Indian startups raised $4.68 billion across 257 deals in the first quarter of 2021 to touch a five-quarter high, according to DealStreetAsia’s latest report.
According to India Deal Review: Q1 2021, total deal value in Q1 rose 52% while deal count rose 6% as mega-deals took the lion’s share of the capital raised during the quarter.
With the country seemingly on the path to recovery from the first wave of COVID-19, the first quarter saw blockbuster deals being announced and new unicorns being christened at an unrivalled pace.
Edtech startup Byju’s raised the largest round in the quarter. Its $460 million Series F round, which was announced in March, was led by MC Global Edtech Investment Holdings and joined by B Capital, Tiga Investments, TCDS (India) LP, Arison Holdings, XN Exponent Holdings, Baron Emerging Markets Fund, and Baron Global Advantage Fund.
Riding high on the coronavirus-induced digitalisation wave, financial services startups led fundraising in Q1 by garnering $797.6 million across 45 deals. Education/training ($602 million), and travel and leisure ($541 million) companies rounded out the top three.
Growth-stage funding — defined as investments at Series B stage and beyond — totalled $1.97 billion across 36 deals in Q1 and accounted for 42% of total deal value.
Sequoia Capital India, along with its seed programme Surge, was the top investor with 12 deals in Q1. The firm closed its second seed fund at $195 million in March to back the next set of early-stage startups in India and Southeast Asia.
As India reels from a second, deadlier wave of COVID-19 and growth forecasts are revised downwards, the startup ecosystem is likely to see a drop in fundraising in the second quarter similar to that seen in 2020.
Investors that DealStreetAsia spoke to pointed out that most startups emerged out of the first wave of the pandemic stronger, leaner and more resilient.
“Most VC-backed startups are now battle-hardened and have put some of the lessons learned from last year into practice. If we don’t go into a more significant lockdown, we expect the financing activity to stay robust,” said Trifecta Capital managing partner Rahul Khanna.
The India Deal Review: Q1 2021 report captures:
- Top deals of Q1 2021
- Top sectors in terms of fundraising
- Most active investors in the quarter
- Insights from prominent investors
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