India’s PE and VC ecosystems raise investments worth US$ 17.2bn in Jan-July 2021

The Jan-July 2021 period has seen investments grow across F-series, A and B series and late-series investments

August 22, 2021

F-series investments increased to 1.8mn from 1.2mn in 2019, and 110 deals were made in the A and B series.

Consumption patterns during COVID-19 have led to a shift in investment patterns towards edtech, gaming SaaS, and NBU.

Softbank, Temasek, Prosus Ventures, Sequoia Capital, and Tiger Global were the VC firms that led startup funding.

Udaan, PharmEasy, Meesho, Entropik Tech, Byju’s and Dunzo among others raised a significant amount of the funding.

Indian venture capital (VC) firms have raised an investment of US$ 17.2bn in the January-July 2021 period, according to reports by The Indian Private Equity and Venture Capital Association (IVCA) and Venture Intelligence (VI). This is significantly higher than the investments made by VCs in the last couple of years with US$ 11.1bn worth of investments being made in 2020 and US$ 13bn in 2019. 

Seed funding is also seen to have increased from 1.2mn in 2019 to 1.8mn in 2021, with 110 deals being made in Series A and B funding. Some of the leading VC firms in the 2019-21 period include Softbank Corp, Sequoia Capital, Tiger Global, Prosus Ventures, and Temasek. Investors who raised the maximum amount of capital during the period include Mirae Asset Global Investments (US$ 91mn) and Matrix Partners (US$ 110 mn). 

According to the reports, growth stage deals increased exponentially in 2021 at US$ 7.5 mn from US$ 4.9mn in 2020. Furthermore, the migration to digital payments and e-services has bolstered investor sentiment in the ecosystem as evidenced by startups like HealthifyMe, Dunzo, Meesho, Byju’s, Udaan, PharmEasy and Entropik Tech taking a lion’s share of the funding raised. 

While fintech, e-commerce, entertainment and logistics sectors were the priority sectors for venture capital investment earlier, in the covid period a bulk of the investments have shifted towards Software as a Service (SaaS), gaming, edtech, and Next Billion Users (NBU) sectors among others. Yet another paradigm shift has been with startups now having greater incentive to expand into diverse Indian markets as opposed to looking overseas for expansion. Experts anticipate the growth of 100 new unicorns by 2025 given the rate at which the sector is growing. 2020 saw the raising of more than US$ 100 mn worth of funding through 25 rounds. The creation of entities such as the National Startup Advisory Council and the GIFT City, complemented by future-forward policies like Aatmanirbhar Bharat are expected to facilitate significant growth in the Indian startup ecosystem. 

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