EXCLUSIVE: Start-up investments in 2021 touch $34 billion, see 67% jump

This year undoubtedly has been all about India’s digital upstarts. As per data sourced from Venture Intelligence, new-age digital start-ups have bagged a record $32.8 billion investments in 2021, as of December 17. This is excluding the $1.2 billion funds raise by various start-ups on December 20 and 21, which when included takes the total capital investments to $34 billion.

This data from Venture Intelligence study has not taken into consideration the $3.6 billion raised by e-commerce giant Flipkart in July, which was the homegrown e-tailer's first capital raise since being bought over by retail behemoth Walmart in 2018.

The investments into the India’s start-up ecosystem in 2020 stood at $11.2 billion, whereas in 2019 it was $13 billion. The deal volume, according to the Venture Intelligence, has increased by almost 22 per cent as of December 17,2021. VI data also showed that the number of deals in 2021 was 1009 compared to 788 in 2020 and 879 deals in 2019.

Experts argue that what has worked towards Indian start-ups' benefit is the present favourable regulatory environment which has not only promoted private capital investments into new-age digital companies, but has also eased the compliance burdens when it comes to listing on domestic stock exchanges. But these factors aren't enough. What has also contributed is the regulatory ambiguity presently prevalent in China, especially after its recent tougher stance that its government has taken on foreign investments.

The pandemic-induced digitisation of enterprises and work from home culture have also strengthened the investors sentiments when it comes to India’s digital economy both as a market as well as providing global solutions.

Top 5 funding rounds of 2021:

The Venture Intelligence report stated that Bengaluru-headquartered edtech decacorn Byju’s bagged the largest investor round at $1.39 billion, which saw the participation of Footpath Ventures, GSV Ventures, ADQ, Owl Ventures, B Capital Group, Prosus Ventures, Silver Lake, and Blackstone among others.

This was followed by gaming unicorn Dream11’s $840 million capital raise from RedBird Capital Partners, Footpath Ventures, D1 Capital Partners, Falcon Edge Capital, DST Global, TPG Capital, Tiger Global.

Food delivery giant Swiggy’s $800 million funding round was the third largest VC-led capital raise in the start-up ecosystem in 2021 in which Think Investments, Wellington Management, Prosus Ventures, Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Accel India, GIC, Goldman Sachs and others participated.

Mumbai-based edtech firm, Eruditus bagged $650 million in August from investors such as Accel USA, CPPIB, and SoftBank Corp.

The fifth biggest funding round was that of social commerce unicorn, Meesho, which raised $645 million from Footpath Ventures, Good Capital, B Capital Group, Prosus Ventures, Trifecta Capital, CapitalG, Fidelity India, SoftBank Corp, and Symphony International Holdings and others.

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