Indian tech-led startups attract US$2.5bn in Q1 2020: Report

Indian technology-led startups attracted funding worth US$2.5 billion during the first three months of 2020, a 14 per cent rise over the corresponding period last year, as per a report by research and consulting firm HexGn.

April 28, 2020

This rise is in sharp contrast to startup investments globally, which saw a steep drop of 15 per cent to US$60 billion during the quarter

The largest investments during the quarter were received by BYJU's, FirstCry, Zomato, Swiggy, CureFit, among other startups

Reliance’s Jio platforms saw an investment of US$5.7 billion from Facebook, followed by US$750 million from Silver Lake

Supportive policies by the Indian Government and increased availability of local capital are creating a thriving startup ecosystem

Indian technology-led startups attracted funding worth US$2.5 billion during the first three months of 2020, which is a 14 per cent rise over the corresponding period last year, as per a report by the Press Trust of India citing the findings of research and consulting firm HexGn. This rise is in sharp contrast to startup investments globally, which saw a steep drop of 15 per cent to US$60 billion during the quarter. The US and China have especially faced challenges, seeing dips of 10 per cent and 45 per cent, respectively, in startup funding. 

The largest startup investments in the first quarter this year have included a US$200 million funding round in BYJU’s, and over US$100 million each in FirstCry, Zomato, Swiggy, CureFit, Unacademy, and Bounce. Notably, Reliance’s Jio platforms saw an investment of US$5.7 billion from Facebook, in the largest FDI deal in the Indian technology and telecom sector, in April 2020. This was closely followed by a funding announcement to the tune of US$750 million by global tech investor Silver Lake in the same company.  

The HexGn report added that supportive policies by the Indian Government and increased availability of local capital are giving further impetus to the startup ecosystem. In August 2019, Union Finance Minister, Nirmala Sitharaman, had announced that the Angel Tax provision would be withdrawn for startups in India, as well as for investors into such ventures. The decision not only offered big relief for Indian startups but also spurred seed-stage investments. 

In November 2019, Nasscom had reported that the Indian technology startup industry has retained its position as the world’s third-largest. India built more than 1,300 new technology startups in 2019, taking the total count of technology startup additions to as many as 9,300 in the last six years, which now form a key part of the national economy. During the year, India also added seven new unicorns, or startups with valuations of more than US$1 billion, taking the total number of active unicorns in the nation to 24.