Growth stage investments in Indian start-ups cross US$ 1 billion in January-June 2019

Growth stage investments in Indian start-ups set a new record by breaching the billion dollar mark as it stood at US$ 1.17 billion in first half of 2019, as compared to US$ 994 million from past year.

Series B and C rounds are generally considered as growth stage for start-ups. Indian start-ups set a record by breaking the billion-dollar mark in the first half of this year.

The start-ups have raised a total of US$1.17 billion in the first six months of 2019, rising from US$ 994 million in the similar period last year, and a 47 per cent surge from US$ 616 million in 2017, according to data from Venture Intelligence, a start-up data tracker. 

However, there has been fall in number of deals from last year, 85 to 76 this year. This represent that deal sizes have grown in recent times, with the total investment increasing in the same period. The average deal size has increased from US$10.26 million in 2016 to US$ 15.44 million this year so far. 

Until now, Series C round has reached as much as $72 million, emphasised by two-wheeler rental start up Bounce’s fundraise that took place last month, directed by US-based funds B Capital Group and Falcon Edge Capital. Stanza Living, student housing start-up, and Bounce’s rival Vogo, are in talks to raise about $50 million in Series C and B rounds respectively,

This has promoted the entry of new investors in growth stage deals alone.

Growth stage investors include Belgian firm Sofina, A91, Iron Pillar and Mirae, US-based Stead view Capital and Sands Capital, and Singapore’s Hillhouse Capital.

Despite the strong investments, the lack of strength in the growth stage market and extreme estimation concerns investors.

Financiers say the unfilled space is currently packed by overseas investors and over time will get accompanied and swapped by local funds. For India-based funds, the proposal would be that they are local and more dedicated and have more ability to add value.

Additionally, traditional growth stage investors, such as Sequoia Capital and Accel Partners, are now favouring early-stage deals, including Sequoia’s Surge, a dedicated fund for the seed stage.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.