2015 in review: India’s funding pattern in 5 graphs and what you can learn from it

The funding bonanza that started last year in India has continued in 2015, with over US$7.7 billion invested in tech startups, according to data from the Tech in Asia research team. What’s more encouraging is a sharp rise in series A and B funding rounds, because it shows that an increasing number of startups are able to attract follow-on funding.

The rise in total funding

Funding figures are in millions of US dollars. Data was compiled by Hana Nguyen of Tech in Asia’s research team.

Startups are at their most vulnerable at the early stage. If they’re unable to show proof of concept and hit the growth track within 18 months or so, VCs are likely to drop them like hot potatoes. Last week, we profiled 11 startups that were forced to shut down in 2015 despite the promise they showed.

Now we look at the bright side. Tech in Asia data shows that series A funding rose by two-and-a-half times in 2015 compared to the previous year. But it was in series B funding that we saw the biggest surge as it tripled to cross US$1 billion.

The boom year of 2014 was dominated by mega funding rounds in India’s leading ecommerce marketplaces of Flipkart and Snapdeal following the entry of global rival Amazon the previous year. Late stage investments in Flipkart, Snapdeal, and taxi app Ola accounted for half of the US$6.2 billion funding last year.

2015 has been more eclectic, with nearly US$3 billion going into the seed, and series A, B, and C rounds. That is a sign of a maturing ecosystem with a broader range of startups in multiple verticals entering the growth stage.

Surge in series A and series B funding

Funding figures are in millions of US dollars. Data was compiled by Hana Nguyen of Tech in Asia’s research team.

Ecommerce took more than half of the total funding this year just like in 2014. The difference in 2015 is that verticals like furniture, fashion, and even eyewear got into the big league along with the horizontal players.

See: 15 top-funded ecommerce startups in 2015 – with a few surprises

Ecommerce enablers, especially in logistics and payments, saw the biggest spikes in funding this year as their value propositions became clear. Relaxation of government norms for digital wallets and payment banks also gave a push to startups in these spaces with huge domestic markets. Analytics too got a big push, partly due to the rise of ecommerce.

Funding figures are in millions of US dollars. Data was compiled by Hana Nguyen of Tech in Asia’s research team.

Consumer internet businesses continued to rise with India overtaking the US this month with over 400 million internet users, second only to China’s number. The lifestyle segment, including beauty, fitness, and wellness, in particular attracted attention with nearly a billion dollars in investment.