Despite lack of over $1 billion funding rounds in the last quarter, India -- the second largest startup ecosystem globally saw multiple ticket rounds of more than $100 million from Delhivery, Ola, Bigbasket, FirstCry etc.
Even as venture capital funding globally decreased quarter over quarter, India delivered positive growth in Q1 2019. Despite lack of over $1 billion funding rounds in the last quarter, India — the second largest startup ecosystem globally saw multiple ticket rounds of more than $100 million, said a report by KPMG on venture funding globally. Importantly, across the 10 biggest rounds in Q1 2019, Softbank was the only investor backing in multiple rounds.
Softbank had invested in e-commerce logistics startup Delhivery (among the latest unicorns) in its $413 million Series F round in March. The Japanese fund also backed online store for kids and baby products Firstcry with $149 million in January. Softbank also put money in $60 million raised by grocery app Grofers that also saw participation from Tiger Global and Sequoia Capital, as per data sourced from Tracxn.
Comments from Softbank will be updated as and when received.
However, automotive services businesses had attracted maximum capital in the quarter led by cab hailing company Ola raising $91 million in January from Steadview Capital and $300 million in March from Hyundai and Kia Motors. In addition, auto classifieds platform CarDekho had raised $110 million in its Series C round in January from Sequoia, Hillhouse Capital, Capital G, and Axis Bank.
“Automobile marketplace platforms also continued to receive attention, a trend expected to continue for the next several quarters,” the report titled Venture Pulse Q1 2019 said.
With respect to the next breakout sectors, edtech is expected to have significant growth in the near future.
“Edtech has the potential to become a truly breakout sector in India. With no clear leader in the space, many companies are competing to develop content and raise funding rounds. It is anyone’s game — which will make the next few quarters very critical,” said Nitish Poddar, Partner and National Leader, Private Equity, KPMG India.
The global venture financing declined from around $75 billion in Q4 2018 to $53 billion in the last quarter. In Q1 2018, the global financing stood at a little over $60 billion.
“On the flip side, the number of first-time investments continued to fall this quarter, accounting for only 589 deals. The continued focus on later stages, may well spell longer terms trouble for early-stage startups — the hotbed of future growth,” said Arik Speier, Co-leader, KPMG Enterprise Innovative Startup Network, KPMG International and Partner, Head of Technology, KPMG Israel.
The weak start of venture financial was particularly in China where the amount dropped to $5 billion from $10 billion in the preceding quarter partly due to existing trade situation between the US and China and the adjustments in the Chinese economy.