Fundraising by startups in India scaled a six-quarter peak in Q2 2021.
At least $9.7 billion was invested across 339 private equity and venture capital transactions in the three months, showed data from DealStreetAsia DATA VANTAGE’s latest report India Deal Review: Q2 2021.
The investment value marks an increase of 106% from Q1, mostly on account of mega deals, defined as fundraisings worth more than $100 million each. There were 26 mega deals in the quarter that raised a cumulative $6.8 billion, or 71% of the total fundraising in the quarter. In comparison, there were only 13 mega deals in the first quarter of the year.
Deal count in the second quarter rose by a modest 32% from Q1.
Fundraising in India in Q2 2021
The Q2 fundraising performance affirms the resilience and agility of Indian startups and an improvement in investor confidence as the country returns to the path of recovery following the COVID-19 disruptions of last year.
Broken down by industry, financial services startups attracted the highest funding — $1.6 billion in Q2 2021, compared with $797.6 million in Q1 as they enhanced their digital focus. Startups that are especially strong in enterprise software and deep tech have also started drawing more funds. Eightfold AI, Outreach, BrowserStack, Druva, Vianai Systems, and Chargebee were among the software startups that raised $100-million plus rounds.
E-commerce was the most funded vertical in Q2, raising $2 billion, compared with about $1 billion in Q1. The growth was aided by a clutch of technology-enabled logistics players that ensured timely deliveries during the pandemic. Fintech startups occupied the second spot by raising $1.5 billion funding as the pandemic spurred the adoption of digital tools.
Growth-stage funding — defined as investments in Series B stage and later — totaled $6.6 billion across 58 deals in Q2 and accounted for about 69% of the total deal value. This is more than a three-fold increase in value from $1.97 billion in Q1. Meanwhile, pre-Series A and Series A deals doubled to $537 million in the second quarter.
For the entire first half of 2021, there was a 164% year-on-year increase in the value of investments ($14.3 billion) garnered by startups. Fundraising in Q2 accounted for slightly over two-thirds of the total amount raised in H1 2021.
Deal count in H1 2021 clocked a 41% year-on-year increase.
“We expect this fundraising momentum to continue. Thanks to all the stories of unicorns and good exits, there is renewed interest in venture capital as an asset class. This would suggest that early-stage deals, in particular, will see an uptick,” 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 extensive data on:
- Top deals of Q2 2021
- Top sectors in terms of fundraising
- Most active investors in the quarter
- Insights from prominent investors
The report is available exclusively to DealStreetAsia – Research & Analytics subscribers. Subscribe/upgrade your subscription now to access our entire set of reports. Still not sure? Opt for a one-month trial for only $299.