VC firms pump it up! Innoven Capital leads the pack followed by Sequoia

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Updated: August 17, 2021 8:13 AM

Logistics and delivery firms gain the maximum in terms of investment

The accelerated digital adoption in the pandemic period has created more opportunities for start-up across categories such as food-delivery, fintech, health-tech, ed-tech.

Despite the pandemic, Indian start-ups have continued to raise funds with 23 new start-ups entering the unicorn club. In total $35.38 billion have been invested by private equity and venture capital firms till June 2021, as per data from analytics firm Tracxn, show. While Innoven Capital has invested approximately $12.16 billion, Sequoia Capital and Tiger Global Management have invested $10.78 billion, $8.93 billion respectively.  “It is a comprehensive change that has taken place in the start-up ecosystem. Even family offices, Ultra HNIs who wanted to invest in start-ups throughout these years and have been watching this space, they have also now started seeing solid reasonings that this is the right time to invest,” Sunil K Goyal, managing director and fund manager, YourNest, told BrandWagon Online.

Of all the startups that have received funding so far, Swiggy, Byju’s, Grofers, PharmEasy, Oyo, Zeta, Delhivery, Cred, Udaan, ReNew Power Ventures, ShareChat, Meesho have made it to the top funded companies’ league. With e-commerce witnessing a surge, its logistics and supply chain sector has seen heavy flow of investment. In total, around $5 billion has been invested in the sector till June.

 

The accelerated digital adoption in the pandemic period has created more opportunities for start-up across categories such as food-delivery, fintech, health-tech, ed-tech. “Investments in start-ups that digitise life, especially in vernacular languages and consumer brands are going to spike. However, the investors nowadays look at the clarity of vision, the area where the startup is going to focus rather than emphasising on business models,” Internet business expert Sreedhar Prasad. 

Facebook backed social e-commerce platform Meesho, which entered the Unicorn club this year after raising $300 million, plans to utilise the funds to strengthen its talent pool across verticals including tech, product, and business, among others and it aims to double its tech team in the coming months. “With the new funds raised, we are focused on expanding our vision — from helping aspiring women entrepreneurs to creating Meesho as a single ecosystem that will enable all small businesses in India to succeed with e-commerce,” Vidit Aatrey, co-founder and CEO, Meesho, said.

Further, investment will be used to create marketing campaigns promoting its USP, ‘to help build entrepreneurs with zero capital.’ “Over the next year, our plan is to grow our selection by tapping into different supply hubs and increase the online penetration of unorganised retail. Whereas on the demand side, we aim to capture the large TAM (Technology Acceptance Model) of online users, coming especially from the smaller tiers,” Aatrey stated.

As for ed-tech firm Byju’s, most of the capital will be deployed to create better products and expand partnerships. It plans to focus on creating holistic learning experiences on a single platform strengthening its offerings, Anita Kishore, chief strategy officer, Byju’s said. The platform currently has over 100 million students on the back of a year-on-year renewal rate of over 86%. In addition, the core business is growing at 100 %, year-on-year, Kishore mentioned.

The Bengaluru-based firm, which is currently valued at $16.5 billion, recently acquired Singapore-headquartered Great Learning for $600 million.Prior to this, it had announced the acquisition of US-based digital reading platform Epic for $500 million. In the recent past, the firm has acquired a clutch of education service providers including Toppr, Aakash Educational Services Ltd (AESL), besides WhiteHat Jr. 

Three-year-old CRED is yet another start-up to attract investment and is now the youngest firm to be valued at $2 billion. “Over the past three years, we’ve been able to grow fast by singularly focusing on member value. With nearly six million creditworthy Indians in our member base, our growth has shown the value that a frictionless, high-trust platform can offer individuals, brands, and institutions. Building distribution is key to creating a platform, and scaled marketing campaigns have given us the reach to educate a wide audience about what CRED stands for and the rewards of membership,” Kunal Shah, founder, CRED, said.

Even as the start-up ecosystem has fared well so far, investments in these divisions are not sufficient as the 500 million people in India who are at a cusp of digital adoption require far more hand holding than the rest of the community, internet business. “Expansion, tech, people – these areas usually emerge as the most discussed ones by the startups that raise money. expert Prasad opined. The startups need to invest in customer acquisition of the vernacular segment,” he noted.

Read Also: How brands leveraged Tokyo Olympics as a platform to connect with consumers

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