IBEF: March 18, 2021
According to a report, venture capital investments in India reached US$ 10 billion in 2020, and as many as 7,000 new start-ups were founded over the same period.
According to the Bain & Company's latest India Venture Capital report, consumer tech, SaaS, and fintech contribute to approximately 75% of VC (Venture Capital) investments by value, with consumer tech bringing the most funding.
According to the report, which was prepared in collaboration with the Indian Private Equity & Venture Capital Association (IVCA), COVID-19 had a massive impact on boosting digital trends, as evidenced by VC money flows and the emergence of various and digitally founded business strategies across sectors.
Total deal value stood at US$ 10 billion in 2020. The deal volume increased by 7% YoY, at ~ 810 VC deals in 2020 compared to 755 in 2019. Deal volume growth highlighted strong foundations for India’s start-up ecosystem, with innovative products keeping pace with the challenges observed in 2020.
As per the report, India held its leading position as one of the top five start-up ecosystems in the world, with 7,000 new start-ups established in 2020.
It also stated that the country’s start-up ecosystem is strong, with 12 more companies achieving ‘unicorn’ status in 2020, placing India’s unicorn tribe at 37.
At present, ~ 9% of India's more than 110,000 start-ups are funded, indicating significant room for additional investment.
Mr. Sriwatsan Krishnan, Bain & Company partner and a co-author of the report, said, “2020 recorded US$ 10 billion in VC investments, and there were a few themes that play out differently, particularly in terms of smaller deals on average compared to the multiple mega-deals seen in 2019.”
The number of active VC funds in the country, which has been steadily increasing over the last four years, reached around 520 in 2020.
VC exists stood at US$ 1.3 billion in 2020. According to the report, one-third of the exit value came from EdTech and about 20% from food-tech, both of which recorded an increase in end-user adoption and funding activities in the pandemic.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.