What’s hot, what’s not, and why: VC funding in India this year (Infographic)

Startups and investors the world over have finally shaken off the dreaded funding winter, if the venture capital deals announced in the third quarter of 2017 are anything to go by.

Globally, 2,362 venture capital deals were revealed in Q3 2017 with an aggregate deal value of US$49 billion, according to alternative assets intelligence firm Preqin. A lion’s share of that money went into Asian tech companies.

• Southeast Asia’s ride-hailing giant Grab nabbed a whopping US$2 billion deal with China’s Didi Chuxing and other investors.
• China’s Toutiao grabbed another US$2 billion from General Atlantic.
• SoftBank invested US$1.5 billion in India’s Flipkart, just a few months after Tencent, Microsoft, and eBay poured around US$1.4 billion into the ecommerce company.
• Ola too raised around US$1.1 billion from SoftBank and other investors.
• So did Paytm, around US$1.4 billion from SoftBank.

The total funding raised by Indian tech companies in the first nine months of 2017 crossed US$9.6 billion across 574 deals, thanks to the three huge checks from SoftBank.

But what about early-stage funding, the better indicator of what verticals are clocking maximum action for tech startups? Tech in Asia asked LetsVenture, an Indian online platform connecting startups to investors.

Original illustration by Kathrinna Rakhmavika; design updated by Matahari Indonesia of Tech in Asia

LetsVenture tracked around 1,000 young Indian startups trying to raise funding in the last six months and spotted a 25 percent drop in the number of early-stage financing deals in Q3 2017 compared to Q2. But the average early-stage deal size in Q3 was US$680,000, a 20 percent jump from US$560,000 last quarter.

LetsVenture tracked all early-stage deals ranging from US$150,000 to US$1.5 million in Q2 and Q3 2017 in the report shared exclusively with Tech in Asia.

Not surprisingly, the hottest verticals – in other words, sectors that saw maximum number of deals – were healthcare and fintech. Together, healthcare and fintech companies bagged 19 percent of the early-stage funding deals in India. Enterprise software came third with 8.8 percent but with average ticket size of US$800,000, higher than US$743,000 for healthcare startups and US$551,000 for fintech.

Image credit: LetsVenture. Green graph tracks early stage funding for Q3 2017 and gray graph depicts Q2 data.

What’s new

Tech startups with enterprise software products saw much more interest from investors in Q3 compared to Q2. While the sector was in sixth place in number of deals in Q2, it was number 1 in Q3.

The startups that scored the biggest checks in this vertical are:

• Innovapptive with US$1.5 million from Hyderabad Angels
• Vidooly with US$1.4 million from Gujarat Venture Finance and Times Internet
• Goodbox with US$1 million from Nexus Venture Partners and angel investor Mekin Maheshwari.

Money power

Health is wealth

Food for thought