Indian startups raised a whopping $18.7 billion across 525 private equity and venture capital transactions in the third quarter of 2021, marking the highest capital raising in seven quarters, showed data from DealStreetAsia DATA VANTAGE‘s latest report India Deal Review: Q3 2021.
Total deal value in Q3 almost doubled from the previous quarter, while deal count was up 55%.
Mega-deals (those worth $100 million and above) alone accounted for 78% of the total deal value in Q3. At least 40 companies announced megadeals in the third quarter.
Fundraising in India in Q3 2021
Retail was the most funded industry in Q3, raising $5 billion across 29 deals, surpassing financial services, which had topped in Q2. Retail was pushed to the top on the back of a whopping $3.6-billion fundraising by Flipkart. The round was led by Singapore’s GIC, the Canada Pension Plan Investment Board, Japan’s SoftBank, and Walmart.
Startups within financial services occupied the second spot by mopping up $2.36 billion from 85 deals. The fintech industry has received a huge fillip since the onset of the COVID-19 pandemic last year that led companies to digitise at least some part of their businesses.
The Logistics & distribution industry, too, performed well on the back of increased e-commerce activity. Within logistics, Swiggy closed the largest round of $1.25 billion led by SoftBank Vision Fund 2 and Prosus.
E-commerce has emerged as one of the fastest-growing verticals amid the pandemic restriction. Startups within e-commerce collectively garnered at least $7 billion in Q3 from risk investors as against $2 billion in Q2.
Edtech was the second most funded vertical in Q3 at $1.9 billion. Eruditus became the fourth Indian edtech unicorn after raising $650 million in August while Vedantu was the fifth startup to bag the unicorn tag after a $100 million fundraising in September.
Growth-stage funding — defined as investments at Series B stage and later — totalled $9 billion across 93 deals in Q3 and accounted for about 48% of the total deal value. This is a 36% increase in value from $6.6 billion in Q2. Meanwhile, the deal value of pre-seed and seed-stage deals more than doubled to $277.8 million in Q3 from $118.5 million in Q2.
In the first nine months of the year (9M 2021), Indian startups raised over $33 billion — more than 3.8 times the $8.57 billion raised in 9M 2020 — mostly due to a strong Q3. Deal volume, meanwhile, was up 65% year-on-year to 1,121 deals in the period.
“With record capital inflows we expect that companies, particularly in consumer, fintech, edtech, and social will remain very aggressive on customer acquisition and growth. We will also see a war for talent as companies look to hire fast to execute on a high-growth agenda,” Ashish Sharma, managing partner, InnoVen Capital India told DealStreetAsia.
The India Deal Review: Q3 2021 report covers fundraising by startups in the region in the second quarter, with extensive data on:
- Top deals of Q3 2021 and 9M 2021
- Top sectors in terms of fundraising
- Most active investors in the quarter
- Insights from prominent investors
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