September proved to be a bumper month for Indian startups that collectively mopped up at least $1.9 billion through 93 venture capital and private equity transactions despite the ongoing COVID-19 crisis, according to proprietary data compiled by DealStreetAsia.
The deal value translates to a 200 per cent jump over August when startups had collectively garnered $646 million funding across 84 venture capital and private equity transactions. The deal tally also marked the highest capital raised by Indian startups in a month this year.
The year began on a good note, and the total funding raised in January stood at about $1.45 billion and about $1.5 billion in February. The fundraising began a downward trend post-March when India went into a nationwide lockdown to prevent the spread of COVID-19.
Of the total transactions in September, the value of as many as 16 deals was undisclosed, the data showed.
While investment sentiments overall seem to be improving, mega-deals helped push up the scorecard in September. In the month’s biggest deal, edtech unicorn Byju’s raised $500 million led by US-based private equity firm Silver Lake, with participation from Tiger Global, General Atlantic and Owl Ventures. The round valued the Bengaluru-based online education company at $10.8 billion.
Others to have raised mega-rounds in September include edtech startup Unacademy, esports company Dream11, and foodtech platform Zomato. Byju,s and these three startups together raised $977 million or about 51 per cent of the total funding amount.
Edtech is flavour of the season
Startups in the education and training segments accounted for most of the funding with about $667.41 million in their kitty through 11 deals. Investors are on a constant hunt for startups that are expected to benefit from the pandemic-driven online learning boom.
Apart from Byju’s and Unacademy, other edtech startups to have raised funding during the month include Newton School, OckyPocky, SOAL, QShala, Classplus, and Sunstone Eduversity.
The travel & leisure industry, led by the Dream11 financing deal, garnered $333 million through five deals. Dream Sports, the owner of fantasy sports platform Dream11, had raised $225 million led by New York investment firm Tiger Global Management, TPG Tech Adjacencies (TTAD), homegrown private equity firm ChrysCapital, and Footpath Ventures.
COVID-19 has proved to be a boon for online gaming startups that garnered more and more user interest due to prolonged lockdowns in the country. Over the last six months, the gaming industry in the country has seen a 25-30% increase in hiring, according to a recent study by TeamLease, a staffing company.
Moreover, the ban on China’s Tencent-backed PUBG Mobile in the country has also opened an array of opportunities for esports companies that are experimenting with other genres in gaming.
Meanwhile, Internet startups raised $228.4 million through six transactions and startups within the food industry mopped up $164 million through three deals. Food ordering platforms including Zomato and Swiggy had seen a huge slump in business since the first country-wide lockdown. In a recent blog post, however, Zomato claimed that the overall sector was clocking 85 per cent of pre-COVID gross merchandise value (GMV) in September as the average value per order has increased.
Financial services were also among the most-funded sectors that raised $102.55 million across nine deals.
In terms of volume, early-stage funding continued to dominate the deal tally as investors backed business ideas that are impactful and relevant to the new normal.
The majority of venture deals during the month were in the pre-Series A and Series A stages, with these startups raising about $77.82 million across 25 transactions. The number of pre-seed and seed-stage deals in September stood at about 14 with deal value at about $7.88 million. This is lower compared to August when startups raised nearly $26 million across 21 pre-seed and seed transactions.
In terms of value, growth-stage startups led September’s fundraising. Companies in the Series B or post-Series B rounds collected an aggregate of $551.6 million through 16 investments. There were about six debt funding deals that raised a total of $76.82 million. The largest private equity round of $500 million was raised by Byju’s.
Most active investors
Sequoia Capital India had topped the investors’ list in September, too, with at least eight investments including Apna.co, Unacademy, Hippo Video, Airmeet, EkAnek, Groww, Mobile Premier League, and small case.
In July, Sequoia India also raised a total of $1.35 billion for two new funds that will invest across India and Southeast Asia.
Blume Ventures, which announced the close of its third fund at $102 million earlier this year, made at least five investments in September, including Unacademy, Servify, Classplus, SquadStack, and smallcase. The homegrown venture capital firm had also closed its opportunity fund at $41 million in February.
Other investors including Lightspeed and Alpha Wave Incubation made at least four investments each while Prime Venture Partners, Tiger Global Management, and Nexus Venture Partners invested in at least three startups each.
The 50-million-plus club
About four startups made it to the $100-million plus club while at least 10 startups raised upwards of $50-million. These startups included Byju’s, Dream11, Zomato, Unacademy, Livspace, Mobile Premier League, Flipkart, Acko General Insurance, Observe,ai, Gaana.