At $ 9.7 billion, PE-VC fundraising by Indian startups peaks six quarters in second quarter
Fundraising by startups in India peaked at six quarters in the second quarter of 2021.
At least $ 9.7 billion was invested in 339 private equity and venture capital deals in the three months, according to data from DealStreetAsia DATA ADVANTAGE latest India Deal Review report: Q2 2021.
The value of the investment marks a 106% increase from the first quarter, mainly due to mega-deals, defined as fundraising worth more than $ 100 million each. There were 26 mega-operations in the quarter that raised a total of $ 6.8 billion, or 71% of the quarter’s total fundraising. By comparison, there were only 13 mega deals in the first quarter of the year.
The number of transactions in the second quarter increased by a modest 32% compared to the first quarter.
Fundraising in India in Q2 2021
The second quarter fundraising performance confirms the resilience and agility of Indian startups and improved investor confidence as the country returns to recovery from the COVID-19 disruption in India. last year.
Broken down by industry, financial services startups attracted the highest funding – $ 1.6 billion in the second quarter of 2021, up from $ 797.6 million in the first quarter, as they stepped up their digital focus. Startups particularly strong in enterprise software and advanced technologies have also started to attract more funds. Eightfold AI, Outreach, BrowserStack, Druva, Vianai Systems, and Chargebee were among the software startups that raised more than $ 100 million.
E-commerce was the most funded vertical sector in the second quarter, raising $ 2 billion, up from about $ 1 billion in the first quarter. The growth has been aided by a handful of tech-based logistics players who have ensured timely deliveries during the pandemic. Fintech startups took second place raising $ 1.5 billion in funding as the pandemic spurred the adoption of digital tools.
Growth stage funding – defined as Series B and later stage investments – totaled $ 6.6 billion across 58 deals in the second quarter and accounted for about 69% of the total deal value. This is more than triple the value of $ 1.97 billion in the first quarter. Meanwhile, pre-Series A and Series A transactions doubled to $ 537 million in the second quarter.
For the entire first half of 2021, there was a 164% year-over-year increase in the value of investments ($ 14.3 billion) made by startups. Fundraising in Q2 represented just over two-thirds of the total amount raised in H1 2021.
The number of transactions in the first half of 2021 saw an increase of 41% year-over-year.
“We expect this fundraising momentum to continue. Thanks to all the unicorn stories and great outings, there is a resurgence of interest in venture capital as an asset class. This would suggest that early stage transactions, in particular, will see a slight increase, ”said Venkat Vallabhaneni, partner at Inflexor Ventures, who was interviewed for the report.
The India Deal Review: Q2 2021 report covers fundraising by startups in the region in the second quarter, with detailed data on:
- Best deals of the second quarter of 2021
- Top sectors in terms of fundraising
- Most active investors of the quarter
- Perspectives from leading investors
The report is available exclusively to DealStreetAsia – Research & Analytics subscribers. Subscribe / upgrade your subscription now to access all of our reports. Still not sure? Go for a one-month trial for just $ 299.