The second wave of Covid-19 pandemic would have dampened India as a whole, but the startup ecosystem led by ICT have succeeded in raising a whopping $10.46 billion during the first half of 2021, registering a growth of 150% compared with the same period last year.
According to Tracxn data, startup funding in India during the first half of 2020 was only $4 billion and it was only $5.4 billion during the first half of 2019. The statistics state that the average size of a seed round in India was $1.1 million during the first half of 2021, up from $80,000 during the same period last year.
According to statistics, even early-stage startups are at the centre of attraction as virtually everyone is attempting to get in on a deal. Some second-time founders now have the confidence and networking to bypass Sequoia Capital India’s Surge accelerator program and Y Combinator and still gain access to some of the perks they offer.
It is interesting to note that investors who led these fundraising say that many startups are taking cheks from tiger Globl / Falcon and Softbank too early in their journey.
TechCrunch reports that these founders have raised capital at such a high valuation that if they are not able to hit the metrics they have told their existing lead investors, very few in the industry would be in a position to engage with them at a later stage.
“And even the likes of Tiger will not back you then,” one investor said, pointing to examples such as Bangalore-based Upstox, which raised from Tiger Global in the past, but later Tiger invested in its chief rival Groww. “Tiger is backing the race, not the horse,” another investor said.
Bengaluru has become epicentre of investment activities as the ecosystem is fluid with a talent pool and the existing startup culture backed by captive engineering and R&D centres led by global tech giants. Besides Ola Electric which already started negotiations to raise at a valuation of over $3 billion, Bengaluru-based edtech Brightchamps is in early-stage to raise fund at over $500 million valuations.
The pioneers of Indian digital transformation inf fintech space Paytm have done a discussion with Fidelity and Goldman Sachs before its IPO game plan. This is in addition to Paytm’s global forays with a systematic game plan backed by its tech capability.
ShareChat is about to raise $150 million to $200 million from Temasek and others at a pre-money valuation of $2.8 billion. Prosus Ventures is in the advanced stages of talks to lead an investment in Upstox. Sequoia is in talks to invest in Gitcoin and back Dive again, while Infra. Market, which was valued at $200 million in December last year and $1 billion earlier this year, is in talks to raise at over $2 billion valuations.
It is interesting to note that many other startups that turned unicorns this year are also in the market to finalize new rounds. BharatPe, Open, and Yap are in advanced stages of talks to finalise new rounds, TechCrunch has reported in recent weeks. There are at least seven more $50 million+ rounds, and more than a dozen $20 million+ rounds that are expected to close within weeks.
Indian startup founders are in the race to form crypto startups for customers across the world, but high-profile investors in India have largely stayed away from this category, in part, because of India’s confusing stand about virtual currencies. Their absence has resulted in many of these startups secure funds from international funds and angels. Several venture funds including Sequoia Capital India, Lightspeed, Accel, WEH, and Kalaari are currently building their capabilities for investments in crypto startups.