India Deal Review: Big-ticket deals boost startup funding by 72% YoY to $2.4b in March

India Gate. Photo: Abhidev Vaishnav/unsplash

Despite the unprecedented challenges thrown by the country’s second COVID-19 wave, Indian startups raked in at least $2.38 billion across 93 venture capital and private equity transactions in March this year. The fundraising was a sharp 72% jump from the same month last year, according to proprietary data compiled by DealStreetAsia.

Compared with February 2021, deal value in March — based on the 75 disclosed transactions— was up about 83%.

This also marked the highest funding raised by startups in a single month since the beginning of 2020. Last March, startups had raised at least $1.38 billion in venture capital funding across 76 transactions.

The steep jump can also be attributed to some of the big-ticket transactions that were closed during the month including that of edtech company Byju’s ($460m funding led by MC Global Edtech Investment), gaming platform Dream Sports ($400m led by TCV, and others), baby products retailer FirstCry ($315m from TPG, ChrysCapital and Premji Invest), finance services provider Five-Star Business Finance ($234m from Sequoia, KKR, others) and conversational artificial intelligence (AI) platform Uniphore ($140 million as a part of its Series D funding, led by US-based investment firm, Sorenson Capital Partners.)

These five startups accounted for about 65% of the total funding value in March.

Among the most funded industries in the month were education & training, financial services, travel & leisure, consumer products, and software. While early-stage deals have started to gain pace, growth-stage deals continue to grab the lion’s share of funding.

Education, fintech sectors ride on digitalisation wave

Indian edtech companies have been among the biggest beneficiaries of COVID-19 lockdowns as schools and universities continue to conduct classes virtually over the internet. And, this is likely to continue as there are no clear guidelines yet on the reopening of schools and colleges in the country.

Like last year, Byju’s has been making headlines this year too. Last month, the edtech leader mopped up about $460 million as part of its ongoing Series F round, led by MC Global Edtech Investment Holdings LP and participation from Facebook co-founder Eduardo Saverin’s B Capital, among other investors. The investment reportedly valued the Bengaluru-based company at a little over $13 billion.

Other edtech startups that secured funding in March include iNurture Education Solutions, Quizizz, Masai School, and Uable. Overall, the education industry raised about $494 million through nine transactions in March.

Financial services companies, led by fintech, are also catching pace. To maintain social distancing norms, financial services firms are switching to digital platforms for providing banking, payments and other services. These startups together mopped up about $433 million through 15 transactions.

Together, the top five sectors including education & training, financial services, travel & leisure, consumer products, and software raised about $2 billion, accounting for about 84% of the total deal value in March.

Pickup in seed-stage deals

Investors have started to pursue early-stage deals in the past three months. Pre-seed and seed-stage funding rose to $44.4 million in March from $29.4 million in February. The number of these deals, too, rose to 24 from 17 in February. Yet, they accounted for only 2% of the overall disclosed funding in March.

Spacetech startup Pixxel, rental space startup Livve Homes, and revenue-based financing (RBF) startup Velocity were among those that raised big seed rounds in March.

As many as 17 pre-Series A and Series A funding deals, worth $117.9 million were clocked in March, recording an increase of 34% over February in value. There were about three private equity deals worth $339 million and one secondary deal worth $400 million.

Companies between the Series B and Series F rounds collected an aggregate of about $1 billion through 16 investments.

Most active investors

Venture Catalysts, and its early-stage startup fund 9Unicorns, made a total of six investments in March including edtech startup ImaginXP, solar analytics startup Prescinto, healthtech startup Janani, footwear brand Monrow, and SaaS startup ExtraEdge.

9Unicorns, the maiden accelerator fund of startup incubation platform Venture Catalysts, is increasing its corpus target to Rs500 crore ($67 million) for its ongoing fundraising, exercising a green-shoe option. In a report last month, financial daily Mint said 9Unicorns is looking to raise the entire amount of Rs500 crore over the next few months from multiple corporations, family offices, and institutions globally.

Chiratae Ventures, formerly IDG Ventures India, Sequoia Capital India, and Inflection Point Ventures were the second most active investors with five investments each.

Meanwhile, venture capital firms Lightspeed Venture Partners, Mumbai Angels, and Titan Capital made at least four investments each.

The March numbers brought the total disclosed fundraising in Q1 2021 to $4.7 billion across 257 deals.  That compares with the $4.03 billion raised in the year-ago quarter (Q1 2020), from 228 deals, and $3.07 billion raised from 272 deals in Q4 2020.

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.