This also means startup investments in just the first five months of 2021 is nearing the levels seen for the full 12 months of last year. At $8.76 billion, the amount of capital infused into the startup ecosystem is almost 81 percent of the total $9.94 billion recorded for the full year of 2020, according to YS Research data.
The number of startup deals was up slightly by 4 percent to 441 in Jan-May 2021 from 424 deals in H1 2020. By comparison, the total number of deals in the whole of last year was 881.
The fierce increase in startup funding activity has been driven largely by a surge in late-stage deals and a flurry of new unicorn additions — a record 14 new startups valued at over $1 billion — in just the first five months of 2021.
Of the total newly minted unicorns, a good 11 — or ~80 percent of them — were added in the months of April and May alone, racking up the quantum of late-stage startup investments.
Late- and early-stage deals remain robust
With $6.29 billion in late-stage funding deals, these startups accounted for over two-thirds of the total $8.76 billion raised this year. Investors continued to bet on startups that are benefitting from and are poised to grow significantly due to the pandemic-accelerated digitisation that is happening in the country.
When compared with the $2.56 billion in late-stage investments recorded in H1 2020, this year saw a 2.5X times increase in late-stage deals in the Jan-May 2021 period and appears on track to touch new records this year.
Topping the mega funding rounds seen this year is foodtech major Swiggy’s $800 million Series J funding round from Goldman Sachs, Falcon Edge, Prosus Ventures, Accel, Think Investments, Qatar Investment Authority, Amansa Capital, Carmignac, and GIC Singapore.
Meanwhile, rival Zomato, which is planning a $750 million-$1 billion initial public offering later this year, also raised $250 million in venture investments.
Early-stage startup funding deals also remained robust in the Jan-May 2021 period.
The Indian startup ecosystem saw over 328 early stage deals, which made up more than two-thirds of the total 441 deals recorded in the first five months of 2021.
Investors continued to remain bullish in early stage startups, with investments into early stage deals nearly doubling to $903 million in Jan-May 2021 period from $536 million raised in the first half of 2020.
Meanwhile, growth-stage startups raked in around $1.2 billion in investments so far this year; that’s up slightly from $1.07 billion raised in the first half of last year.
Total number of growth-stage deals, however, declined 45 percent to 39 from 72 in H1 2020.
(Source: YS Research; Infographic by Tenzin Pema)
Fintech startup funding tops; foodtech, edtech follow
Fintech saw some notable milestones this year, particularly the addition of five new unicorns from the space as investments into the sector was the highest among industries at $1.83 billion.
Funding into foodtech majors Swiggy and Zomato helped rack up a total of $1.05 billion in investments into the foodtech sector, making it a close second to fintech in the total funding raised.
Edtech startup investments accounted for $891.8 million, while ecommerce recorded $756.5 million and healthtech $680 million.
Within the fintech space, insurtech startup Digit Insurance became the first company in 2021 to enter the unicorn club, with a $18 million fundraise in January, while Bhavin Turakhia-co-founded Zeta raised venture funding for the first time, with a $250 million investment — the largest-ever-single fundraise for a banking tech startup — from Softbank Vision Fund 2 that catapulted it to unicorn status.
Meanwhile, Kunal Shah-founded fintech startup CRED, which rewards its nearly six million members for paying their credit card bills, raised nearly $300 million this year and became one of the few Indian startups to turn unicorn after just two and half years since it was started. With that, it became the youngest fintech startup to cross the $1 billion valuation mark and achieve unicorn status.
Shortly after CRED, investment platform Groww, which was started in 2015, became the second-youngest fintech startup to achieve unicorn status after raising $83 million in funding.
Chennai-based non-banking financial company Five Star Business Finance was one of the new unicorns added in March 2021 after a $234 million fundraising round led by existing investors Sequoia Capital India, with participation from Norwest Venture Partners, as well as new investors, led by KKR with participation from TVS Capital Funds.
Other milestones among unicorns of 2021
In addition to fintech, other sectors like healthtech and social commerce also saw new unicorn additions, with InnovAccer emerging as the first healthtech startup and Pharmeasy the first epharmacy to achieve unicorn status.
Mohalla Tech, which is the parent company of social platforms ShareChat and Moj, social commerce startup Meesho, conversational messaging platform Gupshup, and home services marketplace Urban Company were among startups in the B2C space that entered the unicorn club. Among these, ShareChat raised $502 million as part of its Series E round, one of the largest funding amounts raised so far this year.
B2B marketplaces Infra.Market and Moglix, as well as SaaS startup Chargebee, which raised $125 million in Series E funding round led by Tiger Global, are also among the 14 new unicorns of 2021.
