Funding activities dropped drastically in March compared to the previous month Startup funding for March 2020 dropped by over 50%. Indian startups managed to raise only $354 million from 34 deals, compared to $714 million raised in February across 46 deals. At $1.74 billion (across 126 deals), startups also saw a 22% year-on-year decline in investments for the first quarter of 2020. The numbers reflect a significant slowdown in funding activities, primarily caused by a sluggish economy coupled with the ongoing nationwide lockdown.
Startup activities suffered another set-back when the Government of India tweaked it’s Foreign Direct Investment policy in a bid to limit opportunistic takeovers/acquisition of Indian companies amidst the pandemic As per the revised guidelines, any investor of a nation that shares land borders with India will now require government approval for making any investment in India. While the move to curb hostile acquisitions is well-intended, it can create an additional funding obstacle for home-grown startups. This is because China is one of the biggest stakeholders in the Indian startup ecosystem.
The pandemic has undoubtedly affected the startup funding scenario in India, but it has also created new opportunities for startups that can adapt to the current environment.
Just 3 months later in July, Indian startups witnessed 1484% jump in investment since March
Indian startups bagged a total of $5.61 billion investment from 82 companies in July.
Sector-wise, telecom came up trumps with $4,854 million investment.
The other top funded sectors were enterprise infrastructure, which raised $236.2 million worth of investments, consumer sector (inclusive of those in online and tech-enabled business-to-consumer space): $183.47 million, education technology: $164.95 million, real estate and construction technology: $78.1 million, retail: $57.42 million and media and entertainment: $53.90 million.
Sectors that attracted the least investment in July included health tech ($21.74 million), automobile tech ($18.13 million), finance tech ($18.04 million), and travel and hospitality tech ($9.88 million). Logistics tech and life sciences, in fact, attracted no funding in July, it added.
Top funded startups
More than 60 startups raised funds in July 2020. Among these, early-stage startups – 44 of them, took away a bulk of investor money. Here are the top 7 in terms of investments garnered during the month
Zolo – The real estate startup bagged $56,000,000 in the latest round from investors.
Zolo provides fully managed co-living spaces. Valued at more than $100 mn, it is India’s fastest-moving technology startup in the co-living spaces. With an aim to provide a completely hassle-free long term living experience to working professionals as well as students, the company’s living spaces offer all kinds of basic and luxury living amenities. It’s the biggest USP for a resident comes from a vibrant residential community, omnichannel platform, top-notch services.
Founded by alumni of IIM, IIT, AIIMS, ISB in 2015, Zolo is currently present in 10 cities – Bangalore, Coimbatore, Pune, Kota, Noida, Gurugram, Hyderabad, Mumbai and Chennai and fast expanding to other geographies. They are at a team size of 500+. Serving approximately 16000-20000 customers daily as we speak, the company has aggressive growth plans of catering to around 50000 by the year-end.
Edtech startup Toppr raises $46,880,000 in series D led by foundation Holdings
Toppr, a test preparation platform designed to support students preparing for various entrance exams in India. It offers learning programs and focuses on school curriculum and test preparation for engineering and medical entrance exams. The Company’s online platform gives access to comprehensive practice and test package which helps students to prepare for IIT JEE, PMT, school boards, and other competitive exams in India.
Equipped with fresh funds, Toppr wants to widen its geographical footprint, especially in Tier II and III cities where the scope for edtech is very high.
“So far, we have done a great job on the product side and grown without spending much. Distribution of the product is the next phase,”. “But, the company is focused entirely on India, and not eager to go international.”
Zeeshan, the co-founder of the company stresses the opportunities offered by non-urban India, where “access to coaching” is limited. And therefore, the demand is high.
Zetwerk – The manufacturing and supplier startup bagged $20,754,700 from investors.
Zetwerk, the online marketplace, connects buyers and suppliers for manufacturing jobs. The online marketplace which connects large manufacturing companies with vendors and suppliers for customized products that are used as components of industrial machines and equipment. The company sells items like crane parts, doors, machine chassis, and ladders, as well as services businesses in fabrication, machining, casting, and forging.
Zetwerk provides collaboration tools to both buyers and suppliers in order to streamline their interactions and execution tools to fulfill the orders easily as well as schedules to host a 3rd party apps and services marketplace to fulfill other customer needs. The company’s marketplace offers access to the capacity of a nationwide network of manufacturing facilities to get products manufactured for any budget or timelines, enabling businesses to procure custom products and machine parts and suppliers to obtain more orders and grow their revenues.
Commenting on how the coronavirus pandemic has impacted Zetwerk, Acharya said that the startup works across multiple industries, some of which are still growing. The startup will deploy fresh capital to fund its international expansion and launch new categories.
BulBul – The social commerce startup bagged $8,700,000 in the latest round from investors.
Bulbul is an online shopping app where customers can watch hosts present their products live – just like in a physical store. You can ask questions about the product on the app, place your order, and pay – all on one platform.
In future, the company wants to expand its reach to the home learning market and pre-schools around the world. Besides, the company also wants to popularise the regional stories from across India by presenting them in a fresh manner with animation.
Blu Smart – Ride-hailing startup received $5,000,000 in the latest round from
BluSmart is India’s first all-electric shared mobility platform to provide a responsible mobility solution to the people. It was started in October 2018 by Anmol Singh Jaggi and Punit K Goyal. The firm operates a fleet of 320+ electric cars in Delhi NCR and Mumbai. The company ensures no denial and no surge pricing for the rider. So far BluSmart has completed 1,75,000 all-electric trips and has covered 4.75 million clean km since launch. The company aims to provide reliable, affordable, and sustainable mobility to consumers and improve the quality of life in megacities of India.
The company is currently concentrating only on the Delhi NCR market, with the main focus on Gurgaon micro-market up till the Delhi International Airport. BluSmart plans to expand to the entire Delhi NCR over the course of 2020 and 2021. The company’s second market of focus is Mumbai, where they have started piloting with 26 cars and intend to go deep from 2021 onwards.