StartUp Sunday || Season 4 Episode 14 || Startups funding scenarios in 2019

Despite of economic falls Indian startups raised a record $2.5 billion in capital in the third quarter of calendar year 2019, the highest in any quarter this year, as a number of new investors have increased deal-making and exits have provided liquidity to investors.

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Startups raised $2.55 billion in the quarter ended 30 September, 25% more than the $2 billion and $2.13 billion raised in the preceding two quarters this year, according to data from Venture Intelligence, a startup data tracker.

The growth in fundraising indicates that venture investors continue to remain bullish on Indian startups despite concerns of a slowdown in the economy.

Despite of economic falls Indian startups  raised a record $2.5 billion in capital in the third quarter of calendar year 2019, the highest in any quarter this year, as a number of new investors have increased deal-making and exits have provided liquidity to investors.

Startups raised $2.55 billion in the quarter ended 30 September, 25% more than the $2 billion and $2.13 billion raised in the preceding two quarters this year, according to data from Venture Intelligence, a startup data tracker.

The growth in fundraising indicates that venture investors continue to remain bullish on Indian startups despite concerns of a slowdown in the economy.

“Investors are generally long on India. Despite slowdown concerns, venture capital investors are taking a seven year view and expect consumption-led growth in that period. There have also been significant exits and liquidity created for investors, which brings even more capital back in,” said Arpan Sheth, partner at consultancy firm Bain & Co.

The largest deals of the quarter include business-to-business marketplace Udaan, which raised $414 million from Altimeter Capital, Hill house Capital and DST Global; Ola Electric, the ride-hailing firm’s electric vehicle arm, which raised $250 million led by Softbank Group, and Rebel Foods, known for its Faasos rolls and Behrouz Biryani, which raised $130 million led by hedge fund Coatue Management.

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Top Performing Sectors in H1-2019

Ecommerce ($1.03 Bn), fintech ($1.01 Bn) and transport tech ($800 Mn) emerged as the top sectors in terms of the total funding amount. The share of the top three sectors in the total funding raised by Indian startups in H1 2019 was 48.83%. In terms of the total number of deals, fintech (57), enterprise tech (52) and consumer services (40) were the top sectors. These three made up 41.39% of all funding deals in the first half of the year.

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The top three sectors in terms of investment deal counts — fintech, enterprise tech and consumer services — made up 41.39% of the total number of deals in H1 2019, which makes it a total of 360 deals.

Among the fintech startups funded in H1 2019, investment deals in lending tech startups were the driving force behind fintech leading the deal count — 52.63% of the total 57 deals in fintech startups was contributed by investment in lending tech startups such as Aye Finance, ZestMoney, Kinara Capital and others.

In the case of enterprise tech, SaaS products dominated the scene — 48% of the total deals in enterprise tech startups were in SaaS products, out of which HR tech was one of the most prominent areas.

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