Reports of winter in India are greatly exaggerated: 2016 sees more deals, higher funding

Photo credit: Pixabay.

We keep hearing talk of a funding squeeze in India after the bonanza of the past two years. But the data paints a different picture.

The first half of this year had 654 deals compared to the 279 deals in the same period last year, according to Xeler8, a startup data cruncher based in the US and India. In other words, there’s been a 2.4x growth in deal numbers.

Deal size is much higher too. The first half of 2016 saw US$3.2 billion invested in startups, compared to US$1.8 billion in H1 2015, representing a 76 percent growth.

Perceptions of a slowdown were triggered by deal activity getting muted towards the end of 2015 which carried over to the start of this year. But it appears to have picked up smartly.

This year has seen more deals than in the second half of 2015 too. There were 536 of them from July to December last year compared to the 654 in H1 2016.

Deal volume has come down a bit, however, compared to the second half of 2015 which had mega deals for Flipkart, Snapdeal, Paytm, and Ola. This year’s had its fair share of US$100 million-plus deals in Shopclues, CarTrade, Oyo Rooms, Snapdeal, Jabong, Fractal Analytics, and Big Basket – but not the US$500 million-plus deals we saw last year.

Source: Xeler8.

Source: Xeler8.

See: Thrillers to tragedies: India’s failed ecommerce pioneer on what ails Flipkart, Snapdeal

Foodtech is out, fintech is in

India’s unicorns haven’t had much love this year – especially Flipkart which is reportedly struggling to raise a big round to keep up with Amazon. Still, the total funding of US$3.2 billion in H1 2016 is not that much lower than the US$3.9 billion invested in the July-December period of 2015.

Healthtech with 67 deals, fintech with 58 deals, and SaaS (software-as-a-service) with 51 deals are the new darlings.