Blog

Capturing a majority share of the market has been the driving force behind this surge in acquisitions among Indian startups

The year 2021 witnessed 194 mergers and acquisitions, a 137% rise from 82 acquisitions

While thrasio-styled ecommerce startups saw the highest acquisition, edtech and fintech were not far behind when it comes to acquisition

The Indian ecosystem has witnessed a massive influx of capital mostly from foreign soil in the year 2021. It is not new that foreign VC firms have a huge interest in the country’s ecosystem. However, the pandemic era brought a new time in the startup ecosystem. It was the time of new habit formation on the back of technology-supported startups who delivered everything from groceries to medicine to sequin sarees to consumers. Thanks to the hundreds of new-age startups who made this happen! The time had discovered the true potential of Indian tech startups, as more and more Indians opted for e-learning, online payment, grocery delivery, and automation to avoid stepping out.

To put in some perspective with numbers, Indian startups have raised $39 Bn this year (until Dec 4, 2021), which is a 255% rise from $11.8 Bn in 2020. Not only have the bigger cheques landed in 2021, but the number of deals has also risen stupendously. In 2020, as per Inc42 Plus analysis, a total of 1,442 deals were recorded which is 51% higher than a total of 953 deals that have taken place in 2020.

Apart from pumping in cash for hiring talent and launching new products, startups are all in for the acquisition of a player in the same place where they want to gain more share or in a new area where they want to foray into.

For this reason, the year 2021 saw the highest number of startup acquisitions and mergers. As per Inc42 Plus analysis, the year 2021 witnessed a total of 194 mergers and acquisitions, a 137% rise from 82 acquisitions that were reported in 2020. It was also 71% higher than a total of 113 mergers and acquisitions deals that happened in 2019. 

While the country’s ecosystem was introduced to the Massachusetts-based Thrasio model, several D2C brand aggregators made headlines for receiving bigger cheques and acquiring D2C brands to expand their product portfolio. However, even with more than dozens of startup acquisitions by thrasio-style ventures, edtech and fintech startups were not left behind.

For instance, the highest valued startup in India — BYJU’s was on an acquisition spree with its 10 acquisitions across the world by shelling over $2.7 Bn. 

Similarly, enterprisetech and fintech startups also acquired a total of 25 and 24 startups respectively in 2021.  

Now, let’s take a look at the biggest startup acquisitions and the acquisitions made by Indian startups this year. 

Prosus, a global consumer internet group that operates fintech giant PayU in August this year announced acquiring payments gateway company BillDesk for $4.7 Bn, making it the largest acquisition deal ever recorded in the country’s booming fintech space.

The problem-solving ability of Indian startups has further folded traditional Indian conglomerates to pick up stakes in them. Ratan Tata’s Tata Capital and Mukesh Ambani’s Jio have been placing their bets on multiple startups since last year. This year, we saw Tata Capital acquire majority stakes in unicorn online grocery player BigBasket and online pharmacy platform 1mg for $1.5 Bn. 

Thrasio-Styled Comes In Style

Thrasio-style business model was introduced in 2021 in India, but it was well-received by the country’s startup ecosystem when 10Club picked up the country’s largest seed round worth $40 Mn in June this year. Later, FirstCry’s Thrasio arm GlobalBees mopped up $150 Mn in a Series A round from its parent, Lightspeed Venture Partners, Premji Invest, Chiratae Ventures, SoftBank and Chrys Capital.

Mensa Brands, another D2C brand aggregator this year went on to become the country’s fastest unicorn within six months of its inception. 

The Thrasio model is named after Massachusetts-based startup Thrasio which is at present valued in the range between $3 Bn – $4 Bn within three years of operation. Thrasio consolidates third-party sellers on Amazon in the US and helps them to scale further. In Indian contexts, GlobalBees, MensaBrands and the likes of others are acquiring D2C brands to help them grow their business. 

While Mensa Brands has acquired around 12 D2C brands, Gurugram-based UpScalio picked up majority stakes in 8 D2C brands. 

BYJU’s Acquisition Spree Continues

Be it funding, scaling, or acquisition – edtech decacorn BYJU’s has been on top of the chain. 

After acquiring WhiteHat Jr last year for $300 Mn last year, the IPO-bound decacorn has acquired a total of 10 companies for over $2.7 Bn, with more under its sleeves. One of the major acquisitions of BYJU’s this year was traditional offline coaching centre Aakash Educational Services for over a $1 Bn. The edtech giant has also grabbed US-based EPIC and Tynker, and most recently Austria’s GeoGebra in a bid to capture international markets.

Following The Lead: Unacademy 

Closing the gap in terms of subscription count with BYJU’s, Bengaluru-based Unacademy has also four startup acquisitions in the edtech space – TapChief, Handa Ka Funda, Rheo TV and the latest being Swiflearn to scale its operations. 

The startup which entered the unicorn club in September last year after picking $150 Mn, is now valued at more than $3.44 Bn, making it the second-highest valued edtech startup in India.

Good Glamm Group: Strengthening The Content To Commerce Flywheel

The beauty ecommerce platform MyGlamm’s parent not just achieved the unicorn club status this year, but also positioned itself as a house of brands following the content-to-commerce model. 

The company with its acquisition of ScoopWhoop, MissMalini, and POPxo has strengthened its grip on the content commerce market, whereas with the acquisition of MomsCo and BabyChakra it has expanded its product portfolio.

Well, that’s all folks, wait up for our annual funding report for more insights on how M&A changed in this year.