Such companies currently account for one-fifth of e-commerce deals globally, and that level might rise to a new record this year going by the current run-rate data from CB Insights.
That makes India a bright spot in contrast with the Chinese and US markets, where the pace for deals has declined this year, both in respect to number of deals and dollar funding. In fact, global e-commerce deal activity is headed for a decline in 2016, and dollar funding is on pace for its worst year since 2012.
As the chart below illustrates, in 2015 both China and India saw increased deal counts and narrowed the gap with the US, which dropped from peak levels seen in 2014.
Indian deals soared 124 per cent, to a new high of 148. This year, India’s e-ecommerce firms are on track to surpass that figure while e-commerce deal activity in the US has continued to be weak.
The share of US companies in global e-commerce deals has infact been on the decline since 2012, when they attracted more than half of worldwide deals. But that share dropped to 41 per cent in 2015, and is at 39 per cent this year.
The beneficiaries have been Indian companies which have got more funding. India’s startups attracted just 8 per cent of deals in 2012, and 16 per cent in 2015. The trend has continued in 2016 — India’s share of deal activity has been 21 per cent year-to-date. Meanwhile China’s deal share peaked last year at 8 per cent.
In terms of funding though, India is still lagging behind China, which is in top spot, with 30 per cent of the global e-commerce dollar share, according to CB Insights data.
In comparison, the US companies’ biggest deal was a $500 million Series B raised by Jet.com, and a Series C of the same amount to Wish.
India took third place with a 17 per cent dollar share, as investors wanted to capture the opportunity of the world’s only large market still untapped. Flipkart and Snapdeal raised 12 major rounds since 2012, and other players also attracted significant funding. These players, many of which are smaller, have kept the momentum going in 2016.
China had more deals Series A and B deals in e-commerce companies. In India, 53 per cent of deals were at the seed and angel levels, compared with just 7 per cent in China. China also had the highest share of Series C,D, and E deals, which were very few in India.