The unprecedented impact of the Covid-19 pandemic on various industries and markets across the world, was felt in India too. Subsequently, the Indian startup ecosystem learned to deal with and recover from the pandemic, more so during the latter half of 2020.
Despite these tough times, the Indian Startup Ecosystem showed some signs of improvement in the number of funding deals during 2020. It goes on to prove that the Investors continue to see value in the innovation.
The Indian Startup Funding Statistics, 2020.
According to Inc42 Plus, the Indian startups raised a total funding of $11.5 Billion in 2020 (till 17-Dec-2020). In comparison, this was 10% lower than the total funding raised in 2019, which was $12.8 Billion.
The number of deals count increased by 14% i.e. 924 in 2020, in comparison to 812 in 2019. This is largely a positive sign as many more startups raised capital, during the Covid-19 pandemic. However, the Investors took a much cautious approach in terms of the investments, the average ticket size per deal reduced to $12.4 Million in 2020, from the earlier average of $15.8 Million in 2019.
On the one side, the startups based in sectors like Retail, Automobiles, Travel, Tourism, and Transport really struggled with near zero revenues, while on the other side, startups in sectors like EdTech, eCommerce, FinTech, Hyperlocal Delivery, Enterprise Tech, and HealthTech truly flourished, witnessing an unprecedented surge in traction, engagement as well as investor confidence.
Top 5 Startup Sectors in 2020.
In terms of the startups being funded (deals count), FinTech, Enterprise Tech, and EdTech were the top 3 sectors in 2020. The sudden surge in the adoption of online learning products and related services in 2020, helped EdTech usurp the third spot from eCommerce. So, undoubtedly the 2020 belonged to EdTech.
The Seed-stage Funding Statistics of India, 2020.
Contrary to the expectations, the overall funding indicators were quite positive for the early-stage rounds. The total capital raised at the seed stage was $403 Mn scoring a healthy 58% growth as compared to 2019, which was $255 Mn. Even in terms of the number of deals (deals count) it showed a 22% growth over 2019 i.e. 380 vs. 312.
Seed-stage Funding: What the Data Says?
Enterprise Tech and EdTech remained the most preferred startup sectors at the seed stage. Both the sectors combined accounted for nearly a third (29%) of the total 380 funding deals at the seed stage. These are great signs for the Indian startup ecosystem, considering that early-stage startups attracted funding, despite tough times.
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