Indian Startups Bag Record $36 Billion Funding In 2021
In 2021, India¡¯s startup ecosystem notched up a record investment of nearly $36 billion in privately held companies. The manifold rise in demand for digitization amid pandemic, coupled with positive market sentiment are seen as the key reasons behind this.
Startups turning unicorns and raising IPO funding have been the two phrases that have been occupying news headlines every now and then, haven't they? But this year has been extra special for Indian startups.
In 2021, India¡¯s startup ecosystem notched up a record investment of nearly $36 billion in privately held companies. The manifold rise in demand for digitization amid the pandemic, coupled with positive market sentiment is seen as the key reason behind this.
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The funding breakup
As per UK-based investment data platform Preqin¡¯s estimates, venture, and private equity investments increased more than three-fold during this year 2021, up from the $11 billion mark achieved by Indian startups in the previous year 2020.
Preqin¡¯s data exclusively shared with ET showed that the bulk of investments was directed towards pre-IPO funding rounds in companies like Ola, Zomato, Policybazaar, Nykaa and Paytm, with the top 10 deals totalling up to $5.58 billion.
Besides the rise in the number of deals, Indian startups also raised bigger financing rounds in 2021, vis-a-vis previous years, as risk capital funds stepped up to take larger bets on high-growth companies early on. This has resulted in companies being able to fetch much higher valuations, often doubling and even tripling it in successive funding rounds.
Most active investors in 2021
Funds such as Tiger Global, Falcon Edge, Sequoia Capital, Accel, Blume Ventures have been among the most active investors this year. Even SoftBank, which is popular for its larger-sized bets, invested more than $3 billion in Indian startups this year, thus making it the largest infusion in Indian startups by the Japanese investment firm in a single year.
Also Read: From CRED To UpGrad: Top 10 Startups In India As Per LinkedIn
Unicorns Galore
This year saw nearly 40 companies turning unicorns in India. In fact, 2021 also witnessed the fastest entrant into the unicorn club, Mensa Brands, which managed to turn unicorn in just about six months! Besides the unicorn club and IPO Funding, dozens of companies and startups like Cred, Groww, Cards24, Licious, etc. also saw their valuations grow manifold in 2021.
Also Read: Unicorn Razorpay's Value Grows Seven-Fold In Just Over 1 Year
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