India’s edtech, gaming cos lead funding revival, startups raise $2b in Sept quarter

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New-age startups in sectors such as edtech and gaming propelled funding in the July-September quarter to touch $2 billion, even as investments this year so far remain tepid compared to 2019.

Indian startups raised $6.5 billion across 438 deals in the first nine months of 2020 compared to $7.9 billion across 594 deals for the corresponding period last year, according to data from Venture Intelligence.

While funding activity was impacted by the pandemic in the April-June period, July-September showed quick improvement with startups raising $2 billion across 137 deals, compared to $1.4 billion across 134 deals in the preceding June quarter.

Over the past few weeks, startup unicorns have been able to raise millions of dollars in funding from investors from US, Europe and Singapore, as they chart a new phase of growth in a covid-world. Even as Chinese investors stayed away, startups such as Zomato raised $165 million from Tiger Global Management and Temasek and said it plans to go public in 2021, and e-grocer BigBasket is raising around $300-350 million.

“Increased levels of digitization and an uptick in the adoption of technology across consumer and business segments have created previously unexplored areas or have provided a catalyst to the growth of existing solutions. Some of the larger capital rounds in late-stage have been in sectors which were growing well pre-covid but have seen a massive uplift in their addressable markets in the current situation,” said Karan Mohla, partner and head, consumer technology, Chiratae Ventures.

Funding remained strong in the edtech space, led by Byju’s, that entered the ‘decacorn’ club surpassing $10 billion valuation, and is now looking to expand in overseas markets.

Bengaluru-based Byju’s, with a current valuation of $11.1 billion, has raised over $1 billion since January, reflecting the surge in investor interest in edtech startups as remote learning replaced classrooms.

Unacademy raised $150 million, led by SoftBank Vision Fund 2i , trebling its valuation to $1.45 billion and catapulting it into the coveted unicorn club of start-ups. Currently, Unacademy is the second most valued edtech startup after Byju’s. Eruditus ($113 millionn) and Vedantu ($100 million) were the other edtech startups that raised money in Q3.

In September, Dream Sports, India’s most valuable sports technology company, also raised $225 million led by Tiger Global Management, TPG Tech Adjacencies and ChrysCapital, as investors bet on the country’s nascent but fast-growing sports technology company, taking its valuation to over $2.5 billion from $1.1 billion in April last year.

Among domestic investors, Sequoia Capital India, Accel and Matrix Partners were the most active this year, and backed startups like Unacademy, Curefit and Bijnis.

Since 2006, Sequoia has invested in eight Indian unicorns including Druva, Freshworks, Byju’s and Unacademy. In July, Sequoia announced two new India and South-East Asia (SEA) focused funds—a $525-million venture fund and a $825-million growth fund to double down on investments in both early- and growth-stage firms in the technology, consumer and healthcare space.

The increase in seed and early-stage funding can be attributed to companies starting up in new segments that have emerged in the past few months in the post-covid world, Chiratae’s Mohla said .

Ankur Pahwa, e-commerce and consumer Internet leader, EY investments picked up July onwards and investors are taking sector-specific bets.

“They are picking sectors which have shown strong resilience such as gaming, edtech, social media, agritech and anything that is digitization,” Pahwa added.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.