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How 2019 was the year of huge startup fundings?

The year 2019 saw a huge development and uprising of startups from a variety of sectors along with a huge amount of funding towards them.

As per a recent NASSCOM report, the Indian startups have seen a 108 percent growth in total funding from $2 billion USD to $4.2 billion USD. There was a 50% increase in the number of advanced tech startups since 2017. The report also said that the total number of startup funding deals, especially those in the late stages have witnessed massive growth. This was around 250 percent from USD 847 million in 2017 to USD 3 billion in 2018.

By 2025, number of unicorns are expected to grow to 100+ due to the shrinking time to unicorn factor.

The sectors, from Hotel Aggregators, e-commerce logistic, B2B marketplace, ride-hailing alone comprise 50% of start-ups with Bangalore, Delhi NCR and Mumbai which continue to remain primary start-up hubs.

The following are the sectors that have aggregated most investment in 2019 (Funding in

US$ mn)  :

Hotel Aggregators :                                          1,690

E-Commerce Logistics :                                      641

Horizontal B2B marketplace :                             586

Ride-Hailing :                                                      481

Online Comparison platform for Insurance :      340

The following are the total number of startups founded in the past 3 years :

 Rank     City               2017-19    Market Share (%)

1           Delhi NCR      2,562                 33

2           Bengaluru       1,587                 21

3           Mumbai          1,027                 13

4           Hyderabad        603                   8

5           Pune                 517                   7

6           Chennai            499                   6

7           Ahmedabad      295                   4

8           Kolkata             264                   3

9           Jaipur               246                   3

10         Indore               129                   2

(Jaipur and Indore are tier-2 cities)

The growth in total funding raised by startups has grown by 25 times From $550 mn in 2010 to $14.5bn in 2019.

The collective funding raised by startups in 2019 is US $14.5 bn through 1,185 number of rounds. These include 459 Series A and late-stage

investments, 4 IPOs, 128 Acquisitions and participation by 817 Active Investors.

The top funding rounds in 2019 are listed as follows:

  • $1.5 bn Series F round led by Sequoia Capital, Lightspeed Ventures and SoftBank in OYO.
  • $1.0 bn Series G round led by SoftBank, Ant Financials,Discovery Capital, Grab, Go-JEK in Paytm.
  • $585 mn Series D round led by Altimeter, Hillhouse, GGV, DST Global, Lightspeed, Tencent, Citi, Bessemer in Udaan.
  • $413 mn Series F round led by Fosun, Carlyle, SoftBank in Delhivery.
  • $150 mn Series D round led by Goldman Sachs, Accel B Capital, Sequoia Capital, IFC, Sands Capital in BlackBuck.
  • $100 mn Series D round led by Greater Pacific Capital in Near.
  • $100 mn Series C round led by Shunwei Capital, Morningside Ventures, Jesmond Holdings in ShareChat.
  • $47 mn Series F round led by LeapFrog in NeoGrowth.

In 2019, the overall funding secured by Indian startups was over $3.2 Bn across 193 deals. The share of funding amount for Tier 1 city’s startups was amazingly 99% for this period.

The top 7 startups which disrupted their respective sectors in 2019 are :

 Ola Electric

Cab aggregator Ola, that’s one of the world’s largest ride-hailing firms, announced its ‘Mission: Electric’. This had a commitment to place around 10,000 e-rickshaws in service. Ola Electric has made sustainable technologies cost-effective and viable in daily commuting. Ola Electric has raised $250 million from SoftBank. This valued the startup at $1 billion. Other investors in Ola Electric include Tiger Global, Ratan Tata, and several others. Ola Electric became one of the fastest unicorn after Udaan.

Paytm Money

Paytm Money has partnered with all 40 AMCs (Asset Management Companies). This makes Paytm Money the only investment platform that offers investments in direct plans of mutual funds from all AMCs in India.

Recently, Paytm Money has raised INR. 40 crore funding from its parent One97 Communications. This was in addition to its previous round where it raised INR.28.87 crore, and it had also received an investment commitment of $10 million from One97 Communications.

NinjaCart

It has been disrupting the traditional ways of buying  fruits and vegetables from farmers. Once they pick up, they deliver it to the nearby small retail outlets. Ninjacart has added $10 million in Series C round of funding from Tiger Global, Trifecta Capital, Tanglin Venture Fund, Steadview Capital, and ABG Capital.

Meesho

Meesho aims to create an environment where it allows anyone to start their business with zero investment. In 2020, Meesho aims to create around 20 million micro-entrepreneurs.

Meesho has seen a 50 times growth in 2 consecutive years which counts to around 1451 percent. The startup works on about 10-15% commission, where the sellers can earn with Meesho, by adding a profit margin on every sale.

CleverTap

A SaaS-based customer lifecycle management and mobile marketing company, CleverTap has generated more than $2 billion in incremental revenue to its customers, and at present has a reach of more than one billion devices and over 8,000 consumer apps in more than 100 countries.

The startup’s revenue has been growing at 250 percent year-over-year since 2015. Some of the most important clients of CleverTap include Vodafone, Star, Sony, Domino’s Pizza, Gojek, Cleartrip and BookMyShow.

OkCredit

The startup aims to disrupt the way small businesses do accounting. Through digitisation, the startup aims to reduce the merchant’s burden of maintaining and accounting paper account books. People can send collective notifications to customers when there are delayed or missed payments. Whenever a merchant registers a transaction on the platform against a customer, they get informed through a text or WhatsApp.

OkCredit became a part of YCombinator’s 2018 summer batch and had raised funds from the US-based seed accelerator during its $1.7 million pre-Series A round. LightSpeed Partners, Venture Highway, and Y Combinator participated in the round.

Yulu

The startup aims to provide an affordable and green mobility solution for urban India. They have a strong vision to decongest urban traffic by providing scalable, affordable, efficient and clean modes of transport for last mile connectivity and short distance commute.

Yulu has centers in Bengaluru, Pune, Delhi, Mumbai, and Bhubaneswar. In Bengaluru, Yulu has over 850 Yulu or parking zones. They require users to pay Rs.10 mandatorily for a Yulu Miracle ride, and additionally Rs. 10 per 10 minutes of riding time.

The top 10 of the most active VCs alone contributed to 32% of the total deal count in this funding scenario and most of these deals were in the fintech sector. These VCs are listed below by their descending number of deals closed in 2019 :

  • Sequoia Capital

Origin : California

Deals in 2019 : 13 (& 31 in 2018)

Investments in –  Vymo, Pocket Aces, Awfis.

Sector : Financial technology

  • Accel partners

Origin : California

Deals in 2019 : 10 (& 38 in 2018)

Investments in : Stanza Living, Drip Capital, Indifi

Sector : Financial technology and real estate technology

  • Tiger Global Management

Origin : New York

Deals in 2019 : 7 (& 8 in 2018)

Investments in : OkCredit, UrbanClap, INDWealth

Sector : fintech.

  • GrowX Venture Management

 Origin : Delhi-NCR

Deals in 2019 : 6 (& 5 in 2018)

Investments in : Doxper, Pixxel and Meddo

Sector : healthtech and deeptech.

  • SAIF Partners

 Origin : China and India

Deals in 2019 : 5 (& 14 in 2018)

Investments in : ShareChat, Coverfox and Rivigo

Sector : Fintech

  • Trifecta Capital

 Origin : India

Deals in 2019 : 4 (& 13 in 2018)

Investments in : Vedantu, Zoom Car and Quikr

Sector : edtech, mobility, ecommerce.

  • Steadview Capital

 Origin : London

Deals in 2019 : 4 (& 3 in 2018)

Investments in : Chargebee, BharatPe and Zenoti

Sector : fintech.

  • Omidyar Network

 Origin : California

Deals in 2019 : 4 (& 14 in 2018)

Investments in : Yelo, Whitehat Jr and Indifi

Sector : edtech and fintech.

  • Lightspeed Venture Capital

 Origin : California

Deals in 2019 : 4 (& 11 in 2018)

Investments in : Freight Tiger, Share Chat,MyScoot

Sector : enterprise-tech and consumer space. .

  • Chiratae Ventures

 Origin : Delhi

Deals in 2019 : 4 (& 2 in 2018)

Investments in : Emotix, PlayShifu and Blowhorn

Sector : robotics, edtech gaming, logistics.

Financial technology and B2B were the prominent industries which saw an upsurge both in terms of funding pumped in and new business models coming to the fore apart from health-tech,gaming and edutech being the other significant gainers.

With several startups from a wide range of sectors have got an ease with getting funded by one or many Venture Capital firms, the Indian startup scenario is now slowly reaching its true potential. The Indian startups have began expanding outside India and also competing with companies internationally with the funding received from the VCs.

Moving to the new decade however, solving real problems for the common man would be the new mainstream as the world of capital witnesses a seismic shift which further advocates for accountability to equity in society.

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