4 days, 6 unicorns, $1.55 billion — A week like none other for Indian startups


Mumbai: Half a dozen Indian startups raised $1.55 billion (Rs 11,580 crore) to enter the unicorn club between April 5 and April 9, in what has been a record-setting week of funding in the domestic new age Internet ecosystem.

Just 12 unicorns — privately held startups valued at $1 billion or more — were born in all of 2020, but that itself was the highest ever for a year in India. 2021 has already seen the birth of 10 startup unicorns in India.

The six deals announced last week spanned sectors, including healthcare (
Pharmeasy), social commerce (
Meesho), fintech (
Groww and
Cred), and social and content platforms (
Gupshup and
ShareChat parent Mohalla Tech).

New York-based Tiger Global emerged as the most aggressive investor, reminiscent of the then former partner
Lee Fixel’s 2015 run, with investments in four of the six new unicorns. It led the $502 million round in ShareChat and the $83 million round in Groww. The fund was the sole investor in the $100 million round of Gupshup, which raised money after 10 years.

Startup Unicorns in India 2021ETtech

(Graphic: Rahul Awasthi/ETtech)

“Tiger is the new SoftBank,” said Anand Lunia, founding partner at India Quotient, an early-stage investor whose portfolio includes Lendingkart, Sugar Cosmetics and ShareChat.
SoftBank’s Vision Fund 2 invested $300 million in social platform Meesho, which faced its share of rejection in its initial years of fundraising because of its model of e-commerce focussed on small businesses in India, Meesho founder Vidit Aatrey said.

“To the team, it’s a sign of validation and a sign of a larger responsibility being put on our shoulders, and a belief that we can pull off our ambitious vision of bringing 100 million small businesses online. It is all exciting and inspiring for everyone and we are enjoying that,” said Aatrey, who is also the chief executive officer of the company.

READ  Traditional PC shipments to India highest in 6 years: IDC

The week’s deal activity and unicorn bonanza was a culmination of hard work and process over several months, said Vinod Murali, managing partner at Alteria Capital Advisors.

“We should continue to see similar momentum for the next few quarters, but hope founders are able to use the abundant supply of capital well and build fundamentally strong businesses,” Murali said.

Overall, Indian startups raised $2.6 billion across 21 deals from April 3-9, according to data provided by industry tracker Venture Intelligence.

“In a world of zero-cost money, investors have reset the models for valuing the terminal value of businesses. SaaS (software-as-a-service) businesses with very sticky and growing revenues and consumer companies with the winner-take-all characteristics, both seem to be much more valuable now,” Lunia said. “Indian startups have performed admirably in the pandemic. In a lot of spaces, winners are emerging even more clearly now. It is these companies that are becoming unicorns faster.”

Another New York-based fund, Falcon Edge, emerged as a key investor this week.
It led the $800 million round, along with Amansa Capital, in food delivery startup Swiggy at a valuation of $5 billion, increasing the startup’s war chest against the
IPO-bound rival Zomato. Falcon Edge also led the $215 million round in fintech startup Cred at a valuation of $2.2 billion.

Other large deals closed by startups included the $65 million round led by General Catalyst (early backers of Snap, Airbnb, and Stripe) in car reseller platform
Spinny and OFB Tech’s business-to-business platform
OfBusiness’ Series D2 round of $110 million, led by Falcon Edge at a valuation of $800 million.

READ  Facebook to let users turn off political adverts

India has seen
record-breaking deal activity across stages since January. The average deal size has gone up substantially, with funding rounds closing in record time and startups raising more capital than planned.

Year to date, Series A rounds have notched up an average $6.29 million in 63 deals, the highest in the last five years, according to data tracked till April 8 by Tracxn.

According to a joint report by IT industry lobby group Nasscom and technology consultancy Zinnov, India is on track to have more than 50 startup unicorns in 2021.

On his future plans, Ankush Sachdeva, chief executive officer of ShareChat and Moj, wrote in a blog post: “We are at a significant inflection point in our company’s journey — as the Internet penetration deepens in India, we are well-positioned to expand our ecosystem of products to over 1 billion monthly active users cumulatively.”



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here