Fresh investments: India’s Internet firms add $4 billion to cart in July-Sept

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New Delhi | Published: October 17, 2019 4:19:29 AM

The fundraising takes the tally for the January-September period to $9.13 billion, according to data sourced from market research firm Tracxn. Firms operating in the consumer and retail space have received bulk of the money — over $1 billion, the data showed

Flipkart food, flipkart grocery, BigBasket, Amazon, Grofers, food market in india, grocery market in India, SoftBank india investment, Alibaba india investment, online food retailers, Flipkart CEOInternet firms raised a hefty .4 billion in 2018 against .5 billion raised in 2017, according to estimates by Jefferies.

Indian internet firms raised close to $4 billion in the three months to September, about 15% more than in the year-ago period. That takes the tally for the January-September period to $9.13 billion, according to data sourced from market research firm Tracxn.

Firms operating in the consumer and retail space have received bulk of the money — over $1 billion — the data showed. Indeed, global investors seem to be bullish on local players — SoftBank-led Grofers’ $200 million funding round in May, having backed the Gurgaon-based online grocer earlier in 2015 and 2018, alongside other investors.

BigBasket got Alibaba on board, which led a $300-million funding in the firm last year while also participating in its $150-million financial round in March. Media reports say SoftBank and Ant Financial could be participating in a fresh $2-billion financing round by Paytm, valued at close to $15 billion.

In the three months to March, online firms received funding of $2.89 billion. The number stood at $2.4 billion between April and June, analysts at Tracxn said. In the consumer internet space, food delivery firms Swiggy and Zomato are locked in a race to outdo each other in a market estimated to touch $12.53 billion by 2023, according to a recent report by DataLabs by Inc42.

Swiggy and Zomato are understood to be negotiating large-sized deals, as much as $600 million-$700 million. Between February and March, Zomato raised a little over $100 million. Analysts at Kotak Institutional Equities (KIE) said a surge of capital has pushed grocery and food delivery firms to spend heavily on customer acquisition and infrastructure creation. Founded in 2014, Swiggy now delivers in over 450 cities while Zomato ramped up its presence in over 500 cities.

Losses for the companies remain elevated nonetheless. Paytm’s parent firm posted losses of close to Rs 4,000 crore in FY19 against over Rs 1,000 crore in the year-ago period. According to KIE, Swiggy’s aggregate losses during FY2015-18 was $113 million. Zomato’s losses during the period was $146 million. BigBasket and Grofers’ losses for the period stood at $147 million and $74 million, respectively.

Internet firms raised a hefty $8.4 billion in 2018 against $7.5 billion raised in 2017, according to estimates by Jefferies. Analysts at EY said large investment rounds will continue in companies which are reaching scale and ready for growth. Both PE and VC firms and global companies will keep the “funding tap open”, analysts reckon.

Fintech companies raised close to $700 million between July and September while those in the deep tech space raised nearly $800 million. Auto start-ups attracted about $400 million in funding in the quarter, data from Tracxn showed.

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