India’s startup ecosystem has largely been unhindered by the pandemic in 2020. The country attracted a lot of eyeballs in terms of investor interest, all thanks to the prowess demonstrated by Indian startups turning unicorns along with the massive private equity investment driven by Reliance Industries.
According to the data collected by consulting firm Praxis Global Alliance, last year saw close to 59 international investors making their debut private equity and venture capital investment in India.
The global investments came despite all the geopolitical challenges caused by the Galwan Valley Incident, which halted all incoming Chinese investments. The consulting firm highlighted that 2020 saw a 37% rise in global first-time investors, which poured funds into Indian startups compared to 2019, wherein the number stood at 43.
The first-time investors, however, are not the only highlights of the total investment in Indian startups in 2020.
Besides attracting more foreign investors to the country’s startup ecosystem, Indian startups also witnessed larger bets and raised bigger chunks of capital. Praxis’s data shows that the top 10 international investor entrants in the last year participated in $7 billion worth of deals – much higher than $1.2 billion in 2019.
Some of the noteworthy instances of global investors tapping into India’s startup potential include sovereign funds like Saudi Arabia’s PIF aka Public Investment Fund which infused a whopping $4 billion in RIL’s Jio Fibre assets, Luxor Capital Group which invested in Zomato, Alkeon Capital backing the homegrown edtech giant Byju’s and South Korea’s NXC Corporation investing in DMI Finance.
Praxis’s data also showed that India saw international investments pouring in from over 15 different countries. Among them, 60% of investors were headquartered in the United States, followed by 7% located in Japan and South Korea. The Middle East region also made up a significant portion of India’s international investor base.
When it comes to the type of startups that attracted the highest number of investment deals by first-time international backers in 2020, they were: consumer apps and platforms (14 deals) and SaaS Software-as-a-Service products along with A.I. or Artificial Intelligence startups which scored 11 deals.
Madhur Singhal, CEO and Managing Partner at Praxis Global Alliance, in a statement about the same, mentioned that Indian internet-based companies are now scaling up rapidly, and this has gotten global investors excited about the future potential of the country. Therefore they wish to participate in India’s startup growth with more enthusiasm.
Furthermore, he also added that one must take note that many experienced fund managers from India who worked at global investment firms have now turned into entrepreneurs themselves or set up their own funds as well.
All in all, as of December 2020, India has been home to a whopping 37 unicorns now, 11 of them making it into the coveted ‘$1 billion club’ in the pandemic year itself.
It now remains to be seen what lies ahead for the Indian startup ecosystem as we move into the ‘new normal’ in 2021 and beyond. We will keep you updated on all future developments. Until then, stay tuned.