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Indian companies raised USD 63 billion from PE-VC investors in 2021 | India Digest Volume 81

Written by KrASIA India Digest Published on     3 mins read

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In this round of India Digest from December 31, 2021 to January 6, 2022, read our big story of the week, the weekly buzz, and more.

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The Indian startup ecosystem has begun the new year on a high note. Global investors have continued writing big fat checks for local companies even as the COVID-19 infections, including the Omicron variant, are on the rise in the country.

For instance, Fractal Analytics, a two-decade-old Mumbai-based AI and analytics company recently raised USD 360 million from private equity major TPG at a valuation of more than one billion dollars. D2C personal care brand Mamaearth also turned unicorn after raising a USD 52 million round earlier this week. Similarly, B2B e-commerce startup Udaan closed a USD 200 million debt financing.

On the early-stage side, VCs are exploring and backing new innovative startups. Bambrew, a three-year-old sustainable packaging startup just bagged USD 2.35 million in pre-Series A. Similarly, Bolo Live, a social live-streaming app received a USD 2.4 million Series A check.

Many investors believe the funding deluge that kicked off in 2021 is likely to carry on this year. To provide context for what is expected in 2022, we examined VC and PE investments that flowed into the country last year, as well as which industries reaped the most investment.

The Big Read

Indian companies raised USD 63 billion from PE-VC investors in 2021

The year 2021 turned out spectacular for India’s startup community. Venture capital and private equity firms pumped a record USD 62.7 billion into local companies across 1,202 deals, up 57% from USD 39.9 billion they invested across 913 deals a year ago, as per a new report by Chennai-headquartered research firm Venture Intelligence.

Of the total amount raised by local firms, venture capital investments—classified as seed to late-stage funding in companies less than ten years old—stood at USD 34.7 billion across 1,070 deals, 200% more than USD 11.4 billion across 795 rounds in 2020.

2021 witnessed eight investments worth USD 1 billion or more, led by Flipkart’s USD 3.6 billion pre-IPO round in July 2021, which marked SoftBank’s return on the e-commerce firm’s cap table. The Japanese conglomerate invested USD 2.5 billion in Flipkart in August 2017 but sold its shares a year later when American retailer Walmart acquired the e-retailer. Another notable billion-dollar-plus deal in the Indian startup ecosystem was edtech decacorn Byju’s USD 1.4 billion fundraise led by Prosus Ventures.

Furthermore, there were 97 mega deals—rounds over USD 100 million—worth USD 24 billion last year, compared to 28 such investments worth USD 5.5 billion in 2020, the report noted.

The Weekly Buzz

1. Amazon maintained its lead over Flipkart as its India marketplace revenue surged 49% in FY 2021. Amazon Seller Services, which runs Amazon India’s online marketplace, posted INR 162 billion in operating revenues for the fiscal year (FY) ended March 2021, an increase of 49.3% over a year ago, and Flipkart Internet, the marketplace arm of Flipkart, posted INR 78 billion in revenue from operations, an increase of 32% over FY 2020. Furthermore, Flipkart Internet widened its losses by 48.8% to INR 28.8 billion compared to the previous year, whereas Amazon slashed its losses by over 18% to INR 47.48 billion from INR 58.49 billion in FY 2020.

2. 4 takeaways from 2021 from Harsha Kumar of Lightspeed Venture Partners. In an interview with KrASIA, Kumar said a large number of companies started in 2021 as COVID-19 gave people time to think about what they wanted to do with their careers. With the influx of growth-stage capital, many venture funds that were Series A investors started writing seed and pre-seed checks, because check sizes grew, she added. That also led to more people starting businesses because additional capital was available at early stages. She believes that in 2022, large volumes of capital will continue to flow into the country, check sizes will become larger, and more startup IPOs will take place.

Top Deals This Week

In partnership with data tracker Tracxn

 

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