startup Funding Report 2018\u2019 which provides a detailed analysis of the funding trends and Mergers & Acquisitions (M&As) in the Indian startup ecosystem for the period 2014-2018. To read other articles of this report, click here.\r\n\r\n\r\n\r\nWe\u2019ve just stepped into a new year and are all excited about what it will bring for the Indian startup ecosystem. But let's admit it, 2018 was a truly remarkable year in more ways than one for the ecosystem \u2014 from meteoric startup growth, high-profile exits, foreign investments to international forays by Indian tech startups.\r\n\r\nAccording to Inc42\u2019s upcoming \u2018Indian Tech Startup Funding Report 2018\u2019, Indian tech startups raised $11 Bn in funding across 743 deals with more than 637 Indian startups raising funding in 2018. This was slightly lower than the previous year (2017) when $13 Bn funding was raised across 885 deals.\r\n\r\nStartups raked in about 42% of the total funding between 2014-2017 in 2017. In comparison, 25% of the total funding in startups between 2014 and 2018 was made in 2018, the report added.\r\n\r\n\r\n\r\n\r\n\r\nDespite the fall in funding amount, 2018 was a year of transformation, excitement, and revolution for the Indian startup ecosystem. In just this one year, India produced 11 unicorns and also saw its fastest unicorn \u2014 Udaan \u2014 which crossed the $1 Bn mark in just 26 months with a whopping $275 Mn funding.\r\n\r\nTagged as \u2018fallen sectors\u2019, both grocery and foodtech were on fire in 2018. While Zomato and Swiggy gaining the unicorn status was a highlight for the foodtech industry, the grocery sector had its moment of glory in the growth achieved by Grofers and BigBasket.\r\n\r\nThe country even saw the biggest exit in the history of Indian ecommerce \u2014 the $16 Bn acquisition of Indian ecommerce unicorn Flipkart by Walmart. Overall, 125 merger and acquisitions (M&A) deals were reported in the Indian tech startup ecosystem, as per the report.\r\n\r\nBefore we delve further, let\u2019s take a quick look at the key highlights from the Tech Startup Funding Report 2018:\r\n\r\n \t\r\n\r\n \tTotal funding amount in India\u2019s Silicon Valley, Bengaluru, fell by 31% from $6.86 Bn in 2017 to $4.75 Bn in 2018\r\n \tLate-stage funding increased by 18% in comparison to 2017\r\n \tThere was a 40% drop in seed stage funding in comparison to 2017\r\n \tEnterprisetech and fintech witnessed the maximum number of M&As with 30 and 18 deals respectively\r\n\r\n\r\n\r\n\r\n \tEcommerce investments fell by 41.37% in 2018\r\n \tInvestments in healthtech and in deeptech surged by 45.06% and 20.68% respectively\r\n\r\n\r\nIndian Tech Startups Funding 2018: Stagewise Breakdown\r\nIn 2018 as well, gaps in seed funding continued to persist like the previous year, but there was an encouraging growth in late-stage funding. While the number of late-stage deals rose by 18%, there was a drop of 21% in the total funding amount. The top funding grossers of the Indian startup ecosystem were OYO, BYJU\u2019S, Paytm Mall, and PineLabs, among others.\r\n\r\n\r\n\r\n\r\n\r\nIndian Tech Startups Funding 2018: Sector-wise Breakdown\r\nFintech was the top sector in terms of the number of deals, raking in $1.41 Bn across 121 deals. But, a slight decline was observed in funding amount in comparison with 2017. At the same time, continuing with the previous year\u2019s trend, ecommerce witnessed the highest funding \u2014 $2.1 Bn \u2014 in 2018. However, the amount was approximately 50% lower than in 2017.\r\n\r\n\r\n\r\n\r\n\r\nIndian Tech Startups Funding 2018: Demographic Breakdown\r\nBengaluru scored 247 deals in 2018. It was followed by Delhi-NCR, which notched a total of 224 deals. Other major cities such as Mumbai, Chennai, Hyderabad, and Pune also showed signs of growth.\r\n\r\n\r\n\r\n\r\n\r\nAccording to Inc42 DataLabs, since 2014, Indian tech startups have raised over $44 Bn across 3,968 deals. While 2015 was the year of blind fundings and \u2018me too\u2019 startups, 2016 saw the funding winter of the Indian startup ecosystem, making entrepreneurs walk on thin ice. The next year, 2017, came as a ray of hope and as the market moved through a phase of correction; the year bid adieu with the maximum funding hitherto in the ecosystem.\r\n\r\n\u2018The Indian Tech Startup Funding Report 2018\u2019 showcases a downward trend in 2018 in terms of funding and M&As. However, in terms of overall sentiment, Indian startups fared well.\r\n\r\nIn 2019, a plethora of opportunities are awaiting Indian startups in international markets as well, considering the strengthened relations between the Indian government and the other countries such as Israel, Portugal, Japan, and the UK, among others.\r\n\r\nRecently, reports also surfaced that in the last year, around 200 Indian startups have set up their base in Estonia. Well, that\u2019s a good start.\r\n\r\nInc42 DataLabs further predicted that in 2019, funding is expected to again soar to 2017 levels, hovering at about $13.5 Bn but through a comparatively lesser number of deals. DataLabs further suggests that the funding gap observed in 2017 and 2018 will continue in 2019, where a handful of startups will attract a major part of the funding.\r\n\r\nLiked what you read so far? We have a lot more insights and data in our full report, which covers funding trends across Tier I, Tier II, Tier III cities, 14 industries and sectors, segregated by the funding stage, investor type, and a lot more, for the period between 2014 and 2018.