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Wed 22 Jan 2020 01:50 PM

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Indian start-ups attract $11.1bn funding amid slowdown gloom

Jabbar Internet Group co-founders, Abraaj Group and Vy Capital among UAE-based investors who funded Indian startups

Indian start-ups attract $11.1bn funding amid slowdown gloom

Rank: 11

Country/Territory: India

12-month % change (Q2 2018-Q2 2019): 7.7%

6-month % change (Q4 2018-Q2 2019): 1.4%

3-month % change (Q1 2019-Q2 2019): 1.4%

Indian start-ups have raised a total of $11.1 billion in 2019, including from some of the UAE-based funds and investors, despite the two successive quarters of sub 5 percent GDP growth, equalling the longest economic slowdown in the country in the past 23 years.

Last year’s total start-up funding was just 2.4 percent lower than that was raised in 2018, making the Indian startup ecosystem the only other sector which could weather the overall slowdown sentiment in the country.

India’s stock market – the flagship Sensex and Nifty indices to be precise - was the other segment which has performed to peak levels in 2019, unmindful of the sagging macroeconomic numbers and demand growth across various industrial sectors in the country.

​Sequoia Capital, Accel Partners, and Omidyar Network emerged as the top three active investors in 2019, according to the latest study by YourStory Research on start-up funding in India.

Funding by Samih Toukan, Samih Abdel Rahman and Hussam Khoury, co-founders of the Dubai-based start-up investment firm Jabbar Internet Group, in India-based ride-hailing platform Ola Cabs was among the investments made by Middle East-based funds and investors in Indian start-ups in 2019.

Abraaj Group, which has funded grocery retail platform Bigbasket, and Vy Capital, which has backed online food delivery major Zomato, are the other major UAE-based funds which have pumped in money into Indian start-ups.

Indian start-ups entered into as many as 830 funding deals in 2019, with the average size of deals amounting to $13.3 million, the report has revealed. Of these, 57 deals were for amounts above $100 million.

According to the report, fintech and financial services startups accounted for the maximum amount raised, while start-ups in transport and logistics sectors accounted for the maximum number of funding deals in 2019.

As many as 720 Indian start-ups raised funds last year, with Delhi-NCR (National Capital Region) topping the list for total money raised as also the maximum number of deals entered into.

According to the report, certain sectors, however, saw a decline in funding last year, Funds raised by foodtech start-ups slumped to $416 million in 2019, from $1.8 billion in the previous year. Similarly, edtech start-ups also saw a fall in their fundraising activity in 2019 compared to last year.

Defying the current economic slowdown, the Indian start-up ecosystem saw nine young companies enter the unicorn club in 2019.

BigBasket, Delhivery, Ola Electric, US-based Druva Software, US-headquartered Icertis Software, Dream11, CitiusTech, Rivigo, and Lenskart were the ones that attained the unicorn status last year

Of the 720 start-ups that raised funds in 2019, Paytm, Udaan, Delhivery, Ola (including Ola Electric), and Lenskart together raised $2.2 billion, the report said.