Decade Ends With A Bang For Indian Startups: How They Raised Record Funding Of Over 1 Lakh Crore In 2019

2019 turned out to be the best year of the decade for Indian Startups as they raised a record $14.5 billion in 2019, which roughly translates to Rs 1.02 lakh crore. This is roughly a growth of over 37.73 per cent over last year’s figure of around 75,000 crore, Tech Crunch has reported.

Breaking Down The Numbers

This windfall for Indian startups was a result of 1,185 rounds of funding from 817 investors, out of which over 459 pertained to Series A and later funding stages.

A total of 81 financing deals were part of the Rs 170 to 710 crore bracket ($25 million to $100 million). A total of 56 such deals took place in 2018. A total of 27 funding rounds exceeded the 710 crore mark ($100 million), up from 17 in 2018.

Even early-stage startups which have historically struggled for funding, saw a 22 per cent year on year rise in funding. Their valuation too increased by 15 per cent.

Besides, old fashioned VC funding, four IPOs were launched this year and 128 acquisitions were carried out.

Astronomical Growth This Decade

The decade began with Indian startups raising a partly Rs 3,900 crore (in today’s currency exchange rate), which has grown to the Rs 1.02 lakh crore figure in just 10 years. This roughly results in investments growing almost 25 times this decade.

Who Showered The Cash

Sequoia Capital was the most active venture capital fund in the Indian startup scene this year as it participated in over 50 investments. Accel took the second spot with over 40 investments and Tiger Global Management, Blume Ventures and Chiratae Ventures took the rest of the positions in top 5.

Private equity fund Steadview Capital topped the charts for private equity funds. It invested in companies like Ola, Unacademy and BharatPe.

Banks like Goldman Sachs too were active on the scene, with the latter investing in eight startups including fintech startup ZestMoney.

Social Media giants too pumped in the cash. Facebook made an investment in social-commerce firm Meesho. This was the company’s first ever investment in an Indian startup. Twitter too joined the club by pouring in $100 million in regional language social networking app ShareChat.

Mayoshi Son led SoftBank created a big splash in the market by funding companies like Oyo Rooms and Paytm, which raised Rs 10,650 crore and Rs 7,100 this year respectively.

Sectors Which Benefited The Most

Hotel aggregators part of the hospitality industry led the line for generating the highest amount of funding. Firms including Oyo Rooms, Treebo Hotels and Fab Hotels raised a total of almost Rs 12,000 crore in funding.

Fifteen companies part of the e-commerce logistic sector including Ecom Express, Elastic Run raised over Rs 4,500 crore. Fifty-eight companies part of the horizontal B2B marketplace raised over Rs 4,100 crore, 42 online insurance aggregators like Policybazaar and Coverfox raised almost Rs 2,500 crore. Ride hailing apps continued their funding streak by raising around Rs 3,400 crore.

Bengaluru Still The Crown Jewel, Despite Competition

Despite coming second in the number of startups being founded in the last three years, Bengaluru managed to corner almost half of all the total equity funding. The India startup scene has mainly been dominated by three regions - Delhi-NCR, Bengaluru and Mumbai.

We had recently reported that Bengaluru startups have raised a whopping Rs 2.2 lakh crore in the last 10 years which is 45 per cent of the funding raised by all Indian startups.

Compared to Mumbai and Delhi NCR, Bengaluru has seen more capital inflows than the two cities combined since 2016. The figure stands at 1.42 lakh crore. The majority of (55 per cent) series D+ investments too have been made in Bengaluru.

When it comes to unicorns (startups valued at over $1 billion), 14 of them have been founded in Bengaluru, with a total valuation of Rs 4.3 lakh crore. Delhi and Mumbai, on the other hand, have birthed nine and five unicorns respectively.

The article has rounded off the USD to INR conversion rate to $1=Rs 71