Unicorns like Byju’s, First Cry, and Zomato bagged one in every three dollars invested in startups this year
- The coronavirus pandemic hit businesses all across the world, leading to pay cuts and job losses for millions.
- In the first six months of 2020, startup funding has fallen by 29% – from $5.9 billion in 2019 to $4.2 billion this year.
- As startups take stock of how their businesses are set to fit in in a world during and post COVID-19, investments could pick up in the second half of 2020.
This has resulted in the Indian startup ecosystem seeing the worst first half (H1) funding in three years, according to Tracxn's India-Tech Semi-Annual Fact Sheet. In the first six months of 2020, startup funding has fallen by 29% – from $5.9 billion in 2019 to $4.2 billion this year.
While 2019 saw six unicorns (startups with a valuation of over $1 billion) in the first six months, in 2020 there were three – Nykaa, Pine Labs and First Cry.
The biggest funding rounds were led by the unicorns who took home 30% of all the funds raised this year.
Here are the top startups that have raised funds this year so far
|Startup||Funding raised this year|
|First Cry||$300 million|
According to Tracxn, the top three sectors that received funding are Alternate Lending, Edtech (Test preparation tech) and payments.
The second half of 2020
As people get adjusted to the new normal and startups take stock of how their businesses are set to fit in in a world during and post COVID-19, investments could soon pick up. Several investment funds have also raised money to start doling out cheques.
Notably, Sequoia India has raised $1.35 billion for two new Sequoia India funds: a $525M venture fund and a $825M growth fund. Sequoia India’s managing director Shailendra J Singh believes that ironically enough, the Covid pandemic has already catalyzed a massive change in almost every startup’s trajectory. “Dozens of founders in our region have demonstrated outstanding leadership and agility in adapting to the pandemic. Costs have been trimmed, product roadmaps have been prioritized, new revenue levers have been unlocked and wonderful new talent has been hired. We need to build on this Covid-induced state of high performance, stick to first principles, and remain relentless in our pursuit of sustainably successful companies,” he said in a note.
Angel investment platform Inflection Point Ventures (IPV) has invested over 20 crores in the last 60 days into eight startups and its plans are only getting more aggressive. “While we don’t have targets, we are looking to invest in 40-50 startups this year,” Vinay Bansal, co-founder of IPV had told Business Insider in an earlier interview.
Despite the coronavirus pandemic, they are happy to invest in startups. “We are not moved by greed or fear. In fact, we see this as a great opportunity to invest in startups where we might not have got the opportunity to invest otherwise,” he said.
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