The latest data from Tracxn has showed that the total money infused into Indian startups increased by 25 per cent to $10.9 billion (approx ₹77,460 crore) in the first nine months of 2019 as compared to the same period in the previous year, even as the total number of deals fell by 26 per cent to 937 transactions, cited TOI.
The data indicates that the boom in financing is being led by mid and late-stage rounds over $50 million, and is now trickling down to even early-stage transactions.
“Right now all 3 Vs of a “bubble” at play in the technology investing world – volume (number of investments), value (valuations vs fundamentals) & velocity (time to an investment decision and/or markups between rounds),” said Avnish Bajaj, MD at Matrix Partners India, early backer of companies like Ola and Quikr.
“Until recently only volume and value were at play, but velocity is also at play now as investors are being forced to take decisions in a few days. And typically the correlation between high velocity and bad judgement is high,” Bajaj further said.
Several startups such as Zomato, Swiggy, Meesho, Open, Udaan, CareStack, among many others have taken bulk of capital from ace investors, and eventually, seen a significant jump in their valuation in a matter of months.