The first half of 2020 saw investors including SoftBank and Naspers leading large rounds of funding in unicorn companies even as OYO, Swiggy, Postman, Byju’s, Zomato were among the top fundraisers.
Startup funding in the first half (H1) of 2020 declined 11 per cent in terms of deal value and 31 per cent with respect to deal volume from the year-ago period, according to the data from research service Venture Intelligence focused on private company financials, transactions and valuations. Investors put $4.1 billion across 270 deals in Indian startups during the first six-month period of 2020 vis-à-vis $4.6 billion invested in 393 deals during H1 2019. The first half of 2020 saw investors including SoftBank and Naspers leading large rounds of funding in unicorn companies even as OYO, Swiggy, Postman, Byju’s, Zomato were among the top fundraisers.
The fall in the funding amount has been largely due to the Covid and lockdown related challenges apart from the overall economic gloom. While the first quarter of 2020 was still relatively better with investments raised by OYO ($807 million), Byju’s ($200 million), Swiggy (around $155 million), Zomato (around $155 million), CureFit ($110 million), Unacademy ($110 million), Bounce ($105 million), BharatPe ($75 million), Innovaccer ($70 million), MoneyTap ($70 million) and others, the second quarter lacked significant action. However, investments into startups including Postman ($150 million) and Byju’s (undisclosed amount in June raised from BOND) helped retain the little optimism in the ecosystem.
“The (Covid) situation was building up before March as overseas travel etc. was getting shut even in February due to China. So things were a bit quiet. Also, investors from China were already facing this issue in January. Also, the macroeconomic situation in India was slowing down. This was also a factor in slowing down investments,” Arun Natarajan, Founder, Venture Intelligence had told Financial Express Online.
However, the overall PE-VC investment during H1 2020 looked positive with 12 per cent growth to $18.8 billion across 341 deals. Thanks to the massive war chest raised by Mukesh Ambani’s Jio Platforms, the PE-VC investments were up from $16.8 billion put across 503 transactions in H1 2019. Reliance had raised over $15.3 billion from 10 marque investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton and PIF. The first half of 2020 also saw fall in deals worth $100 million or more to 24 from 37 such transactions during H1 2019. “But for the Jio investments, overall PE-VC investments during H1 2020 would have fallen 45% compared to H1 2019,” according to Venture Intelligence.