2017

INDIAN TECH STARTUP

FUNDING REPORT

2017 ANNUAL REPORT

TABLE OF CONTENT

Foreword 1
From The Editor’s Desk 3
Scope Of The Report 5
Introduction To The Report 5
Key Highlights 7
Executive Summary 8
Report Overview 11
Stagewise Breakdown 13
Business Model Breakdown 38
Sectorwise Breakdown 42
Geography Breakdown 86
Investor Breakdown 106
M&A Overview 121
Corporate Startup Fraternisation 122
Startup India Overview 123
Rise Of Accelerators And Incubators 124
The Indian Unicorns 125
The Soonicorns 128
India In The Global Economy 131
Predictions For 2018 135
Bibliography 136
Glossary 137
 FOREWORD
TV Mohandas Pai

As one of the largest centers of startup activity in the world, India has seen a unique
set of advantages converge over the last seven years - a strong concentration of
high-quality technical talent, an immense ecosystem of software development and
services corporations, many central and state policy initiatives such as Startup
India lending infrastructural support to young companies, increasing ease of capital
flows into the country, a more favourable academic attitude towards
entrepreneurship and risk-taking, and, of course, many interesting challenges and
problems to solve for. It is not surprising, therefore, that India has attracted
increasing amounts of capital from foreign investors and that this has only increased
in 2017.

With over $10 Bn invested in India-focused ventures this year, we can now say
that the capital advantage is also locking into place to allow these companies to
pursue important value propositions at scale. Companies with large footprints in
the country are now being rewarded for having focused on Indian opportunities,
and the largest investors in the world are turning towards these companies to
tap into the India growth story - a story that will dominate the world’s economic
narrative for the next decade.

Much more needs to be done to help these ventures continue to generate and
reap value in the country, and we are seeing strong progress on this front already.
Policy initiatives from the government will need to be accelerated in 2018, and the
SME empowerment motivations will lend new confidence to startups and investors
in India. However, we will need many more new regulations and guidelines to be
announced at higher velocities so as to allow these young companies to build and
launch business models built upon the latest technological advances.

1 © 2018, Inc42 Media

 Furthermore, the role of Government in announcing large programs in education,
healthcare, infrastructure, and banking will end new stimulus and open up
markets much faster. For instance, twenty crore (200 Mn) rural Indians now have
access to broadband internet, with an additional 5 lakh (500k) WiFi hotspots
being introduced. The wave of digitally empowered citizens will continue to drive
user engagement for startups across most domains. Consumer internet
companies, in particular, will now have access to huge volumes of users in
several segments, and their challenge will be to ensure that they can prove their
value propositions clearly. In this manner, government spending must continue
to go into expanding the install base of fundamental layers of innovation, such
as the India Stack, mass insurance programs, mass training initiatives, and more
stimulus for job creation.

With so many vectors of momentum in the Indian startup ecosystem, it is vital

that all stakeholders in the Indian startup ecosystem, from founders and team
members to investors and corporations, continue to operate on a base of reliable
and credible data and information. The role of companies such as Inc42 will be
most critical in helping us all come together and understand the many points of
progress and pending issues alike. Reports such as this one help us all study, at
different levels of granularity, how much is happening in this vibrant and
dynamic ecosystem. I am very happy to witness good work like this, and I am sure
this report will help all ecosystem stakeholders add additional dimensionality to
their analysis and decision making for 2018.

TV Mohandas Pai
Chairman, Aarin Capital

2 © 2018, Inc42 Media

 India is rapidly raising its name in the charts of global startup ecosystem and the
year 2017 marked a number of achievements to count by. Christened as the fourth
fastest growing economies in the world in 2017 by the World Bank, India’s economy
is projected to grow at 7.3% in 2018, thus making it emerge as the fastest growing
economy in the world once again.

For being home to over 20,000+ startups, counted among the top three countries in
the world for the number of startups that have been developed from the national
and transnational level and for forging international startup partnerships with
countries like Israel and Portugal – India is currently at a unique moment in history
when the right conditions have converged to produce an invaluable opportunity for
entrepreneurs and investors to tap into the massive Indian Digital Economy which is
poised to further grow into a $1 Tn economy by 2022.

Coming to the point of the startup impact in India, it’s worth noting that by 2020,
startups will be solving the severe under-employment problem faced by India. The
startups will be employing over 250,000 people which is an increase from
the current 80,000, according to NASSCOM. Further, government initiatives such as
Make in India, Digital India, Startup India and the Smart Cities Project have created
additional avenues for jobs. However, there is still a long road ahead. So far, many
of the government schemes have fallen short of achieving the expected results; be it
job creation, startup investment or providing tax benefits to the startups. Although
the startup scenario may be looking up on the global charts, the industry as such
continues to face many roadblocks. As a result, startups have been compelled to
either shutdown or adopt massive layoffs due to their inability to generate revenues,
ultimately resulting in a dearth of employment.

3 © 2018, Inc42 Media

 Further, despite being a year into effect, the $157.70 Mn (INR 10,000 Cr) Fund of
Funds for Startups (FFS) has only aided 75 startups so far while only 6,186 startups
have been able to gain the ‘recognised status’ extended by the Department of
Industrial Policy and Promotion (DIPP). Even on the tax front, the startups are still
being haunted by the lack of clarity on the Angel Tax.

Although a lot has to be done to encourage the Indian startup ecosystem, there are
also multiple factors that may be counted as conducive for the startups such as the
entry of global giants in the Indian market, the creation of new investment firms,
increase in the tech and non-tech businesses, Indian corporates showing interest in
the burgeoning startup ecosystem and steps implemented by the government at the
policy and infrastructure level.

In 2017, India leaped over 30 positions in the World Bank’s ‘ease of doing businests’
rankings, it is now ranked 100 in the list of 190 countries and this was made
possible due to the major reforms and policies introduced and implemented
during PM Modi’s governance which has directly impacted the burgeoning
startup ecosystem of the country at the centre and state level.

Since the announcement of Startup India Action Plan, over 15+ states have
already announced their startup policies with a host of initiatives to boot up the
startup ecosystem of the respective states. In a bid to keep a check on how these
states are performing, the Department of Industrial Policy and Promotion (DIPP)
recently introduced the feedback mechanism as well, where startup ecosystem
stakeholders will rank the states and union territories on the basis of the success
achieved in implementing their startup policies, thereby making this a step worth
applauding.

As far as funding is concerned, our research shows that the Indian tech startup
ecosystem has already become an apple of the global investors’ eyes. With
leaders like SoftBank Group signing big cheques worth billion dollars from its
Vision Fund; big ticket investments are also pouring in from different corners
of the world including China, Japan and the Silicon Valley.

Pooja Sareen
Editor-In-Chief, Co-Founder
Inc42 Media

4 © 2018, Inc42 Media DATALABS

 SCOPE OF THE REPORT
Funding has been counted as an important aspect of a startup’s growth. The rise or
fall in funding always becomes a key discussion point while evaluating the potential
of an ecosystem.

The year 2017 has been terrific for the Indian tech startup ecosystem and it has
had both positive and negative lessons for the startups. Though the country has
witnessed a steep decline in the number of startups launched in 2017, the funding
numbers and the road to profitability shown by a large number of startups is
highly commendable.

With this report, we aim to inform our audience as well as provide a thorough
analysis of the Indian startup ecosystem. The report will include an overview
of the startup funding and M&A activity in India and study the trends over the
last four years.

Apart from the analysis and the trends, the report will dive deeper to
critically examine the top sectors that are currently dominating the funding
charts; besides, focussing on the various emerging technologies making their
way into the Indian startup ecosystem. We will also be taking a look at the
different types of startup investors that have been leading the funding game in
the Indian tech startup ecosystem since 2014.

The report shall also probe into the state of the top three startup hubs in India
(and showcase their rankings), with a focus also on the state of Tier II and Tier III
cities that have started getting visibility on the Indian startup map. We will also
broadly bring forth the various factors and discuss the bodies (both government
and private) that are supporting the health of the Indian startup ecosystem.

This report is thus aimed at showcasing the milestones achieved by the

Indian startup ecosystem in 2017. It will discuss the catalysts behind
these milestones and what the future might look like. The report will
also elaborate on the upcoming challenges that the Indian startups might
face and the emerging investor fraternities in the startup ecosystem. These
factors and achievements have eventually made way for the dynamic India
in progress.

5 © 2018, Inc42 Media DATALABS

 INTRODUCTION
There is no doubt that the year 2017 can be termed as the ‘Era of SoftBank India
Invasion’. The Japanese multinational telecommunications corporation, SoftBank
led by Masayoshi Son, one of the most influential figures in the tech ecosystem
across the globe, was seen capturing major stakes in unicorns in India and beyond.

The year 2017 witnessed a series of billion dollar fundings raised by the Indian
consumer companies like Flipkart (approx. $4 Bn), Paytm ($1.4 Bn), Ola ($1.1 Bn)
and most of these fundings were led by master strategist Masayoshi Son.

Interestingly, of the total $13.5 Bn invested in the Indian tech startup ecosystem
in 2017, about $4 Bn was invested by SoftBank and the top five fundings of the
year consumed about $8 Bn of the total amount. While some of the unicorns
were fortunate enough to continue to be on track, one of the unicorns had a
near-death experience too. And this was Snapdeal – once valued at $6.5 Bn,
the ecommerce marketplace’s valuation dropped down to under $1 Bn while
negotiating a merger deal with Flipkart – which apparently fell through after
months of negotiations.

On one hand, there were the ones who rose to the pinnacle and on the other, there
were the ones who turned into ashes. Then came the ones, who rose from the ashes.
An apt example is the foodtech giant Zomato, which had a terrible time two years
back. In 2017, Zomato announced that it had attained profitability throughout its 24
operating countries across all its businesses.

Then came the ‘Soonicorns’ (companies with potential to become unicorns). Oyo’s
valuation touched $850-900 Mn in 2017 and is expected to enter the unicorn club
soon. Then, there is Swiggy which is all set to raise a massive funding round at
a pre-money valuation of $650-700 Mn with investors like SoftBank being in the
queue for investing into this foodtech giant. If all goes well for Swiggy, we will
soon be seeing it in the unicorn club along with companies like Delhivery and
Rivigo (logistics startup), Practo (healthtech startup), Freshworks (SaaS startup)
and Lenskart (ecommerce firm) which have shown immense potential and
jaw-breaking growth in 2017.

Coming back to funding, there was an overall 7% fall in deals and 189% rise in
funding amount being raised in 2017 in comparison to 2016. As far as M&As are
concerned, around 133 deals were reported in 2017 which is a meagre 14% fall
when compared to 2016.

6 © 2018, Inc42 Media DATALABS

KEY HIGHLIGHTS
KEY HIGHLIGHTS
2 $13.5 Bn
Startups Funded Total Funding
Each Day Raised

BENGALURU FINTECH
City With Maximum Sector With Maximum
Number Of Deals Number Of Deals

34 885
Total Number Of Total Number
New Funds Announced Of Deals

133 1078
Total Number Of Total Number Of
M&As Reported Investors Participated

7 © 2018, Inc42 Media DATALABS

EXECUTIVE SUMMARY
Steep Decline in Seed Funding
The number of deals fell by 16.5% and 2% in comparison
to 2015 and 2016 respectively. The total funding amount
also witnessed a downfall by 29% and 21% in comparison
to 2015 and 2016 respectively.

Series A Crunch Becomes Evident

In comparison to 2015, there was a decline of over 35% in
Series A deals in 2017. Of the startups that received seed
funding in 2014 and 2015, about 22% and 12%,
respectively, went on to raise Series A.

2% Deals Took 75% Of The Funding

An enormous funding vacuum was observed in startup
investments in 2017, with most of the funding going to
just 2% of all startups.

Fintech Continues To Shine

2017 saw a massive rise of 280% in total funding in
comparison to 2016. Even after disregarding the $1.4 Bn
investment in Paytm, total funding grew by 105%.

A Shift Towards B2B Startups

B2B startups witnessed a 11% and 9% rise in the total
deals in comparison to 2016 and 2015 respectively

8 © 2018, Inc42 Media DATALABS

EXECUTIVE SUMMARY
SaaS Funding Dropped By 88%
SaaS startup investments saw a significant slowdown in
2017 with a drop of 48% in deals and 90% in funding.

Tier II/Tier III Funding Drops Again

There has been a significant fall in funding deals by 46% for
Tier II and Tier III cities, however, the average ticket size
increased by 100%.

Angel Participation Increased In

Growth Stage Deals
Over 75 angel investors participated in 83 deals beyond
seed and bridge funding rounds.

Fintech Continues To Shine

Besides the significant rise in deals with corporate
participation, 2017 saw the rise of corporate accelerator
and incubator programmes.

Overseas Investors Go Gaga About

The Indian Opportunity
Apart from existing players like Softbank, Naspers and
Tencent, several new international investors made their
first ever deals in India this year.

9 © 2018, Inc42 Media DATALABS

 Manufacturer
Professional Wellness
Community Products Solution
Luxury
Augmented E-Learning Technology
Network Delivery Marketing
Product Enabler

Marketplace
Agrtech
Learning Media
Epharmacy
Furniture Health Goods

Services
Cold
Security Virtual
Co-Working Analytics Parking

Platform Niche Logistics Beauty

Lending Food
Solutions
Payment

Taxi Fashion Hotel Chatbot

Fintech Edtech Iot

Gaming Water
O2O Sme
Big
Reality B2B Space

Healthcare
Software
Retail
Car Cleantech Repair
Home
Edutech Appointment

Online
Recommerce Cars

Discovery Ai Booking
Mobile Chain

Social
Consumertech
Aggregator

Ecommerce
Cyber Budget Supply
Treatment Real
Deeptech
Content

Enterprise
Wholesale
Bigdata Cab Bike Consumer For
Data Sports
Digital Automation
Lifestyle

HealthtechTransport
Tea Used
Energy Travel Juice

App Fitness Defence

And Saas Artificial

Hrtech
Cloud Ticket
Development

Education
Seller
Farmers
Elearning
Hyperlocal Tech Payments Brand Hiring
Sharing

Video
Finanace
Doctor
Intelligence Deep

Startup
Service Management Meditech
Automobile
Finance Eastate
Rental
Provider Grocery
Applications Agritech Estate
Micro
Care
Advertising Servicing
Computer
Insurance Foodtech
Enterprise-Ai Biotech
Ambulance Pharmacy

10 © 2018, Inc42 Media DATALABS

 INDIAN TECH
STARTUP FUNDING OVERVIEW
Indian tech startups raised a total of $13.5 Bn funding in 2017 across 885 deals.
The funding amount is almost 3x than what it was in 2016, while deals were less
by 7.14%. However, if we remove the top five fundings of 2017 including the near
billion dollar cheques infused in the Indian consumer internet companies – Flipkart
($4 Bn across two rounds), Paytm ($1.4 Bn), Ola ($1.1 Bn) and Phonepe ($500 Mn),
the funding amount falls down to $6.46 Bn which is technically a rise of 38% in
comparison to the funding raised in 2016. Highlighting the fact that there has been
a significant uptake in the Indian tech startup funding scenario.

INDIAN TECH STARTUP FUNDING: YoY DEALS AND FUNDING

$14B 1,000

$12B 857
WITH OUTLIERS

$10B 714
Amount

Startups
Funding

$8B 571

TotalofDeals
Funding

$6B 429
Total

Number
Total

$4B 286

$2B 143

0 0
2014 2015 2016 2017

Total Funding
Total Funding Amount Total
NumberDeals
of Startups

$6B 1,000

$5B 833
WITHOUT OUTLIERS

$4B 667
Funding

Deals
TotalofDeals
TotalAmount

$3B 500
Funding

Number

$2B 333

$1B 167

0 0
2014 2015 2016 2017

Total Funding
Funding Amount Total
NumberDeals
of Deals

11 © 2018, Inc42 Media DATALABS

 A quick look at the startup funding data from 2014 reveals that while in 2017, the total
funding amount was much larger than the preceding years, however, 2016 took the
lead when it comes to deals. The year observed 953 deals.

Since 2014, Indian tech startups have raised over $32.2 Bn across 3,048 deals.
Interestingly, out of the total funding, 42% of the funding was raised in 2017
alone. A further look at the funding trends highlights the fact that 2016 has
had the maximum number of deals which stood at 953, however, in terms
of funding amount being raised, 2016 wasn’t a good year for the Indian tech
startups resulting in a fall of 47% and 6% in funding amount in comparison
to preceding years i.e. 2015 and 2014 respectively.

Another imperative finding which we got through this data is that there was a
significant dip in the amount per deal (avg. ticket size) in 2015 and 2016,
however in 2017, things came slightly closer to what it was in 2014. While,
in 2014, the average amount per deal was $15.8 Mn, it fell to $10.2 Mn and
$4.9 Mn in 2015 and 2016 respectively. However, in 2017, the average amount
per deal touched $15.2 Mn, which is still less than 2014. But the changes do
highlight that the market is moving towards a correction.

INDIAN TECH STARTUP FUNDING: YoY AVERAGE DEAL SIZE

$25M

$20M
Average Deal Size

$15M

$10M

$5M

0
2014 2015 2016 2017

With Outliers
With outlier Without
Without Outlier Outliers

12 © 2018, Inc42 Media DATALABS

 STAGEWISE BREAKDOWN
Continuing the age-long trend, seed funding was once again on the top when it came
to the number of deals. Over $157 Mn was invested across 507 deals in seed funding
in 2017. While as far as growth stage is concerned, it witnessed 194 deals with $1.8 Bn
being invested.

A quick look at the funding data from 2014-2017, asserts that the most significant fall
in the funding activity has been witnessed at the seed and early stage itself. In fact,
later rounds in the development of a startup such as – growth and late stage, have
been growing steadily.

However, the number of deals made quite a decent jump at the growth stage and
also at the late stage in 2017. As far as funding amount is concerned, it stood at
$1.8 Bn and $11.5 Bn for growth and late stage respectively for the year 2017.

STAGEWISE FUNDING: YoY DEALS AND FUNDING

600

400
TOTAL DEALS

200

0
2014 2015 2016 2017

BridgeFunding
Bridge Funding GrowthFunding
Growth Stage Late Stage
Late Stage

SeedFunding
Seed Funding

2017
TOTAL FUNDING

2016

2015

2014

0 $2B $4B $6B $8B $10B $12B

Bridge Funding
Bridge Funding Growth Stage
Growth Funding LateLate
Stage
Stage SeedSeed
Funding
Funding

13 © 2018, Inc42 Media

DATALABS
SEED FUNDING 2017
STATS

507
Total Deals

$500,000
Average
Deal Size

$157 Mn
Total Funding

BENGALURU
City With The
Maximum Deals

HEALTHTECH B2B/B2C
Sector With The Business Models With
Maximum Deals The Maximum Deals

*We consider Pre-Seed, Seed & Angel rounds under Seed Stage Funding.

14 © 2018, Inc42 Media DATALABS

 Surprisingly, the year 2017 didn’t fare well for seed funding in India and reported a
three-year low. As per Inc42 Datalabs, $157 Mn was invested across 507 seed funding
deals in 2017. Barring 2017, seed funding witnessed an uptick in the number of deals
since 2014. It grew by 960% in 2015 and 167% in 2016 in comparison to the previous
years but 2017 saw a fall by 165%.

“Since 2014, over $594 Mn has been invested across 1,682 seed stage
deals”

Starting from 49 deals in 2014, the seed funding witnessed a huge jump in 2015 and
2016. The number of deals stood at 519 and 607 in 2015 and 2016 respectively. As
far as the total funding amount is concerned, it stood at $14 Mn in 2014 and grew
significantly in 2015 and 2016 with $201 Mn and $221 Mn being invested respectively.

SEED FUNDING: YoY DEALS AND FUNDING

$200M 542

$150M 406
Deals of Deals
Funding Amount
Total Funding

TotalNumber

$100M 271

$50M 135

0 0
2014 2015 2016 2017

Total Funding
Funding Amount
Total Deals
Number of Deals

15 © 2018, Inc42 Media DATALABS

 SEED FUNDING: MoM DEALS AND FUNDING

Another thing to be noted here is the fact that there has been a significant drop in
the average ticket size in seed funding over the years. Starting from $500K in 2014,
it grew to $650K and $675K in 2015 and 2016 respectively. However, it fell back to
$500K in 2017, the same number as it was in 2014. Thereby highlighting the fact that
2017 was not a good year for seed funding in India, since, from deals to amount to
average ticket size, everything witnessed a decline.

In terms of the best performing quarters for 2017, the clear winner was Q3 2017.
The period July to September witnessed the maximum number of deals i.e. 183
(the majority of deals were part of ELEVATE 100) with $28 Mn being invested. In
terms of funding amount, Q1 (January to March) had witnessed an infusion of $57.8
Mn in investments. This was followed by Q2 (April to June) which witnessed over
100 deals with an investment of $450 Mn.

In terms of months, August 2017 witnessed the maximum number of deals followed
by January. While in August the number of deals was 135, and in January it was 60 for
the seed funding stage.

$25M 135

$20M 108

$15M 81
Funding

Deals
of Deals
Amount

Total
Total

$10M 54
Funding

Number

$5M 27

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Total Funding
Funding Amount Total Deals
Number of Deals

16 © 2018, Inc42 Media DATALABS

 During the years 2015-2016, there were a couple of factors which led to a
massive rise in seed funding in India. Few of these were – first, the rise of
angel funding platforms and networks; second, participation of VCs in angel
funding and lastly, the rise of tourist angels (a term coined by Sanjay Mehta).

REASONS FOR FALL IN SEED FUNDING IN 2017

Lesser Number Of Startups Being Launched: The fall in seed funding or early stage
funding can be directly linked to the drop in the number of new startups being
launched in 2017, leading to a shortage of deals. Reportedly, just 1,000 new startups
were launched in 2017 in comparison to 1,400 startups which came up in 2016.

Fall Of VC Participation In Seed Funding: During 2014-2016, Indiasawincreased

VC participation at the seed stage, however, the year 2017 saw andecline. This
could be attributed to either the lack of good deals or on account of caution
being exercised by the VCs in investing at the early stage. In 2016, 46% of
all the VCs, participated in funding in the seed funding deals, while in 2017,
this number came down to 38%.

Entry And Exit Of Tourist Angels: During our analysis, we also found that a
large number of the deals which were cracked during 2015-2016 saw participation
of the new angel investors who came to cash in on the startup opportunity but
many of them burnt their hands and thus, stepped back after betting on one or
two startups. This led to a significant fall in seed funding in 2017. Since 2014, out of
the total number of angels i.e. 1,500, over 1,356 (90%) have not invested in more
than two deals.

Fall Of Consumer Apps: The seed funding in 2015-2016 was driven by the consumer
internet and services startups. However, due to a fall of consumer services
(hyperlocal) as a sector, now investors have moved away and are instead putting
their bets on B2B businesses, a segment which cannot accommodate a large
number of startups than the consumer segment could.

Fall Of ‘Concept’ Funding: The period of 2014-2016 had also witnessed a lot of
‘concept’ money being raised by the Indian tech startups which ended in 2017. By
concept money, we mean, the money raised for products which are still in the idea
phase. The funding, during the said years, was driven by the fundamental shift
to the mobile sector (consumer services and delivery), and the spray and pray
approach.

17 © 2018, Inc42 Media DATALABS

 SEED FUNDING:
YoY 5 POINT SUMMARY

$
Maximum : $ 1.6M Maximum : $ 7.5M
Q3 : $ 1M Q3 : $ 1M
Mean : $ 493.14K Mean : $ 644.85K
$ Median : $ 210.5K Median : $ 350K
Q1 : $ 160K Q1 : $ 165K
Min : $ 8000 Min : $ 16K

18 © 2018, Inc42 Media DATALABS

 Maximum : $ 6.7M
Q3 : $ 1M
: $ 675.38K Maximum : $ 5.6M
Mean
Q3 : $ 750K
Median : $ 412.5K
Mean : $ 498.21K
Q1 : $ 155K
: $ 372 Median : $ 200K
Min
Q1 : $ 48.33K
Min : $ 15.5K *Data based on deals with disclosed fundings and without outliers.

19 © 2018, Inc42 Media DATALABS

BRIDGE FUNDING 2017
STATS

89
Total Deals

$1.3 Mn
Average
Deal Size

$60 Mn
Total Funding

DELHI/NCR
City With The
Maximum Deals

HYPERLOCAL B2B/B2C
Sector With The Business Models With
Maximum Deals The Maximum Deals

*We consider Pre-Series A and Pre-Series B rounds as Bridge Stage Funding.

20 © 2018, Inc42 Media DATALABS

 In India, the phenomenon of bridge funding had started gaining attention in
2014 which indeed witnessed the maximum number of deals in comparison
to the funding deals done between 2015-2017 on a yearly basis. As the name
suggests, this round of funding acts like a bridge till the startup raises its next
institutional round of funding.

The year 2014 had witnessed $52 Mn being raised at bridge funding stage across 127
deals, which constituted 41% of the total number of deals. However, the year 2015
saw a steep decline in bridge funding with just $49 Mn being raised through 51 deals.
For the years 2016 and 2017, the funding deals remained consistent with less than
10% of the total deals falling under bridge stage. Overall, $60 Mn was invested across
89 deals in 2017 at the bridge funding stage.

“Since 2014, $221 Mn has been invested across 264 bridge deals”

In 2016, the number of bridge stage funding deals stood at 97 with $60 Mn being
invested throughout the year. While in 2017, the number of deals stood at 89 with a
total investment of $60 Mn at the bridge funding stage.

BRIDGE FUNDING: YoY DEALS AND FUNDING

$60M 120

$50M 100

$40M 80
Number of Deals
Amount
Total Funding

Total Deals

$30M 60
Funding

$20M 40

$10M 20

0 0
2014 2015 2016 2017

Funding Amount
Total Funding Number of Deals
Total Deals

21 © 2018, Inc42 Media DATALABS

 BRIDGE FUNDING: MoM DEALS AND FUNDING

Another point to be noted here is the fact that while in 2014, the average ticket size
was around $650K, it has now increased to $1.3 Mn in 2017. For the preceding years,
the average ticket size stood at $1.3 Mn in 2015, and $1.1 Mn 2016. The rise of average
ticket size at bridge stage, simply, points towards the fact that, investors are now
moving away from the concept of bridge funding and funding only in a few bridge
stage startups with greater ticket size.

The quarterly breakdown of the bridge funding deals for the year 2017 reveals that
apart from Q1, the rest of the quarters had witnessed an equivalent number of deals.
The deal number stood at 24 in Q2 and 28 for Q3 and Q4. While in terms of the total
funding received, Q4 was the clear winner. The last quarter of 2017, witnessed fund
infusion of $26 Mn, this was followed by Q2 and Q3 which reported fund infusion of
about $12 Mn each.

The maximum number of deals were scored in November 2017, the deal number
stood at 13 with $9.3 Mn being invested.

$12M 12

$10M 10

$8M 8
Funding

Deals
of Deals
Amount

$6M 6
Number Total
FundingTotal

$4M 4

$2M 2

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Se

Funding Amount
Total Funding Number of Deals
Total Deals

22 © 2018, Inc42 Media DATALABS

 Before we come to an understanding of what led to the bridge funding fall, we first
need to understand what were the factors which led to the rise of bridge funding in
India.

First, Fall of Ticket Size In Seed Stage: Traditionally, before 2010, seed round on an
average used to be in the range of $400-$800K. However, in the last four years, this
range has come down to $300K-$500K.

Second, Number of Startups Raising Seed Funding Increased But Series A Didn’t:
While seed funding was at an all time high in the last few years, Series A funding
didn’t rise proportionately in comparison to the seed funding numbers. If we look at
the data, from 2014 to 2017, 6 out of 100 startups went on to raise Series A funding.

The main reason leading to this low ratio is the fact that a lot of startups working in
the same domain or offering similar products often manage to raise seed funding
and only 7-10% of these are able to score a Series A funding.

The reasons for not being able to raise the Series A round of funding is either due to
lack of healthy metrics required for the same as desired by the VC who is willing to
invest or not having enough cash to survive till Series A funding stage.

Thus, a startup goes on to raise a bridge funding round (also called as Pre Series A) to
get a financial runway till the Series A round is raise and drive better growth. These
rounds are usually led by the existing and some new investors. However, it is to be
noted that a lot of startups pull their shutters down between seed to bridge and
bridge to Series A round.

A similar phenomenon applies when a startup raises Pre Series B (raised between
Series A and Series B) funding.

However, it appears that the era of bridge funding which spiked for the first time
in 2014 was short lived. Since 2015, the fundings at bridge stage have remained
consistent and below 100 in terms of the number of deals.

23 © 2018, Inc42 Media DATALABS

 BRIDGE FUNDING:
YoY 5 POINT SUMMARY

$
Maximum : $ 6M
Q3 : $ 1.82M
Mean : $ 1.32M
Median : $ 1M
Q1 : $ 500K
$ Maximum : $ 4.5M Min : $ 200K
Q3 : $ 900K
Mean : $ 649.56K
Median : $ 300K
Q1 : $ 131.5K
Min : $ 1500
$

24 © 2018, Inc42 Media DATALABS

 Maximum : $ 4M
Q3 : $ 1.87M Maximum : $ 4M
Mean : $ 1.10M Q3 : $ 1.57M
Median : $ 700K Mean : $ 1.28M
Q1 : $ 458K Median : $ 850K
Min : $ 100K Q1 : $ 550K
Min : $ 117.4K

*Data based on deals with disclosed fundings and without outliers.

25 © 2018, Inc42 Media DATALABS

GROWTH FUNDING 2017
STATS

194
Total Deals

$11 Mn
Average
Deal Size

$1.8 Bn
Total Funding

BENGALURU
City With The
Maximum Deals

FINTECH B2B/B2C
Sector With The Business Models With
Maximum Deals The Maximum Deals

*We consider Series A and Series B rounds as Growth Stage Funding.

26 © 2018, Inc42 Media DATALABS

 Barring 2015, the total funding and deals at growth stage have been consistently
growing since 2014. In 2017, $1.8 Bn was invested across 194 deals, in comparison to
$1.57 Bn in 2016.

It was only in 2015, that the growth stage funding had crossed the $2 Bn mark with
$2.5 Bn being invested across 249 deals. However, the percentage share in the total
number of deals was just 18%. It is worth noting that, since 2014 (barring 2015),
growth stage has constituted more than 20% of the total deals. The highest being in
2015 followed by 2014 which constituted 27% and 23% of the total number of deals
respectively.

“Since 2014, over $6.3 Bn has been invested across 699 growth stage
deals”

In 2014, $474 Mn was invested across 79 deals at the growth funding stage. While 2016
had witnessed 176 deals at this stage.

GROWTH FUNDING: YoY DEALS AND FUNDING

$2.5B 250

$2B 200
of Deals
Amount

$1.5B 150
Total Funding

Total Deals
Funding

Number

$1B 100

$0.5B 50

0 0
2014 2015 2016 2017

Funding Amount
Total Funding Number of Deals
Total Deals

27 © 2018, Inc42 Media DATALABS

 GROWTH FUNDING: MoM DEALS AND FUNDING

A look at the time series graph for average ticket size, we found that for growth stage,
it has remained consistent for the period 2015-2017. In 2015, it stood at $11.4 Mn,
then it fell to $11.3 in 2015 and in 2017, it further fell down to approximately $11 Mn
which isn’t much significant of a change. The major significant jump in the average
ticket size at growth stage was made in 2015, when it grew by a significant number
from $7.7 Mn in 2014.

In terms of the best performing quarters in 2017 for the growth stage, the clear
winner was Q2. The second quarter of 2017, witnessed over 71 deals with about
$453 Mn being invested. This was followed by Q1, which saw an investment of
about $542 Mn across 48 deals. As far as last two quarters of 2017 are concerned,
Q3 and Q4 witnessed 37 and 38 deals with $450 Mn and $311 Mn being invested
respectively. In terms of months, September secured 13 deals with $87 Mn being
invested, making it the highest funded month of the year in terms of deals.

$350M 35

$300M 30

$250M 25

$200M 20
Funding

Deals
of Deals
Amount

Number Total
FundingTotal

$150M 15

$100M 10

$50M 5

0 0
7

Oc r-17
17

17

17

17

em 17

7
-1

-1

t-1

r-1
-1

r-1
y-

y-

il-

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ch

us

be

be

be

be
ar

ar

Ju
Ap

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ar

Ju
nu

ru

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to

m
M

Au
b

ce
Ja

ov
Fe

pt

De
Se

Funding Amount
Total Funding Number of Deals
Total Deals

28 © 2018, Inc42 Media DATALABS

 SERIES A VS SERIES B FUNDING

If we separate Series A funding from Series B funding – there are a couple of

interesting takeaways.

Series A Funding Falls: Starting from 180 deals in 2015, Series A funding has
been declining over the years, 117 and 105 deals were reported in 2016 and 2017
respectively. Besides the number of deals, the total funding has declined by 29%
with just $539 Mn being invested.

• The average ticket size was at $6.74 Mn in 2017

• Over 43% of the deals were for less than $5 Mn ticket size
• 12% deals were for more than 10 Mn

Series B Rise High: The Series B deals have remained consistent over the years,
starting from 68 in 2015 to 55 in 2016 and finally, 65 in 2017. However, the funding
amount in 2017 witnessed a considerable rise. Over $1.08 Bn was invested, which
was a jump by 50% in comparison to $720 Mn of 2016.

• The average ticket size was at $18 Mn was the average ticket size
• Over 55% of the deals were for less than $10 Mn ticket size
• 30% deals were for more than $15 Mn

200

180

160

140
Total Deals

120

100

80

60

40

20
2014 2015 2016 2017

Series A
Series A SeriesBB
Series

29 © 2018, Inc42 Media DATALABS

 GROWTH FUNDING:
YoY 5 POINT SUMMARY

$
Maximum : $ 75M
Q3 : $ 13.5M
Maximum : $ 33M Mean : $ 11.08M
$ Q3 : $ 9.25M Median : $ 6M
Mean : $ 7.78M Q1 : $ 3M
Median : $ 5M Min : $ 500K
$ Q1 : $ 2.47M
Min : $ 30K

30 © 2018, Inc42 Media DATALABS

 Maximum : $ 75M
Q3 : $ 14.9M
Mean : $ 10.11M
Median : $ 6M Maximum : $ 90M
Q1 : $ 3.5M : $ 10M
Q3
Min : $ 85K
Mean : $ 9.11M
Median : $ 5.15M *Data based on deals with disclosed fundings and without outliers.

Q1 : $ 3M
Min : $ 500K

31 © 2018, Inc42 Media DATALABS

 SERIES A CRUNCH BECOMES EVIDENT

Of the startups that received seed funding in 2014, about 22% went on to receive
Series A funding in 2015 and 2016, while out of the ones that raised seed funding
in 2015, only 12% received Series A funding in the consecutive years. For the 2016
seed funded startups, the number is as low as 4%. And as per this data and current
trends, it appears that Series A Crunch is a real thing in the Indian tech startup
ecosystem and is going to stay here for a while.

One of the major reasons that led to the Series A Crunch can be the growing
popularity of angel funding platforms, networks and VC participation at the seed
stage. With so many options available for raising funds at the initial stages, seed
stage funding has exploded, however, there hasn’t been any such options or
opportunities for startups to assist them in raising Series A funding. Thus, there
hasn’t been a corresponding explosion in the Series A rounds just like the
seed funding.

SERIES A FUNDING: YoY DEALS AND FUNDING

$1.2B 200

$1.1B 183

$1B 167

$0.9B 150

$0.8B 133
Amount

$0.7B 117
deals
Funding

Deals

$0.6B 100
Funding

Total of
Number
Total Total

$0.5B 83

$0.4B 67

$0.3B 50

$0.2B 33

$0.1B 17

0 0
2014 2015 2016 2017

Total Funding Amount Number of deals

Total Deals

32 © 2018, Inc42 Media DATALABS

LATE STAGE FUNDING 2017
STATS

95
Total Deals

$136 Mn
Average Deal
Size

$11.5 Bn
Total Funding

BENGALURU
City With The
Maximum Deals

FINTECH B2B/B2C
Sector With The Business Models With
Maximum Deals The Maximum Deals

*We consider Series C, Series D and later rounds as Late Stage Funding.

33 © 2018, Inc42 Media DATALABS

 Late stage funding reached new heights in 2017. The funding deals stood at 95 in 2017,
a 30% rise in comparison to 2016 which witnessed 73 deals. In terms of the amount,
late stage funding stood at $11.5 Bn in 2017, a staggering 308% rise from 2016.

Since 2014 (barring 2016), late stage funding has been rising exponentially both in
terms of the number of deals and the amount being invested. In comparison to 2014,
there has been a 70% and 160% rise in the late stage funding deals and the amount
respectively.

To be specific, the late stage funding deals stood at 56 in 2014, then grew to 77
in 2015 and fell to 73 in 2016. In terms of the amount being invested, the number
stood at an all-time low in 2016, which saw an investment of $2.8 Bn while, in
preceding years i.e. 2014 and 2015, it stood at $4.4 Bn and $6 Bn respectively.

However, if we remove the $4 Bn funding raised by Flipkart, $1.4 Bn raised by

Paytm and $1.1 Bn raised by Ola, the late stage funding amount boils down to
$5 Bn, a 14% and 79% rise in comparison to 2014 and 2016; and a 20% fall in
comparison to 2015.

LATE STAGE FUNDING: YoY DEALS AND FUNDING

$12B 100

$10B 83

$8B 67
Number of Deals
Amount
Total Funding

Total Deals

$6B 50
Funding

$4B 33

$2B 17

0 0
2014 2015 2016 2017

Funding Amount
Total Funding Number of Deals
Total Deals

Going further into this data, we found that 17 companies raised more than $100 Mn
(almost 100% gain as compared to 2016) in funding in the late stage, highlighting a
dramatic rise in the ticket size as well.

34 © 2018, Inc42 Media DATALABS

 LATE STAGE FUNDING: MoM DEALS AND FUNDING

As far as the average ticket size for this stage is concerned, it stood at $136 Mn in 2017
which is a massive rise in comparison to the past years. The number stood at the
highest in 2015 with $84 Mn and fell to almost half i.e. $47 Mn in 2016.

“Since 2014, over $24.8 Bn has been invested across 301 late stage deals”

While looking at the funding data of late stage deals for the period 2014-2017, we
found that the number of unique investors participating in the late stage funding
deals has increased dramatically. In the late stage, over 140 unique investors
participated in funding, a rise of 10% in comparison to 2016.

While, on one hand, infusion of larger capital in the late-stage startups with high
valuations has allowed startups to remain private and independent for a longer
time; on the other, it also makes us ponder whether the companies will be able
to maintain these valuations during exits too and give considerable gains to
these investors. Infusion of larger capital in late stage startups renders longevity
to entrepreneurs through an extended focus on VC metrics (e.g. growth, cohorts,
scaling, etc.), particularly as these startups will potentially go on to tap public
markets.

$3B 13

$2.5B 11

$2B 9
Funding

Deals
Deals
Amount

$1.5B 7
Total
FundingTotal

Number of

$1B 4

$0.5B 2

0 0
ua 7

ar 7

Ap 7

Ju 7
7

Au -17

em 17

7
Fe ry-1

-1

-1

-1

-1

-1

Oc r-1

-1

-1

r-1
t-
ry

ch

ril

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ly

No ber

er
Se gus

be

be
Ju
a

b
M
nu

to

m
M
br

ve

ce
Ja

pt

De

Funding Amount
Total Funding Number of Deals
Total Deals

35 © 2018, Inc42 Media DATALABS

 LATE STAGE FUNDING:
YoY 5 POINT SUMMARY

$ 200M

$ 150M

Maximum : $ 150M
Q3 : $ 54.65M
Maximum : $ 140M Mean : $ 42.98M
$ 100M Q3 : $ 45M Median : $ 30M
Mean : $ 31.28M Q1 : $ 15.4M
Median : $ 15M Min : $ 976K
Q1 : $ 8M
Min : $ 1.6M

$ 50M

36 © 2018, Inc42 Media DATALABS

 Maximum : $ 200M
Q3 : $ 55M Maximum : $ 200M
Mean : $ 40.39M Q3 : $ 54M
Median : $ 25M Mean : $ 36.58M
Q1 : $ 12.3M Median : $ 20M
Min : $ 1.35M Q1 : $ 7.7M
Min : $ 1M

*Data based on deals with disclosed fundings and without outliers.

37 © 2018, Inc42 Media DATALABS

 BUSINESS MODEL BREAKDOWN
As always, the B2B/B2C models are the leaders when funding and the number of
deals are in question. In 2017, the B2B business model touched the $9.7 Bn mark
with a total of 420 deals. The B2C funding came in second with 289 deals and
an amount of $3.4 Bn being invested. This was followed by the B2B model which
recorded $411 Mn in investment across 176 deals.

If we take a look at the past years, funding for B2B startups has been rising
dramatically. The deals which stood at 80 in 2014 has more than doubled in
2017. In terms of B2C models, deals for it stood at 95 in 2014 and continued to
grow till 2016 with 355 deals. However, it fell down significantly in 2017. As far
as B2B/B2C models are concerned, funding for this model has remained quite
consistent since 2015.

BUSINESS MODEL BREAKDOWN: YoY DEALS AND FUNDING

400
TOTAL DEALS

300

200

100

2014 2015 2016 2017

B2B
B2B B2B/B2C
B2B/B2C B2C
B2C

$10B

$8B
TOTAL FUNDING

$6B

$4B

$2B

0
2014 2015 2016 2017

B2B
B2B B2B/B2C
B2B/B2C B2C
B2C
38 © 2018, Inc42 Media DATALABS
 B2B

In 2017, the B2B startups were the hot-bed for investments. In 2017, the
B2B segment reported a rise of 8% and 11% in comparison to 2015 and
2016 respectively. As far as the amount is concerned, it fell down to $411
Mn. An interesting observation we made while breaking down the deals
stagewise was that there has been a considerable jump in the seed
funding deals for the B2B startups and the number of deals stood at
122 in 2017. However, the late stage funding has fallen down with just
four deals being reported while deals at the growth stage stood at 37
in number.

A look at the average ticket size reveals that it fell to $3.5 Mn in 2017 which
is a fall of 57% in comparison to 2016. As far as sectors are concerned for the
B2B deals, EnterpriseTech took the first spot with a total number of 79 deals
in 2017.

120

100
TOTAL DEALS

80

60

40

20

0
2014 2015 2016 2017

Bridge Funding Growth

Bridge Funding Growth Stage
Funding Late Stage
Late Stage Seed Funding
Seed Funding

$50M

$40M
TOTAL FUNDING

$30M

$20M

$10M

0
2014 2015 2016 2017

Bridge Funding Growth

Bridge Funding Growth Stage
Funding Late Stage
Late Stage Seed Funding
Seed Funding

39 © 2018, Inc42 Media DATALABS

 B2C

In 2017, B2C deals comprised of 33% of the total number of deals. Despite
a fall at the seed and bridge stage, the B2C funding recorded an 80% rise at
the late stage with 34 deals in 2017 in comparison to 2016. As far as the seed
funding numbers are concerned, the number of deals in 2017 stood at 162,
a fall of 20% and 40% in comparison to 2015 and 2016 respectively. The
growth stage deals grew by 27% in 2017 in comparison to 2016. In 2017, a
total number of 56 deals were reported at the growth stage.

Speaking of sectors, despite the fall of startups in the space, consumer

services took the first spot once again by striking a total of 99 deals,
followed by Edtech which recorded 50 deals. The Media and Entertainment
and Transport tech took the third and fourth spot with 38 and 37 deals
respectively.

250

200
TOTAL DEALS

150

100

50

0
2014 2015 2016 2017

Bridge Funding Growth

Bridge Funding Growth Stage
Funding Late Stage
Late Stage Seed Funding
Seed Funding

$100M

$80M
TOTAL FUNDING

$60M

$40M

$20M

0
2014 2015 2016 2017

Bridge Funding Growth

Bridge Funding Growth Stage
Funding Late Stage
Late Stage Seed Funding
Seed Funding

40 © 2018, Inc42 Media DATALABS

 B2B/B2C

Though there has been a significant jump in the funding amount raised by
the B2B/B2C startups this year, the deals remained largely consistent. The
amount touched a mark of $9.7 Bn which is a significant 283% jump in
comparison to 2016 and 75% jump in comparison to 2015. However, if we
remove the top five funding deals from the analysis which took away 34%
of the total funding of B2B/B2C startups, it was just an amount of $3.3 Bn
being invested in the B2C/B2B models.

Coming to the stagewise breakdown, there hasn’t been much of a significant

change in the number of deals at bridge and growth stage. However, the late
stage numbers grew to 57 deals in 2017 from 43 deals in 2016. As far as seed
funding is concerned, it fell by 13% in comparison to 2016 and reported 223
deals. Healthtech and fintech took the first spot with over 110 deals each.

250

200
TOTAL DEALS

150

100

50

0
2014 2015 2016 2017

Bridge Funding Growth

Bridge Funding Growth Stage
Funding Late Stage
Late Stage Seed Funding
Seed Funding

$180M

$160M

$140M
TOTAL FUNDING

$120M

$100M

$80M

$60M

$40M

$20M

0
2014 2015 2016 2017

Bridge Funding
Bridge Funding Growth Funding
Growth Stage Late
Late Stage Seed Funding
Stage Seed Funding

41 © 2018, Inc42 Media DATALABS

 SECTORWISE BREAKDOWN
As highlighted in the previous sections of this report, the enterprise segment has
come out to be the ninja in 2017. Enterprise applications and services startups raised
a combined funding of $531 Mn across 131 deals in 2017. This has, by far been the
largest number of deals raised by a sector in 2017. Thereby, putting it at the top spot
in terms of the number of deals.

The second spot was taken up by the healthtech and fintech sector. Healthtech
sector secured 111 deals in 2017, a rise of 35% in comparison to 2016. Fintech sector
also secured 111 deals in 2017, a 21% rise in comparison to 2016.

Surprisingly, hyperlocal and ecommerce took the third and fourth spot with 99
and 79 deals respectively. It’s important to note that unlike the top three sectors
(enterprise, healthtech and fintech) hyperlocal and ecommerce space has
witnessed a significant drop in the number of deals in comparison to the last two
years. In 2017, deals in the hyperlocal sector have fallen by 21%, while ecommerce
deals fell by 55.3% in comparison to 2016.

Coming to the top sectors based on the total funding amount being raised,
as expected, ecommerce leads the charts here with $4.6 Bn being invested,
followed by fintech which secured $3.01 Bn in total funding. The third spot
was taken up by the transport-tech which secured $1.65 Bn in funding across
37 deals. This was followed by the online travel and enterprisetech which
reported a total funding of $796 Mn and $531 Mn respectively.

However, if we remove Flipkart, Paytm and Ola’s funding amount from the total
funding raised in ecommerce, fintech and transport segment respectively, the
amount will boil down to $559 Mn for ecommerce, $1.6 Bn for fintech and $545
Mn for transport. Thereby, bringing fintech on the top, closely followed by the
online travel sector. The third, fourth and fifth spot would go to ecommerce,
transport-tech and enterprisetech respectively.

Besides these sectors, some of the sectors which witnessed a significant number
of deals include deeptech which secured over 60 deals closely followed by edtech
which witnessed about 50 deals. Closely catching up is media and entertainment
segment with 48 deals being reported in 2017. In terms of total funding amount
being raised, deeptech segment witnessed total funding of $105 Mn, edtech
witnessed $206 Mn and media and entertainment startups securedatotalfunding
of $201 Mn.

42 © 2018, Inc42 Media DATALABS

 SECTORWISE FUNDING: YoY DEALS AND FUNDING

150
TOTAL DEALS

100

50

0
2014 2015 2016 2017

Fintech Healthtech Consumer Services Ecommerce

Fintech Healthtech Consumer Services Ecommerce
Enterprise
Enterprise Applications
Applications AI and
AI and Big Data
Big Data

The above graph showcase the total number of deals secured by top six sectors of
2017 since 2014.

$5B

$4B
TOTAL FUNDING

$3B

$2B

$1B

0
2014 2015 2016 2017

Fintech
Fintech Healthtech
Healthtech Consumer Services
Consumer Services Ecommerce
Ecommerce
Enterprise
Enterprise Applications
Applications AI and
AI and Big Data
Big Data

The above graph showcase the total funding amount secured by top six sectors of
2017 since 2014.

43 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $491Mn
City With The Maximum Deals

H Y P E R L O CA L
TOP THREE
HYPERLOCAL DELIVERY FUNDINGS
Sub Sector With The Maximum Number of Deals

SWIGGY
Funding: $80 Mn

VINI COSMETICS
Most Active ACCEL Funding: $156 Mn
Investor
PARTNERS EAZYDINER
Funding: $45 Mn

99 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $6.6 Mn 2017
STATS

44 © 2018, Inc42 Media DATALABS

 The hype created around the hyperlocal startups appears to have been short-lived.
The sector, which picked immense pace in 2015, started to fall in 2016. Starting from
128 deals in 2015, hyperlocal sector witnessed 99 deals in 2017, which is a decine of
24% and 20% in comparison to 2015 and 2016.

As far as the composition of hyperlocal deals in the total deals is concerned, it stood
at 15% of the total number of deals in 2015, and fell down to 11% in 2017.

Contrary to the number of deals, the total funding amount raised in hyperlocal
space in 2017 rose by 135% in comparison to 2016. In 2017, hyperlocal startups
raked in a total funding of $491 Mn. However, it is still less than the $716 Mn
raised in 2015 – the year in which hyperlocal became the most sought-after
segment.

“Since 2017, over $1.5 Bn has been invested in the Hyperlocal sector
across 380 deals”

Coming to the deal composition stagewise, though seed funding and bridge funding
have fallen in this segment, there has been a remarkable jump in the growth and late
stage funding. Seed funding in hyperlocal space, which stood at 92 deals in 2016, fell
to 46 in 2017. Whereas, the growth stage and the late stage funding deals grew by
62% and 225% respectively in 2017 as compared to 2016.

HYPERLOCAL FUNDING: YoY DEALS AND FUNDING

$800M 140

$600M 105
Deals
Total Funding
Amount

TotalofDeals

$400M 70
Funding

Number

$200M 35

0 0
2014 2015 2016 2017

Total Funding
Funding Amount Total Deals
Number of Deals

45 © 2018, Inc42 Media DATALABS

 The rise in the growth and late stage funding in this sector has led to an increase
in the average ticket size for the sector as well. For 2017, the average ticket size for
hyperlocal startups stood at $6.6 Mn. The stagewise breakdown of average ticket
size reveals that – seed funding deals fell by 55% to $357K, in comparison to 2016.
The average ticker size in 2016 was $737K.

Similarly, the average ticket size for growth funding fell down to $7.4 Mn in 2017
from $9.5 Mn in 2016. Both late and bridge stage funding witnessed a high jump
of 37% and 115% respectively in 2017 in comparison to 2016. For 2017, the average
ticket size for the bridge and late funding stood at $1.7 Mn and $26 Mn respectively.

In 2016, the average ticket size for bridge and growth stage funding stood at $827K
and $9.4 Mn respectively.

HYPERLOCAL FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

$60M

$50M

$40M
Average Deal Size

$30M

$20M

$10M

0
2014 2015 2016 2017

Seed
Seed Funding
Funding BridgeFunding
Bridge Funding Growth
GrowthStage
Funding Late Stage
Late Stage

46 © 2018, Inc42 Media DATALABS

 THE HYPERLOCAL BUBBLE

Indian hyperlocal services market is said to be a $10 Bn+ industry, with an

increasingly digital influence adding to the count every passing day. Rapid
urbanisation, increased disposable income of the middle class segment in
India, personalised services and products made available at their door-steps
are contributing to the overall growth of Indian hyperlocal space. Hyperlocal
primarily consists of delivery and services startups offering services such as
grocery and food delivery, beauty and cleaning services, etc.

There is no doubt that the hyperlocal startups have been instrumental in bringing
in new avenues for local stores or service professionals to offer their product and
services. However, the customer acquisition costs are too high in this segment,
thereby making the model unsustainable for the long run.

If we look at the historical data of hyperlocal segment in India, one can clearly
find out that all the hype around hyperlocal began during the end of 2014, making
2015 – a significant year for hyperlocal startups. The concept, which was fairly
new, was flooded with funds. The success of 2-3 players led to a crowded market
with startups offering similar products and services, or say, this was the rise of
‘Me-Too’ startups.

A research done by Inc42 Datalabs team in 2016, highlighted that over 400+
startups were launched in this space till mid-2016. A year wise launch breakdown
revealed that over 180 startups were founded in 2015 alone.

Likewise, investors also went gaga about the segment and funded these startups.
If we look at the data between 2015-2017, over $1.5 Bn has been invested across
380 startups in this space. Over $716 Mn was invested in 2015 alone. Interestingly,
out of these 281 unique startups in hyperlocal space that have raised funding
between 2014-2015, just 34% startups have raised more than one round of
funding. Thus, the market came down crashing.

Furthermore, Indians are not accustomed to using hyperlocal startups which finds
usage only in the three metros – Delhi, Bengaluru and Mumbai. Out of the 380
deals made since 2014 by consumer service startups, only 57 deals were made for
cities other than the three, namely, Delhi, Bengaluru and Mumbai, which accounts
to 15% of all the deals in this space.

While a fall in funding in this space has been blamed on the business model and
the crowded market, arguably that’s not the only reason why Indian hyperlocal
startups are coming down. Entry of global giants in this space is another reason
why local startups are facing the heat.

For instance, Google announced the launch of Areo offering services and delivery
in India in 2017. Similarly, Uber also launched UberEats – a food delivery service,
Amazon India tabled Pantry for grocery delivery and Ola acquired Foodpanda
India to venture into the food delivery sector. Not only this, homegrown
ecommerce giant Flipkart is once again serious about grocery services. The entry
of these giants in the hyperlocal space is definitely going to be a challenge for
startups in this space.

47 © 2018, Inc42 Media DATALABS

 Siddharth Talwar, Lightbox Ventures

Delivering goods and services from point A to point B is always

going to be expensive, complicated and low-margin business. But
every business cannot be a high margin business. And very few
businesses can boast the potential market size of the hyperlocal
space. If the combination of smartphones, big data, and stronger
delivery infrastructure can help squeeze a little more margin in a
gigantic market, there will be investors for that, even in a more
cautious environment.

K Ganesh, GrowthStory

These business models require capital to reach a steady state and

breakeven. The first challenge is to break even on unit order basis.
Then breakeven at operational level including fixed costs. Finally,
breakeven at the company level. For a B2C business with low ticket
size, even a 20 percent gross margin is too small in absolute terms
to reach breakeven given delivery costs, cost of returns, payment
charges, etc. So, unless VC sentiment comes back to support these,
it will be tough to pull off.

Bhaskar Majumdar, Unicorn India Ventures

I believe this sector has now matured. Incumbents need to

focus on standardising their operations and providing a rich
delivery experience so customers are habituated to place orders
repeatedly without the need for offers or discounts.

48 © 2018, Inc42 Media DATALABS

 Vikram Gupta, IvyCap Ventures

Unless unit economics are addressed appropriately investors will

not invest in this hyperlocal sector. However, unit economics start
working well at the very high level of total investment. Therefore, an
investor has to plan accordingly.

K Ganesh, GrowthStory

Consumer services market is a large and broad term and

consists of many segments. The horizontal businesses will
see consolidations, rest will get acquired or shut down. On
the other hand, there are huge vertical commerce, niche
commerce, product and services businesses that will thrive,
these will not compete with horizontal players. And there
is still huge open opportunity to build brands and create
valuable companies.

Siddharth Talwar, Lightbox Ventures

It’s not a winner-take-all game at all. In fact, the hyperlocal

market is one market I think there could be several regional
winners. Larger Indian cities are huge markets in themselves,
billion-dollar markets. I think it’s completely possible for
companies to target single cities and build their operations
around them rather than trying to be national.

49 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $4.58 Bn
City With The Maximum Deals

ECOMMERCE
TOP THREE
MARKETPLACES FUNDINGS
Sub Sector With The Maximum Number of Deals

FLIPKART
Funding: $4 Bn

PAYTM ECOMM.
Most Active ACCEL Funding: $200 Mn
Investor
PARTNERS YEPME
Funding: $45 Mn

80 TOTAL NUMBER B2B/B2C

OF DEALS Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $86 Mn 2017
STATS

50 © 2018, Inc42 Media DATALABS

 In 2017, the ecommerce fad seems to have lost its charm among the investors.
In total, ecommerce sector witnessed 80 deals with $4.58 Bn being invested,
a 55% fall and 345% rise in the number of deals and funding amount in
comparison to 2016 respectively. However, if we remove the funding raised by
Flipkart in 2017 i.e. $4 Bn approximately, the funding amount comes down to
$580 Mn for ecommerce sector. In 2016, about $1 Bn was invested across 177
deals in the ecommerce segment.

The composition of ecommerce deals in the total number of deals has also fallen
drastically from 19% in 2015 and 19% in 2016 to 9% in 2017. This meltdown makes
it evident that ecommerce is going through a rough time.

Contrary to the hyperlocal space, ecommerce fundings have not only fallen in early
stage but also at the growth and late stage. There has been a decline of 64%, 38%
and 43% in ecommerce deals in the seed, growth and late stage respectively in
2017 when compared to 2016.

In 2016, the number of deals at seed, growth and late stage stood at 94, 39 and 23
respectively. This number fell down to 34, 24 and 13 for 2017 at seed, late and growth
stage respectively.

ECOMMERCE FUNDING: YoY DEALS AND FUNDING

$5B 180

$4B 144

$3B 108
of Deals
Amount
Total Funding

Total Deals
Funding

Number

$2B 72

$1B 36

0 0
2014 2015 2016 2017

Total Funding
Funding Amount Total
NumberDeals
of Deals

Further analysis highlights the fact that it was only in 2015 when the deals
in ecommerce at the growth stage had crossed 50 mark with 54 deals being
reported, and since then, the number of deals at this stage has been falling.

51 © 2018, Inc42 Media DATALABS

 As far as the average deal size is concerned, thanks to Flipkart, the average deal
size for ecommerce sector touched the $86 Mn mark. The average ticket size for
ecommerce for the preceding years was way much lower than 2017. It stood at $77
Mn in 2014, it fell to $22 Mn in 2016 and further fell to $9.2 Mn in 2016. The year 2017,
came out to be pretty good when the average ticket size is concerned.

“About $11 Bn has been invested across 471 deals since 2014 in
ecommerce startups”

Barring seed funding, the average deal size have grown tremendously across stages.
To be specific, the growth stage average ticket size has grown from $7.5 Mn in 2016 to
$17 Mn in 2017. Similarly, the late stage deal size has grown to $3572 Mn in 2017 from
$39 Mn in 2016.

It’s interesting to note that the average ticket size at bridge stage has been growing
since 2014. It stood at $536K in 2014, growing at a high rate it touched $1.1 Mn mark
in 2016 and further grew to $1.5 Mn in 2017. When it comes to seed stage, the average
ticket size grew for two years in a row from $466K in 2014 to touching $737K in 2016,
however, it came down falling to $572K in 2017.

ECOMMERCE FUNDING: YOY AVERAGE DEAL SIZE BY STAGE

$60M

$55M

$50M

$45M

$40M
Size
DealSize

$35M
AverageDeal

$30M
Average

$25M

$20M

$15M

$10M

$5M

0
2014 2015 2016 2017

SeedSeed
Funding
Funding Bridge
BridgeFunding
Funding Growth
Growth Funding Late Stage
Stage Late Stage

52 © 2018, Inc42 Media DATALABS

 MARKET SHOWS POSITIVE SIGNS BUT
FUNDING CONTINUES TO FALL
According to a recent report by Morgan Stanley, India’s ecommerce will continue to
grow at a compound annual growth rate (CAGR) of 30% and will touch the $200 Bn
mark by 2027.

Currently, only 14% of India’s Internet user base i.e. a total of 60 Mn users are
shopping online; this is going to grow by 50% by 2026 to about 475 Mn users.
This is due to digitising in a predominantly cash-based economy and reforms
in the archaic tax system. Though the market is going to grow at an
unprecedented rate, the same doesn’t reflect on startups. As mentioned
in the previous section, the funding in ecommerce has been falling since
2015, if we disregard Flipkart’s funding from it. Added to this, funding for
new startups has also come down and it appears investors are now cautious
about funding new startups. A further classification of the funding data for
ecommerce highlights that funding was majorly done for niche players which
composed of 80% of the total ecommerce seed deals in 2017 materialised in
niche startups.

One of the major reasons for the drop in funding in the ecommerce segment
can be credited to the hyper-funded players like Flipkart that are filled with
billions of dollar. Then, there is Amazon India which is putting in enormous
amount of money in the segment since its entry and is placing a huge pressure
on homegrown players. The launch of Paytm Mall backed by Alibaba brings in
a different type of competition altogether.

The other reason responsible for the drop in funding can be due to the large losses
posted by the ecommerce players over the years. And of course, the failure of
established players like Snapdeal. While horizontal players are facing issues,
vertical ecommerce seems to be on the rise. With the success of players like
Pepperfry and UrbanLadder in furniture category along with fashion marketplaces;
players like Lenskart and the healthcare marketplaces have led way for startups
offering products under one major category. Besides, the mix of online-offline selling
points have also added to the success of these players.

Another imperative factor which has helped some of the ecommerce players,
irrespective of being horizontal or vertical in approach, is the utilisation of private
labels. Over the past two years, many of the players have launched private labels
which offers more margins and helps them attain some level of profitability. Not only
it gives more control over pricing, but it also helps the retailer in creating its own
brand and edge over the competitors.

For instance, Myntra has over 13 private labels and the company recently announced
that its private labels’ business has turned profitable; its portfolio of 13 fashion
brands is generating a revenues of $25 Mn a month and is thereby expected to give
an annual revenue of $300 Mn, which accounts for around 23% of its total revenue.
Similarly, players like Flipkart and UrbanLadder are also banking on their private
labels for growth.

53 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

DELHI/NCR $475 Mn
City With The Maximum Deals

LOGISTICS
TOP THREE
TRANSPORTATION LOGISTICS FUNDINGS
Sub Sector With The Maximum Number of Deals

DELHIVERY
Funding: $130 Mn

BLACKBUCK
Most Active ACCEL Funding: $70 Mn
Investor
PARTNERS JUSTBUYLIVE
Funding: $100 Mn

28 TOTAL NUMBER B2B/B2C

OF DEALS Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $17.6 Mn 2017
STATS

54 © 2018, Inc42 Media DATALABS

 The logistics sector witnessed an investment of $475 Mn across 28 deals in 2017.
The deals in logistics segment have remained low consistently except for the year
2015 which saw 42 deals. The year 2017 witnessed a slight hike in the number
of deals in comparison to 2016 which reported 23 deals. As far as the funding
amount is concerned, when compared to past four years, 2017 witnessed largest
funding amount being raised by logistics startups, a significant rise from $132 Mn
being raised in 2016.

Just like the ecommerce sector, logistics sector in India also witnessed a
significant fall in the seed funding deals in 2017, the deals dropped from 24 in
2015 and 14 in 2016 to just 6 in 2017. Despite the recorded fall, the rest of the
stages witnessed a significant rise.

LOGISTICS FUNDING: YoY DEALS AND FUNDING

$500M 45

$400M 36

$300M 27
Total Funding

Deals
Amount

Deals
Totalof
Funding

Number

$200M 18

$100M 9

0 0
2014 2015 2016 2017

Total Funding
Funding Amount Total
NumberDeals
of Deals

The average deal size in the seed stage logistics startups came down to $425K in
2017 from $667K in 2016. As far as the growth stage is concerned, it grew from
$7.7 Mn in 2016 to $20 Mn in 2017. While the average deal size for the late stage
stood at an amount of $37 Mn.

LOGISTICS FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M

Bridge FundingBridge Funding

GrowthGrowth
Funding
Stage Late
Late Stage Stage
Seed Funding Seed Funding

55 © 2018, Inc42 Media DATALABS

 ALONG WITH ECOMMERCE,
LOGISTICS BURN TOO
As per a June 2016 report by World Bank, India has achieved a jump of 19 places
in the Global Logistics Performance Index i.e. from the 54th position in 2014 to
the 35th in 2016. Not only this, recently in November 2017, the government also
gave infrastructure status to logistics clubbing it with transport which means that
in the near future, Indian startups can sell their goods in global markets at much
better competitive prices. A significant role here is being played by government
initiatives such as Make In India, which is geared towards improvements in the
country’s infrastructure and increased domestic consumption. But at the same
time, the Indian logistics startups have also paved way for heavy investments in
the sector.

In India, logistics startups gained their foothold after the onset of the ecommerce
industry. Not only has it allowed retailers to reach the remotest corners of the
country, but it has also provided the ecommerce playersaliberty to draw strategies
like instant deliveries.

However, despite all the work being done, funding for these startups have
remained consistent and this can be directly linked to the fall of ecommerce
startups on one side and on the other side, the push towards the growth of the
in-house logistics network of players like Flipkart and Amazon. Recently, it was
also reported that the Deutsche Post, DHL’s (DPDHL’s) dedicated ecommerce
logistics arm, is starting its operations in India which will further intensify the
competition for startups in this space.

“In total, since 2014, about $1.3 Bn has been invested across 97 deals
in logistics startups”

The startups in this segment have also started tapping new age technologies to
support the existing supply chain solutions or to fill the gaps in the otherwise
fragmented and unorganised Indian logistics industry. For instance, the existence
of startups like Locus and LogiNext which use machine learning and AI for route
optimisation, real time tracking, etc. shows how startups are optimising on the
new age technologies.

To drive the growth in this sector in 2018, a multitude of foreign investors

and funds have been launched with a special focus on logistics startups.
For logistics startups operating in the country, the focus will likely be
on integrating new and advanced technologies to develop more pervasive
solutions that can fill the existing gaps in the supply chain, especially
in the Tier II and Tier III regions of the country. The Internet of Things
(IoT), for instance, will make real-time tracking and data collection more
efficient for route optimisation. On the other hand, technologies like
artificial intelligence and machine learning could help implement
intelligent route optimisation and develop cloud-based logistics management
solutions. Also, the diversification of logistics startups from B2C to B2B business
models will also create new growth avenues for the industry as a whole.

56 © 2018, Inc42 Media DATALABS

 49

TOTAL FUNDING

B E N G A LU R U $3.01 Bn
City With The Maximum Deals

FINTECH
TOP THREE
O NL I NE L E N D IN G FUNDINGS
Sub Sector With The Maximum Number of Deals

PAYTM
Funding: $1.6 Bn

PHONEPE
Most Active KALAARI Funding: $539 Mn
Investor
CAPITAL ITZCASH
Funding: $123 Mn

111 TOTAL NUMBER B2B/B2C

OF DEALS Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $39 Mn 2017
STATS

57 © 2018, Inc42 Media DATALABS

 The number of deals in the fintech segment has been growing significantly since
2014. Starting from just 26 deals in 2014, it crossed the 100 mark in 2017. There
were over 111 deals reported in the fintech segment in 2017, a rise of 21% from
2016. Apart from the number of deals, the funding amount is also growing at a
tremendous rate for fintech in India. In 2017, an amount of over $3.01 Bn was
invested in fintech startups, which is a rise of 281% from 2016. The year 2016 had
witnessed a drop in the funding amount in comparison to the year 2015.

In 2014, the number of deals stood at 26 and 2015 was the year when fintech
funding had spiked for the first time with 74 deals being reported and about $1.5
Bn was invested. The growth in the number of deals continued in 2016 as well but
the amount came down to $791 Mn.

Irrespective of the stage, fintech funding continued to rise in 2017. Seed funding
grew by 14% reporting 48 deals and while the growth stage witnessed as many as
31 deals. A significant jump was also made at the late stage which witnessed a total
number of 25 deals i.e. a rise of 150% in comparison to 2016.

FINTECH FUNDING: YoY DEALS AND FUNDING

$3.5B 120

$3B 103

$2.5B 86
of Deals
Amount

$2B 69
Funding

Deals
Funding

Number

$1.5B 51
Total
Total

$1B 34

$0.5B 17

0 0
2014 2015 2016 2017

Total Funding
Funding Amount Total Deals
Number of Deals

In 2016, just 10 deals were reported in the late stage and 42 deals were
reported at the seed stage. However, in 2017, bridge funding deals in this
segment witnessed a downfall, which fell from 12 in 2016 to 7 in 2017. As far
as amount is concerned, courtesy Paytm funding, the late stage funding grew
at a staggering rate in comparison to 2016. The funding at this stage stood
at $429 Mn in 2016 and grew to $2.8 Bn in 2017. Apart from late stage, the
funding amount has fallen for the rest of the stages.

58 © 2018, Inc42 Media DATALABS

 Online Lending

SME Lending
Micro Lending
Wallet
Digital Payments
Lending
Mobile Payments
Payments
Consumer Lending

Digital Lending

Overall, irrespective of the stage, the average ticket size for fintech startups grew at
a massive rate in 2017. Starting from just $6.4 Mn in 2014 it grew to $27 Mn in 2015,
fell to $11.6 Mn in 2016 and finally grew to $39 Mn in 2017.

“In total, since 2014, about $5.4 Bn has been invested across 303 deals
in fintech startups”

When it comes to the average ticket size for fintech, it has grown in seed stage from
an amount of $772K in 2016 to $790K in 2017. Similarly, the average ticket size at the
late stage has also grown from $47 Mn in 2016 to $117 Mn in 2017. Whereas in the
growth stage, the average ticket size has fallen drastically and stood at $6.5 Mn in
2017 from an amount of $13 Mn in 2016. All-inclusive and irrespective of the stage,
the average ticket size in fintech has risen from an amount of $11.6 Mn to $39 Mn
in 2017.

FINTECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M

Seed Funding Bridge Funding Growth Stage Late Stage

Seed Funding Bridge Funding Growth Funding Late Stage

59 © 2018, Inc42 Media DATALABS

 DEMONETISATION+UPI+BHIM
FINTECH BOOMS
India is currently home to more than 500 fintech startups, whose collective
aim is to attain financial inclusion. Since the early 2015, the fintech sector
has undergone massive changes, chief among them being the move towards
a cashless economy. The government’s enthusiastic promotion of cashless
technologies such as digital wallets, internet banking, the mobile-driven point
of sale and others as well as the launch of IndiaStack including eKYC, UPI
and BHIM have also managed to restructure the financial sector, disrupting
the long-held monopoly of traditional institutions like banks. In fact, banks
like Axis, ICICI, HDFC and YES Bank, are now working with fintech startups to
boost their technical and consumer fronts.

Sanjay Swamy, Prime Venture Partners

In a country like India that is credit starved, the

biggest problem is the thin-file problem, where
there is no data about the SME or consumer.
Until we start leveraging alternate forms of data
to arrive at credit rating, we won’t have the data
to lend. Startups that can do a better job of
identifying prospective borrowers will have good
potential.

An increase in access to the internet and social media, coupled with an

explosion of smartphones, tablets and computers, have helped usher in swift,
automated and efficient financial services solutions. Another factor that has
played an integral part in the rise of the fintech industry was demonetisation,
which came into force on November 8, 2016. The year 2017 ended on a high
note for the Indian digital payments industry, with digital transactions reaching
a new peak of 1.06 Bn transactions in December. As per the data released by
the RBI, the increase in transactions translate to a jump of 6.05% from the
997.1 Mn transactions clocked in November 2017.

With the entry of big players like Amazon, Google, PayPal, Stripe among others,
India’s digital payments space has morphed into a behemoth of $500 Bn,
according to a report by Google and BCG. Within fintech, blockchain – the underlying
technology or platform of Bitcoin, is all set to disrupt the way we keep records, data
and the way we share them. The distributed ledger technology or platform
(DLT) has found huge applications in banking, insurance, digital payments,
logistics, etc.

In India, corporates and startups have come together to integrate the platform
at a greater pace such as Bankchain, where 27 banks have collaborated with
blockchain startup Primechain Technologies. The year 2017 also saw an
India-based startup Indicoin, going for an Initial Coin Offering (ICO). However,
it should be noted that in India, there isn’t much clarity on this since the
government doesn’t seem to be in the favour of virtual currency.

60 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $333 Mn
City With The Maximum Deals

H E A LT H T E C H
TOP THREE
HEALTHTECH AGGREGATOR FUNDINGS
Sub Sector With The Maximum Number of Deals

PRACTO
Funding: $55 Mn

Most Active
ACCEL HEALTHCARE
ATHOME
Investor PARTNERS Funding: $38 Mn

INDIA MEDGENOME
Funding: $30 Mn

111 TOTAL NUMBER B2B/B2C

OF DEALS Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $4 Mn 2017
STATS

61 © 2018, Inc42 Media DATALABS

 Healthtech is the new fintech! Believe it, when we say so. The funding in this
segment stood at an all time high in 2017. Starting from just 26 deals in 2014,
the deals in this segment grew by 215% with 82 deals 2016 to reach 111 deals in
2017, making it the second most funded segment of 2017.

Not just in terms of the number of deals, healthtech startups raised over $333 Mn
in funding in 2017 which is three times of 2016. Interestingly, there was a fall in
2016 in the amount which stood at $103 Mn, however, the sector bounced back
once again in 2017.

“HealthTech startups have raised over $912 Mn across 269 deals since
2014”

Irrespective of the stage, the healthtech funding deals have grown tremendously.
At seed stage, 81 deals were sealed in 2017, which is a rise by 35% and 48% in
comparison to 2015 and 2016 respectively. As far as the other stages are
concerned, there wasn’t any significant change in the number of deals in
comparison to 2015, apart from the doubling of bridge funding deals.

HEALTHTECH FUNDING: YoY DEALS AND FUNDING

$350M 120

$300M 103

$250M 86
of Deals
Amount
Total Funding

$200M 69
Total Deals
Funding

Number

$150M 51

$100M 34

$50M 17

0 0
2014 2015 2016 2017

Funding
Total Amount
Funding Number of Deals
Total Deals

62 © 2018, Inc42 Media DATALABS

 MediTech

Fitness

Aggregator
Biotech

AI
Counelling woman

Health
Doctor
diagnostics
appointment

Home

Discovery
ePharmacy

Services
Pharmacy
Enterprise

Though the number of deals in healthtech are growing at the seed stage, the
average ticket size has reduced from the amount of $559K to $428K. A similar
trend was seen in the bridge funding deals as well where the average ticket size
fell from the amount of $1.07 Mn in 2016 to $975K in 2017. However, the deal
size at the late and growth stage grew significantly. The ticket size stood at an
amount of $12.5 Mn and $31 Mn at the growth and late stages respectively in
2017. While in 2016, the amount was $5 Mn at growth stage and $13 Mn at the
late stage. Overall, the average ticket size in healthtech rose by 86%, which is an
increase from $2.1 Mn in 2016 to $3.9 Mn in 2017.

HEALTHTECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M $70M

Seed Funding Bridge

Seed Funding Funding
Bridge Funding Growth
Growth Stage Funding
Late Stage Late Stage

63 © 2018, Inc42 Media DATALABS

 HEALTHTECH IS THE NEW FINTECH
Indian healthcare market, which is worth $100 Bn, is likely to grow at a
pace of 23% CAGR to reach the mark of $280 Bn by 2020, as per a Deloitte
2016 report. An increase in the middle-class population, the coming of the
state-of-the-art healthcare facilities, availability of expert physicians and an
increased dependency on technology to facilitate healthcare at the prevention
stage are driving the growth of the healthtech industry in India.

Traditionally, healthtech startups were associated with those providing diagnostic,

enterprise, medicine delivery solutions, etc. However, a new breed of startups has
emerged trying to solve issues at the root level such as the consumer lifestyle,
mental stress, early diagnosis of genetic disorders among others. Thus, opening
up doors for opportunities in healthtech startups to disrupt the untapped niche
areas in this space.

K Ganesh, GrowthStory

eGeriatric care, elder-care, chronic care, mental

health, providing access to remote areas with
socialists from metros through technology and
telemedicine will be big in 2018. Further, we will
see green shoot initiatives in the use of data,
AI and ML in healthcare coming up. I expect a
lot moreinterest in proactive, prevention-based
healthcare models to emerge in coming years.

A lot of innovations have been witnessed in the healthtech startups by an effective

utilisation of AI and Big Data and the launch of IoT innovations among others. In
2016 and in the early 2017, a major chunk of the healthcare investments went into
startups that are essentially working on telemedicine, doctor appointments and
health apps but lately, we have also seen a rapid growth in wearable tech gadgets,
genetic research and smart diagnostics space.

The digitisation wave has helped in increasing the pace of innovation in the
healthtech space as it did to fintech. The year 2017, for instance, saw an
extensive use of artificial intelligence and machine learning by healthtech
startups for accurate screen testing of diseases like diabetes, breast cancer,
TB, etc. Following suit, the year 2018 will likely see smart wearables being
used. More and more startups are likely to turn to genetics and gene therapy
to develop effective treatment solutions.

64 © 2018, Inc42 Media DATALABS

 57

TOTAL FUNDING

B E N G A LU R U $531Mn
City With The Maximum Deals

ENTERPRISE TECH
TOP THREE
ENTERPRISE APPLICATIONS FUNDINGS
Sub Sector With The Maximum Number of Deals
MARKETSAND
MARKETS
Funding: $56 Mn

PI DATACENTERS
Most Active IDG Funding: $90 Mn
Investor
VENTURES DRUVA
Funding: $80 Mn

B2B
131 TOTAL NUMBER
OF DEALS Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $6.1 Mn 2017
STATS

65 © 2018, Inc42 Media DATALABS

 Enterprise applications and services startups combined together raised an
amount of $531 Mn across 131 deals in 2017, a rise of 34% in comparison to
2016. However, this is a fall by 10% in comparison to 2015. Interestingly, as far
as the deal composition is concerned, the deals percentage in the enterprisetech
sector has risen significantly since 2016. Growing at a pace of 14% YoY, it is
expected that the sector will continue to grow further.

“About $2 Bn has been invested in enterprise tech startups across 471

deals in the last 4 years”

As far as the funding amount is concerned, there is a drop in comparison to the past
three years. The year 2015 was the golden period for the enterprise sector reporting
a total funding of $588 Mn across 162 deals.

The enterprise applications witnessed 78 deals and the enterprise services

segment witnessed 53 deals in 2017, which is a small rise in comparison to
2016 that witnessed as many as 71 and 45 deals in enterprise applications
and services respectively. However, when it comes to the funding amount,
there has been a significant fall in the enterprise applications segment. To
be precise, the funding fell from an astonishing figure of $345 Mn in 2016
to $257 Mn in 2017, evidently a fall of 26%.
Ecommerce
Development

Program
Automation
Analytics

Hrtech
Online

Management
B2B

Talent Firm
Storage
Solution
Applications
Data

Saas
Service

Chain
Tech

Software

Services
Computing
Security
Marketing

Cloud
Sales

Mobile
Hiring
App
Provider
Solutions
Gaming
Enabler
Product

Consumer Sdn

Cybersecurity Developers
Loyalty

Platform

66 © 2018, Inc42 Media DATALABS

 ENTERPRISE TECH FUNDING: YoY DEALS AND FUNDING

$600M 180

$500M 150

$400M 120

Deals
Funding

Deals
Amount

$300M 90

Total of
Number
Total

$200M 60

$100M 30

0 0
2014 2015 2016 2017

Total FundingNumber of Deals

Amount Total Deals

In the context of seed stage in enterprise applications, the deals rose from 41 in
2016 to 58 in 2017, an encouraging rise of 41%. However, deals at the other stages
took a plunge. As far as the enterprise services is concerned, the deals largely grew
at the growth stage by 88% in comparison to 2016 and recorded a total of 15 deals
in 2017. In 2016, the number of deals at growth stage stood at 8.

Coming to the topic of average ticket size for the enterprisetech startups, it stood
at $6 Mn in 2017. Stagewise breakdown reveals that seed stage average ticket size
stood at $610K, a fall of 15% in comparison to 2016. While, for the growth and late
stage, it stood at $16 Mn and $42 Mn in 2017.

ENTERPRISE TECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M

Seed FundingSeed Funding

Bridge Bridge
FundingFunding Growth
Growth StageFunding
Late Stage Late Stage

67 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $206 Mn
City With The Maximum Deals

EDTECH
TOP THREE
E-LEARNING FUNDINGS
Sub Sector With The Maximum Number of Deals
CUEMATH
Funding: $15 Mn

Most Active Village BYJU's

Funding: $70 Mn
Investor
Capital UNACADEMY
Funding: $16 Mn

50 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $6.5 Mn 2017
STATS

60
68 © 2018, Inc42 Media DATALABS
 In 2017, $206 Mn was invested in edtech startups across 50 deals. Though there has
been a fall in the number of deals, the funding amount rose from $165 Mn in 2016
to $206 Mn in 2017, which translates to a 25% rise with a major funding credit going
to BYJU’S. While breaking down the deals stagewise – apart from the seed stage
funding – deals at the other stages have been growing steadily.

“Since 2014, over $466 Mn has been invested across 186 edtech
startups”

The seed stage deals fell from 46 in 2016 to 30 in 2017. The maximum upsurge was
witnessed at the growth stage, which recorded 11 deals and this figure translates
into a rise in the deals by 120% in comparison to 2016.

EDTECH FUNDING: YoY DEALS AND FUNDING

$200M 55

$150M 41
Amount

of deals
Funding

Deals
TotalFunding

$100M 27
Number
Total
Total

$50M 14

0 0
2014 2015 2016 2017

Total
Total Funding
Funding Amount Total of
Number Deals
deals

The average ticket size for edtech startups rose from $4.8 Mn in 2016 to $6.4 Mn in
2017, however, there has been a significant fall in the ticket size at the seed and
growth stage. It fell from a staggering figure of $530K in 2016 to $398K in 2017 for
the seed stage and from $18.6 Mn to $6.5 Mn for the growth stage.
2017
2016
2015
2014

0 $10M $20M $30M $40M $50M

Bridge Funding Growth Stage Late Stage Seed Funding

Bridge Funding Growth Funding Late Stage Seed Funding

69 © 2018, Inc42 Media DATALABS

 MARKET CONTINUES TO GROW
FOR EDTECH STARTUPS
Being the second most populous country in the world, India carries a lot of baggage
that other nations may not necessarily carry. Lack of quality education is one such
example and it is one of the biggest shortcomings in the country which the Indian
government is still struggling to overcome.

By wielding upcoming technologies, Indian Edtech startups are working to increase

access to affordable and quality education across primary, secondary and higher
levels of education.

According to a recent report by Google and KPMG, online education in India will
see a tremendous growth of about eight times from its current state in the next five
years. The paid user base is expected to grow over six times from the figure of
1.6 Mn users in 2016 to 9.6 Mn users in 2021. This will have a significant impact on
the edtech market that has a potential to touch $1.96 Bn by 2021 from $247 Mn
where it stands now.

But, despite the huge opportunities that this sector provides, edtech startups
in India are currently held back due to inadequate infrastructure and reach.
The startups are trying to increase their reach of e-learning to semi-urban
and rural areas across the country. By leveraging on vernacular languages,
these startups are looking to make education more accessible to the masses.
Geared towards making the learning process more efficient and streamlined,
the AI revolution and its adoption by Edtech startups is expected to transform
this space. Currently, edtech startups that are utilising AI in India to impart
education include Kalaari Capital-backed Embibe, Tiger Global-backed Vedantu
and OpenEd.ai, among others.

Education is of paramount importance for developing nations like India. While the
government’s slogan of Digital India is slowly taking shape, with fintech and big
data segment (among others) benefiting from the move and investors’ sentiments
going in the positive direction for Edtech, the future looks seemingly bright for the
sector.

Pankaj Makkar, Bertelsmann India

Investments

There are three key constraints in edtech - lack

of high speed streaming bandwidth for online
education companies, regulations and lack of
budgets on education businesses to buy edtech
offerings in India. Once the first two reasons will
go away, large online education consumer plays
will be possible and will attract lots of capital.

70 © 2018, Inc42 Media DATALABS

 63

TOTAL FUNDING

B E N G A LU R U $105 Mn
City With The Maximum Deals

DEEPTECH
TOP THREE
A I A N D B I G DATA FUNDINGS
Sub Sector With The Maximum Number of Deals

FLYTXT
Funding: $11 Mn

Most Active KALAARI QUBOLE

Funding: $25 Mn
Investor
CAPITAL ACTIVE
INTELLIGENCE
Funding: $8.25 Mn

60 TOTAL NUMBER
OF DEALS
B2B
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $2.8 Mn 2017
STATS

71 © 2018, Inc42 Media DATALABS

 Indian tech startup ecosystem recorded $105 Mn funding across 60 deals in the
deeptech segment. Though the number of deals has grown by 46% YoY, there has
been a fall of 41% in the total funding raised. In 2016, deals at seed and growth stage
stood at 26 and 7 respectively. In the last four years, about $456 Mn has been
invested across 137 deeptech deals. The average ticket size for deeptech startups
has fallen from $8.07 Mn in 2016 to $2.7 Mn in 2017 which is a significant drop of 66%.

DEEPTECH FUNDING: YoY DEALS AND FUNDING

$150M 50

$100M 33
Total Funding

Total Deals
$50M 17

0 0
2014 2015 2016 2017

Total
Total Funding
Funding Amount TotalofDeals
Number deals

DEEPTECH FUNDING: YoY AVERAGE DEAL

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M $70M

Bridge Funding GrowthGrowth

Bridge Funding Funding
Stage Late StageLateSeed
Stage
Funding Seed Funding

Manish Singhal, Pi Ventures

I believe we are at the cusp of a change in the

venture investment thesis. So far, Indian VCs have
been working on a market share led thesis, i.e.
funding companies that can grab the largest chunk
of the market. Now VCs are looking at DeepTech
companies. This is the new thesis for VCs. Can we
find companies who can create significant
disruption on the back of IP? We are going through
a transition phase and hence the drop. I do think
2018 should see an uptick in DeepTech investments.

72 © 2018, Inc42 Media DATALABS

 65

TOTAL FUNDING

B E N G A LU R U $46 Mn
City With The Maximum Deals

AGRITECH
S U P P LY C H A I N TOP THREE
FUNDINGS
Sub Sector With The Maximum Number of Deals

AGROSTAR
Funding: $10 Mn

Most Active ACCEL EM3AGRI

Funding: $10 Mn
Investor
PARTNERS
FARMTAAZA
Funding: $8 Mn

17 TOTAL NUMBER
OF DEALS
B2B/B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $4.2 Mn 2017
STATS

73 © 2018, Inc42 Media DATALABS

 The agritech sector in India witnessed 17 deals with $46 Mn being invested in 2017.
Though there isn’t much data regarding agritech funding available for the last few
years, but looking at the pace at which agritech startups got funded in 2017, it
appears agritech will continue to garner investor interest in 2018 and beyond.

AGRITECH FUNDING: YoY DEALS AND FUNDING

$50M 18

$40M 14
Amount
Funding

$30M 11

deals
Deals
Funding

Total of
Number
TotalTotal

$20M 7

$10M 4

0 0
2014 2015 2016 2017

TotalFunding
Total FundingAmount Total Deals
Number of deals

With an average ticket size of $4.2 Mn, agritech startups in India are exploring
opportunities in areas like increasing the crop production, improving the
nutritional value of the crops, in reducing the input prices for farmers, improving
the overall process-driven supply chain and reducing wastage in the distribution
system, among others.

The startups in this space are also leveraging technology in the area of market
linkages such as retail, the B2C and B2B marketplaces and digital agronomy
startups. They are now able to address input challenges of agriculture in India
from the very beginning. Accenture estimates that the digital agriculture services
market will hit the mark of $4.55 Bn by 2020, thus highlighting the ample scope
of growth for agritech startups in the country.

In fact, the central government under the leadership of Prime Minister Narendra
Modi has an aim to double an average farmer’s income by 2022. No wonder,
agritech became the new buzz word in the Indian startup ecosystem in 2017
and a hot topic for discussion in most of the startup conferences and events in
India. Even Taizo Son, younger brother of Masayoshi Son (founder of SoftBank)
launched an accelerator ‘Gastrotope’ to boost the startups working in the ‘farm
to fork’ ecosystem in India.

74 © 2018, Inc42 Media DATALABS

 Hemendra Mathur of Bharat Innovation Fund pointed out the following reasons for
the sudden interest shown by the investors in the agritech space:

Pick-up in entrepreneurial activity in the sector: The entrepreneurial activity in

the Indian agritech space in 2017 reached a new peak. The space currently has
with more than 300 agritech startups working towards solving problems of Indian
agriculture. This number was less than 50 about five years back. It is not just
the number of entrepreneurs who have dived deeply into the sector but also the
quality of entrepreneurs is remarkably superior. A majority of them have tech
background with corporate or business experience ranging from 5 to 20 years.

Emergence of diverse investment themes: Agritech investment themes in 2017

have evolved around supply chain linkages, supply chain efficiency and
transparency by building data gathering and analytic tools, mechanisation, food
nutrition and yield improvement. The global agritech also followed similar themes
with few distinctions such as vertical farming, aeroponics, gene editing, animal
protein substitution etc. The size of each of the India-specific themes as stated
above offers the market opportunity of billions of dollars. India’s $350 Bn
food-and-agro-economy provides non-linear scale opportunity for agritech
startups.

Sustainability of business models: The scale of agritech startups is not driven

by discounts, GMV and eyeballs. For example, the value proposition in case
of direct-to-farm models is the right quality of agri-inputs at the right price at
right time. Likewise, for tractor rental models – it is around optimisation of
assets, efficiency and timeliness of farm operations in labour-starved market.
Clearly, investor money invested in agritech is not going into discounts for
customer acquisition. The investor’s money is typically deployed for building
tech, teams and complimentary farm presence necessary to scale the business
sustainably. Sustainability is integral to agritech business models and that is
the reason most of them have survived without external funding.

Ritu Verma, Ankur Capital

The increasing maturity of digital infrastructure

i.e. mobile penetration in rural India as well
as the growing number of global investments
and M&A’s in the agritech space have played
a key role in this growth. In addition to these
factors, many investors in India who invested
in Quots
the hyperlocal groceries space realised the
inefficiencies of the agriculture output chain,
which then drove them towards agritech.

75 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

DELHI/NCR $796 Mn
City With The Maximum Deals

TRAVELTECH
TOP THREE
BUDGET ACCOMMODATION FUNDINGS
Sub Sector With The Maximum Number of Deals

MAKEMYTRIP
Funding: $330 Mn

TREEBO
Most Active SAIF Funding: $34 Mn
Investor
PARTNERS OYO ROOMS
Funding: $260 Mn

30 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $36 Mn 2017
STATS

76 © 2018, Inc42 Media DATALABS

 In 2017, there hasn’t been any significant change in the total number of deals re-
corded in the traveltech segment, however, the amount grew from $562 Mn in 2016
to reach $769 Mn in 2017. If we break down deals stagewise, it was only growth stage
which witnessed significant change. In 2017, the deals grew by 83% in the growth
stage in comparison to 2016.

TRAVELTECH FUNDING: YoY DEALS AND FUNDING

$800M 40

$600M 30
Amount

of deals
Funding

Total Deals
$400M 20
Funding

Number
Total
Total

$200M 10

0 0
2014 2015 2016 2017

Total
Total Funding
Funding Amount Total of
Number Deals
deals

The average ticket size for the traveltech space has grown tremendously, from
$26 Mn in 2016 to $36 Mn in 2017. However, when we broke down the average
ticket size stagewise, we found that the average ticket size has fallen from a value
of $38 Mn in 2016 to $15 Mn in 2017 for the growth stage while the sector has also
grown from $108 Mn in 2016 to $125 Mn in 2017 in the late stage.

TRAVELTECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $20M $40M $60M $80M $100M $120M $140M

Seed FundingSeed Funding

BridgeBridge
Funding
Funding Growth
Growth StageFunding
Late Stage Late Stage

According to a report by Google India-BCG, the country’s travel market (both offline
and online) is expected to become a $48 Bn industry within the next three years.
Riding on India’s growing tourism wave is a legion of startups that are embracing
emerging technologies to develop innovative solutions in the market. The online
travel space is likely to account for a total transaction of 40% to 50% by 2020, says
an IBEF report. Despite this enormous potential, the Indian online hotel booking
sector has a penetration of only around 19% in the Indian market, as per Deutsche
Bank AG.
77 © 2018, Inc42 Media DATALABS
 70

TOTAL FUNDING

B E N G A LU R U $1.5 Bn
City With The Maximum Deals

TRANSPORTTECH
TOP THREE
C A B AG G R E G ATO R FUNDINGS
Sub Sector With The Maximum Number of Deals

OLACABS
Funding: $1.5 Bn

DRIVEY
Most Active BEENEXT Funding: $10 Mn
Investor
VENTURES GET MY
PARKING
Funding: $4.1 Mn

35 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $68.6 Mn 2017
STATS

78 © 2018, Inc42 Media DATALABS

 The deals in transport-tech have remained stagnant from the last two years. In
2017, a total of just 35 deals were reported and $1.6 Bn was invested in this
sector. If we remove Ola’s $1.1 Bn round from this, then technically, the segment
raised $574 Mn funding which is still a growth by 552% in comparison to 2016.
In 2016, just $88 Mn funding was reported in this segment. In last four years,
transport-tech segment has witnessed $3 Bn of investments across 118 deals.

TRANSPORTTECH FUNDING: YoY DEALS AND FUNDING

$1.5B 33
FundingAmount

of deals
$1B 22
Total Funding

Deals
Number
Total
Total

$0.5B 11

0 0
2014 2015 2016 2017

Total
Total Funding
Funding Amount Total Deals
Number of deals

The overall average ticket size for this segment remained about $68.6 Mn in
2017, courtesy big ticket funding of Ola. It stood at $43 Mn in 2014, then moved
to $44 Mn in 2015 and fell to $3.3 Mn in 2016.

The average ticket size at the seed and growth stage has fallen by 56% and 47%
in comparison to 2016.

TRANSPORTTECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $50M $100M $150M $200M $250M $300M

Seed Funding
Seed Funding BridgeBridge Funding
Funding Growth Stage
Growth Late Stage
Funding Late Stage

79 © 2018, Inc42 Media DATALABS

 72

TOTAL FUNDING

B E N G A LU R U $201 Mn
City With The Maximum Deals

MEDIA &
ENTERTAINMENT
GAMING TOP THREE
FUNDINGS
Sub Sector With The Maximum Number of Deals
NAZARA GAMES
Funding: $79 Mn

Most Active KALAARI SMAASH

Funding: $62 Mn
Investor
CAPITAL PASSION
GAMING
Funding: $37.5 Mn

48 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $7.8 Mn 2017
STATS

80 © 2018, Inc42 Media DATALABS

 Funding in the media and entertainment space fell in 2017 drastically, a meager
48 deals were reported with a value amount of $202 Mn being invested, a decline
by 40% and 22% in terms of the number of deals and total amount respectively in
comparison to 2016. A major fall was also witnessed at the seed stage with just 30
deals being reported from within the sector.

“Since 2014, $923 Mn has been invested in Media and

Entertainment startups across 195 deals”

However, the average ticket size has increased – it stood at $7.8 Mn across stages, a
rise by 32% in comparison to 2016. In 2016, the average ticket was $5.9 Mn.

MEDIA & ENTERTAINMENT FUNDING: YoY AVERAGE DEAL SIZE BY

STAGE

$100M

$90M

$80M

$70M
Average Deal Size

$60M

$50M

$40M

$30M

$20M

$10M

0
2014 2015 2016 2017

SeedFunding
Seed Funding Bridge Funding
Bridge Funding Growth
GrowthStage
Funding LateLate
Stage
Stage

81 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $37 Mn
City With The Maximum Deals

HARDWARE AND IOT

TOP THREE
INTERNET OF THINGS FUNDINGS
Sub Sector With The Maximum Number of Deals

TONBO IMAGING
Funding: $3 Mn

Most Active BLUME FOYR

Funding: $17 Mn
Investor
VENTURES SMART AUTO
SYSTEMS
Funding: $3.8 Mn

30 TOTAL NUMBER
OF DEALS
B2B
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $1.6 Mn 2017
STATS

82 © 2018, Inc42 Media DATALABS

 The hardware and IoT segment witnessed 30 deals and an investment of $37 Mn
in 2017. While the number of deals rose by 11% in comparison to 2016, the funding
amount has fallen by 40% in 2017. The number of deals at different stages remained
consistent in 2017 in comparison 2016. The average ticket size fell down drastically
from $4.4 Mn in 2016 to $1.6 Mn in 2017.

HARDWARE AND IOT FUNDING: YoY DEALS AND FUNDING

$70M 30

$60M 26

$50M 21
Amount

of deals
Funding

$40M 17

Total Deals
Funding

Number
$30M 13
Total
Total

$20M 9

$10M 4

0 0
2014 2015 2016 2017

Total
TotalFunding Amount
Funding Number of deals
Total Deals

HARDWARE AND IOT FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $2M $4M $6M $8M $10M $12M $14M $16M

Seed Funding
Seed FundingBridge Funding
Bridge Funding Growth
Growth Stage Funding

Previously dictated by big players like IBM, Google, Intel, Cisco, Ericsson, Apple and
Amazon, the IoT space has now become a startup ecosystem enabler across the
world. While it was the internet that drove the emergence of ecommerce startups in
the early 2000s, IoT has been facilitating the growth of this decade’s tech startups.
What lightning does to mushrooms, IoT has done to startups!

83 © 2018, Inc42 Media DATALABS

 TOTAL FUNDING

B E N G A LU R U $44 Mn
City With The Maximum Deals

REALESTATE TECH
TOP THREE
CO -W O R K I N G FUNDINGS
Sub Sector With The Maximum Number of Deals
SQUARE YARDS
Funding: $10 Mn

Most Active
MUMBAI ZOLOSTAYS

Investor ANGEL Funding: $5 Mn

NET WORK AWFIS

Funding: $20 Mn

26 TOTAL NUMBER
OF DEALS
B2C
Business Model With
The Maximum Deals

Average Ticket Size

Across Stages $4 Mn 2017
STATS

84 © 2018, Inc42 Media DATALABS

 The funding in this sector has remained consistent over the years. In 2017, only 26
deals were reported with an amount of just $44 Mn being invested. The total
funding amount raised fell down by 51% in comparison to 2016. The sector
witnessed, a significant jump at the seed stage with a rise by 54% in the number of
deals in comparison to 2016. While the average ticket size has fallen from $7.6 Mn in
2016 to $3.9 Mn in 2017.

TRANSPORT TECH FUNDING: YoY DEALS AND FUNDING

$300M 26

$250M 22

$200M 17
Amount

of deals
Funding

Total Deals
$150M 13
Funding

Number
Total
Total

$100M 9

$50M 4

0 0
2014 2015 2016 2017

Total
Total Funding
Funding Amount Total of
Number Deals
deals

The sector, despite a contribution of almost 7% to the country’s GDP, has

largely remained unorganised and one that has not yet been dramatically
transformed by technology. While the introduction of Goods and Services
Tax (GST) and the Real Estate (Regulation and Development) Act (RERA)
have helped bring transparency and accountability to the sector, a number
of tech-enabled startups have also emerged that are working to eliminate
the redundancies currently crippling the Indian real estate industry.
Coworking spaces, one of the sub-sectors in the real estate market, is likely
to be contributing the most to the segment’s growth in 2018. Indian startups
such as Innov8, 91Springboard, Awfis are leading the charts here. But with
WeWork’s India entry, let’s see how 2018 fares out for these startups.

TRANSPORTTECH FUNDING: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M

Seed FundingSeed Funding

BridgeBridge
Funding
Funding Growth
Growth Stage Funding
Late Stage Late Stage

85 © 2018, Inc42 Media DATALABS

 GEOGRAPHY BREAKDOWN
Looking at the level at which the Bengaluru government is boosting the startup
ecosystem in the city with policies and funds, it was quite evident that the city
will turn out to be the clear winner in the funding tables in comparison to the
other cities. Smoothly perched on the top position, Bengaluru scored 366 deals
in 2017 followed by Delhi NCR raking up a total of 223 deals in the same year.
Other major cities such as Mumbai, Hyderabad and Pune took the third, fourth
and the fifth rank respectively.

Even in terms of the total funding being raised, Bengaluru tops the chart with an
outstanding figure of $7.5 Bn funding, here too Indian unicorns like Flipkart and Ola
played magic. The second and third spot in the chart were taken up by Delhi with a
total investment of $4.3 Bn and Mumbai with $582 Mn.

Over the years, Delhi NCR and Bengaluru have been battling to become the
top city in terms of deals with Delhi/NCR having maintained its first spot
consecutively for the years 2015 and 2016 with as many as 305 and 316 deals
respectively. However, the funding deals fell down by 29% for the city in 2017
when compared to 2016. In 2016, the number of deals stood at 316 for Delhi NCR.

Besides these top three cities, other major cities such as Hyderabad, Chennai, Pune
and Kolkata are also gearing up and appears to be quite on track to become thriving
startup hubs for the entrepreneurs in the country.

GEOGRAPHY BREAKDOWN: DEALS ACROSS TOP 3 CITIES

400

300
Deals
Deals
Total of

200
Number

100

0
2014 2015 2016 2017

Bengaluru
Bengaluru Delhi/NCR
Delhi/NCR Mumbai
Mumbai

86 © 2018, Inc42 Media DATALABS

 GEOGRAPHY BREAKDOWN: FUNDING ACROSS TOP 3 CITIES

$8B

$6B
TotalAmount
Deals

$4B
Funding

$2B

0
2014 2015 2016 2017

Bengaluru
Bengaluru Delhi/NCR
Delhi/NCR Mumbai
Mumbai

As far as Tier II and Tier III cities are concerned, since 2014, these cities have
raised a combined funding of $392 Mn across 130 deals. The deals for these cities
have remained consistent over the past four years. However, the major jump was
witnessed in 2016, which witnessed about 52 deals, almost double of what was in
2015.

In context of 2017, about 28 startups in Tier II and Tier III raised $145 Mn in
funding altogether. This amount is way less than 2015 and 2016 which reported
a total funding of $153 Mn and $204 Mn respectively.

87 © 2018, Inc42 Media DATALABS

 BENGALURU

Total Deals
1 366
KEY FACTS 2017

Total Funding
2 $7.5 Bn

Average Deal Size

3 $26 Mn

Top Sector
4 Ecommerce

Top Funded Startups

5 Flipkart, OlaCabs, PhonePe

Most Active Investors

6 Accel Partners, Blume Ventures,
Sequoia Capital

88 © 2018, Inc42 Media DATALABS

 Home to over 6,000 startups according to Angellist, and called as the Silicon Valley
of India, Bengaluru has been one of the top destinations for startups in the
country. Not just startups but the city is also home to a majority of VC firms and
angel investors. Even the biggest startup conferences of the country are also
hosted in this city. With all this boost in the ecosystem of the city – there is no
doubt that Bengaluru is the mecca for startups in India.

Since the year 2014, Bengaluru has witnessed an investment of about $14.05 Bn
across 998 deals. Even as it missed gaining the top slot in the startup funding
deals for the years 2015 and 2016, it still managed to grow positively over the
years. Starting from a total of 97 deals in 2014, the deals grew by 171% in 2015
and it further ended 2016 with 272 deals coupled with an investment of $1.06 Bn.

In terms of stagewise deals, Bengaluru materialised 184 deals at the seed stage of
which 100 were led under Bengaluru government’s ELEVATE 100 program. While
the bridge and growth stage showed an intermittent fall and rise in the number of
deals respectively. However, funding at the late stage has risen for the city. From
13 deals in 2016, the deals grew to 31 in 2017, which is manifestly a rise by 83% in
comparison to 2016.

BENGALURU: YoY DEALS AND FUNDING

$8B 400

$6B 300
Amount

deals
TotalofDeals
Funding

$4B 200
Funding

Number
Total Total

$2B 100

0 0
2014 2015 2016 2017

Total Funding Total Deals

Total Funding Amount Number of deals

89 © 2018, Inc42 Media DATALABS

 As far as the average ticket size is concerned, it grew from $6.7 Mn in 2016 to
$26 Mn in 2017. However, if we do a stagewise breakdown, the average ticket size
for seed funding has fallen drastically by 62%. In 2016, it was estimated at $829K
but in 2017, it dropped to $315K. The late stage average ticket size has risen from
$34 Mn to $223 Mn in 2017 which is a staggering rise by 550%. While, the growth
stage funding has fallen from $12 Mn to $8.6 Mn in 2017.

BENGALURU: YoY AVERAGE DEAL SIZE BY STAGE

$55M

$50M

$45M

$40M

$35M
Size
DealSize

$30M
AverageDeal

$25M
Average

$20M

$15M

$10M

$5M

0
2014 2015 2016 2017

SeedSeed Funding
Funding BridgeFunding
Bridge Funding Growth
GrowthStage
Funding Late Stage
Late Stage

Ranked at 19th among the 25 most hi-tech cities of the world by 2thinknow and
being cited among the top 22 tech cities across the world in affordable living,
as per the Savills Tech Cities Index, Bengaluru is home to most of the Indian
unicorns. Availability of cheaper and some of the youngest tech talents coupled
with the government’s efforts have been beneficial for Bengaluru to emerge as a
top destination for startups and investors.

The rise of Bengaluru city on the global map as a startup hub is an indication of how
the stakeholders in startup and tech community are becoming torch bearers for the
generations ahead. Under the guidance and leadership of Priyank Kharge, Minister
of State IT, BT and Tourism Government of Karnataka, the government has come up
with a number of initiatives to motivate the startup community in Karnataka. No
wonder, the Silicon Valley of India has finally raised its flag with a potential to rise
further in the ranking.

90 © 2018, Inc42 Media DATALABS

 To achieve these ambitious goals, the Bengaluru government came up with a
plethora of initiatives in 2017 alone, some of the initiatives were:

1. In July 2017, the state government launched the ELEVATE 100 programme,
an initiative to identify and support 100 of the most innovative startups
in the state, guiding them to the next level of success. The winners were
given access to the government’s $62.5Mn startup fund, mentoring from
industry experts and support in terms of idea validation, advisory and
legal, etc.

2. In July 2017, the Minister of Industry and Commerce Nirmala Sitharman

revealed plans to set up a Startup Coast in Karnataka in order to facilitate
entrepreneurs in South India.

3. In May 2017, the state’s agriculture department started a $1.5 Mn (INR 10 Cr)
fund for companies in the agritech sector. Plus, it also created a$1.65 Mn
(INR 10.7 Cr) fund to support 26 startups in the biotechnology sector.

4. In March 2017, Priyank Kharge announced a $1.4 Mn fund for women

entrepreneurs.

5. In September 2016, the Karnataka Startup Cell poured $300K (INR 2 Cr) into
eight startups in the tourism sector.

6. In July 2016, it launched a number of schemes, which included a $60 Mn fund

and a startup cell in Karnataka Biotechnology, and Information Technology
Services.

All in all, we can easily say that Bengaluru is growing to become startup
behemoth and we expect a lot more coming out of Bengaluru soon.

91 © 2018, Inc42 Media DATALABS

DELHI/NCR
Total Deals
1 223
KEY FACTS 2017

Total Funding
2 $4.3 Bn

Average Deal Size

3 $33 Mn

Top Sectors
4 Healthtech, Media & Entertainment

Top Funded Startups

5 MakeMyTrip, Paytm, OYO

Most Active Investors

6 Indian Angel Network, Blume Ventures

92 © 2018, Inc42 Media DATALABS

 Since 2014, about $11 Bn has been invested across 924 deals in Delhi NCR
region. Though Delhi NCR managed to be on the second spot, it’s important
to note that deals fell drastically in 2017. The year 2015 had witnessed
305 deals, which grew to 316 in 2016. However in 2017, the deals fell by 30%
in comparison to 2016.

In 2016, the city recorded a total funding of $1.7 Bn, it further grew to reach
$4.3 Bn in 2017. It’s important to note that though funding deals had grown in
2016, the amount raised by startups had fallen by 52% in 2016 in comparison
to 2015.

DELHI NCR FUNDING: YoY DEALS AND FUNDING

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M

Seed FundingSeed Funding Bridge Funding

Bridge Funding Growth Stage
Growth Late Stage
Funding Late Stage

One of the major reasons which gave Bengaluru a lead over Delhi NCR is that while
seed funding grew for Bengaluru, it has come crashing down for Delhi NCR.
The seed funding deals fell by 42% in 2017 in comparison to 2016 and stood at
49 deals for Delhi NCR. Coming to the average deal size, a significant progress
was seen in Delhi NCR. For the year 2017, it stood at $33 Mn. The maximum
uptick was seen at the late stage which grew from $54 Mn to $133 Mn in 2017
for the city.

DELHI: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M

Seed FundingSeed Funding

BridgeBridge
Funding
Funding Growth
Growth Stage Funding
Late Stage Late Stage

93 © 2018, Inc42 Media DATALABS

 MUMBAI
Total Deals
1 145
KEY FACTS 2017

Total Funding
2 $582 Mn

Average Deal Size

3 $6.2 Mn

Top Sector
4 Fintech

Top Funded Startups

5 FreeCharge, Cartrade,
Nazara Technologies

Most Active Investors

6 Venture Catalyst, Matrix Partners

94 © 2018, Inc42 Media DATALABS

 The financial capital of India, Mumbai, has been maintaining its third position
in the Indian tech startup fundings since the past few years now. Growing
significantly since 2015, the total number of deals for the city fell for the year
2017. The funding deals in 2017 fell by 19% and 14% in comparison to 2015
and 2016 respectively. In 2015, the number of deals stood at 180 and in 2016
it was 169. Just $582 Mn was invested across 145 deals in Mumbai in 2017.

MUMBAI FUNDING: YoY DEALS AND FUNDING

$1.2B 166

$1B 138
Amount

$0.8B 111

deals
TotalofDeals
Funding
Funding

$0.6B 83

Number
TotalTotal

$0.4B 55

$0.2B 28

0 0
2014 2015 2016 2017

Total
TotalFunding
FundingAmount Number of deals
Total Deals

Like Delhi NCR, one of the major reasons responsible for the fall in deals for
Mumbai is the fall of seed funding deals, which reported a decline of 32% in
comparison to 2016. Similarly, the late stage deals also saw a drop down,
almost 20% in comparison to 2016. As far as average ticket size is concerned
for Mumbai-based startups, it fell down from $9.1 Mn in 2016 to $6.1 Mn in 2017.

MUMBAI: YoY AVERAGE DEAL SIZE BY STAGE

2017
2016
2015
2014

0 $10M $20M $30M $40M $50M $60M

Seed Funding Bridge Funding Growth Stage Late Stage

Seed Funding Bridge Funding Growth Funding Late Stage

95 © 2018, Inc42 Media DATALABS

 HYDERABAD

Total Deals
1 36
KEY FACTS 2017

Total Funding
2 $350 Mn

Average Deal Size

3 $26 Mn

Top Sector
4 Healthtech

Top Funded Startups

5 NowFloats, HealthCare at HOME,
Simility

Most Active Investors

6 Corvus Ventures

96 © 2018, Inc42 Media DATALABS

 Funding in Hyderabad has been consistent over the past three years. In 2017,
an investment of $350 Mn was made in Hyderabad-based startups across
36 deals. While the number of deals are quite equivalent to what they were
in 2015 and 2016, however, the funding amount rose significantly comparison
to 2015 and 2016 respectively.

Coming to the stagewise breakdown of the number of deals, we found that

while seed funding has fallen down, the deals at growth and late stage
showed remarkable jump. Even the average ticket size has also rose from
$11 Mn in 2016 to $15 Mn in 2017. No matter, even if funding is falling down
for the city of Nawabs, the growing ticket size and the rising growth stage
deals points to the fact that Hyderabad will continue to shine.

HYDERABAD FUNDING: YoY DEALS AND FUNDING

$400M 40

$300M 30
Total Funding Amount

deals
TotalofDeals
Total Funding

$200M 20
Number

$100M 10

0 0
2014 2015 2016 2017

Total
TotalFunding
FundingAmount Number of deals
Total Deals

97 © 2018, Inc42 Media DATALABS

 PUNE
Total Deals
1 28
KEY FACTS 2017

Total Funding
2 $136 Mn

Average Deal Size

3 $8.5 Mn

Top Sector
4 Fintech

Top Funded Startups

5 Agrostar, MarketsandMarkets,
Mindtickle

Most Active Investors

6 Accel Partners

98 © 2018, Inc42 Media DATALABS

 Though Pune showed a growth potential during the period 2015-2016, the
deals came crashing down by almost 15% and 33% in 2017 in comparison
to the years 2015 and 2016 respectively. In 2017, about $135 Mn was invested
across 28 deals. After showing a considerable jump in 2015 and 2016,
which reported 33 and 42 deals respectively, the year 2017 wasn’t good
at all for Pune.

“Since 2014, Pune-based startups have raised $667 Mn funding

across 115 deals”

Same was the status of funding amount being invested in the Pune-based
startups. In 2015 and 2016 about $174 Mn and $187 Mn was invested.

PUNE FUNDING: YoY DEALS AND FUNDING

$200M 45

$150M 34
Total Funding Amount

deals
TotalofDeals
Total Funding

$100M 23
Number

$50M 11

0 0
2014 2015 2016 2017

Total
TotalFunding
FundingAmount Number of deals
Total Deals

99 © 2018, Inc42 Media DATALABS

 CHENNAI
Total Deals
1 23
KEY FACTS 2017

Total Funding
2 $77 Mn

Average Deal Size

3 $4 Mn

Top Sector
4 AI and Big Data

Top Funded Startups

5 TicketNew, CreditMantri, Netmeds

Most Active Investors

6 IDG Ventures

100 © 2018, Inc42 Media DATALABS

 Standing at the sixth position in terms of the number deals, the SaaS hub
of India, Chennai truly is the true potential base of startups in India. Though
the number of deals and total funding amount have fallen drastically for the
year 2017, 27% in terms of the deals and 70% in terms of the amount being
invested in comparison to 2016.

“Since 2014, 105 Chennai-based startups have combinedly raised

$763 Mn”

In 2017, about 23 deals took place in Chennai with the investment of about
$77 Mn. In 2015 and 2016, these number stood at 37 with $400 Mn funding
and 31 deals with $262 Mn funding respectively.

CHENNAI FUNDING: YoY DEALS AND FUNDING

$400M 36

$300M 27
Amount

of deals
Funding

Total Deals
Funding

$200M 18
Number
Total
Total

$100M 9

0 0
2014 2015 2016 2017

TotalFunding
Total FundingAmount Total Deals
Number of deals

101 © 2018, Inc42 Media DATALABS

 TIER II/TIER III

Total Deals
1 28
KEY FACTS 2017

Total Funding
2 $145 Mn

Average Deal Size

3 $10 Mn

Top Sector
4 Enterprise Services

Top Funded Startups

5 Pi Datacenters, Passion Gaming,
TeaBox

Most Active Investors

6 Omidyar Network, Village Capital

Top 3 Cities
7 Indore, Jaipur, Kochi
102 © 2018, Inc42 Media DATALABS
 Looking at the way state governments in Tier II and Tier III cities have been pushing
the startup ecosystem, it was believed that the status of these cities will improve.
However, funding trends say otherwise. In 2016, the funding charts showed a rise of
92% in the funding deals in comparison to 2015. However, the year 2017 witnessed a
downfall.

In 2017, Tier II and Tier III cities reported a downfall in deals by 46% in comparison
to 2016. Just 28 deals were reported in these cities. However, the average ticket size
for startups in these cities soared and stood at $10 Mn in 2017 which is a rise by
1000% in comparison to 2017.

TIER II AND TIER III CITIES FUNDING: YoY DEALS AND FUNDING

$150M 52
Amount

$100M 34

of deals
Funding

Total Deals
Funding

Number
TotalTotal

$50M 17

0 0
2014 2015 2016 2017

Total
TotalFunding
FundingAmount Number of deals
Total Deals

103 © 2018, Inc42 Media DATALABS

 Hemendra Mathur, Bharat Innovation Fund

The biggest bottleneck for Tier II and Tier III startups is

access to talent particularly – tech talent which is not easily
available. Even startups in cities like Delhi NCR and Mumbai
have tech teams sitting in Bengaluru to ensure ready access
to quality talent. The overall ecosystem in the smaller cities
is lagging by at least a few years vis-a-vis metros. State
governments and public institutions in smaller cities have
to take lead in building the ecosystem to attract capital.

Sanjay Swamy, Prime Venture Partners

I strongly believe that the place to be is Bengaluru or Delhi

I strongly encourage entrepreneurs to pick these cities as
the talent pool and ecosystem is very strong. Being a tech
entrepreneur is challenging – and the best talent is
essential and access to this talent should be the
only criterion used in locating one’s company. That being
said, cities like Jaipur, Hyderabad, Vizag are taking major
steps in incentivising startups – and I fully would expect
some good companies to come out of these cities.

Siddharth Talwar, Lightbox Ventures

Honestly, you can build a startup in just about in any

Indian city. But it’s not easy. You have to find talent,
get investor attention, raise capital (unfortunately, just
getting investors on a flight to come and see you will
be an process). Of course, it’s also a huge opportunity
for any investor ready to make the trip. Just ask the
investors of businesses like Milk Mantra!

104 © 2018, Inc42 Media DATALABS

 Sanjay Mehta, CORE Media

I do not think Indian Tier II and Tier III cities have the required
resources to see venture capital grow. While there might few
exception but it’s not the new normal. We lack the complete
ecosystem required for startups to thrive in these cities
starting from talent to customers to investments.

Ritu Verma, Ankur Capital

In my experience, these cities are still far off. They are

great hot-beds for entrepreneurs and great markets, but
to house a company the ecosystem is weak. We have
investments in these cities and we see how talent,
services are harder to find.

Dr. Apoorv Ranjan Sharma, Venture Catalysts

I believe, that in the subsequent years, Tier II and Tier III

cities like Ahmedabad, Jaipur, Lucknow, Raipur, Surat, and
Nagpur will take the lead as far as angel investing and
funding volumes is concerned.

105 © 2018, Inc42 Media DATALABS

 INVESTOR BREADOWN
The fall in the number of deals is directly proportional to the number of investors
participating in the funding activity. While, since 2014 onwards, the number of
investors participating in the Indian tech startup ecosystem have been rising,
however, 2017 witnessed signs of falling investor participation which continued
throughout the year.

In 2014, over 241 investors participated in the Indian tech startup funding. This
number grew by 270% to reach 909 in 2015 and further grew in 2016, with over
1,162 investors who participated in the funding. However, the number fell down to
1,078 in 2017 which is a decline of 7% in comparison to 2016.

One of the major factors that caused the rise in the number of investors in the
intermittent years is the increasing participation of angel investors in the startup
funding activity. This number grew from 106 in 2014, reached to an all-time high
of 653 in 2016 and fell by 22% in 2017 and stood at 512.

Moving on to VCs, the number has been growing at a slow rate since 2015. While
there was a significant jump in 2015 which saw a rise by 220% compared to 2014
and has remained under 300 since then. The VC participation number grew from
249 in 2016 to 298 in 2017.

And just like the VC funds, an increased participation of corporates and startups
investing in startups have also been witnessed. The number of corporates
participating in funding in 2014 stood at 50 and it grew at a staggering rate to
touch 198 mark in 2017. Over the years, the participation of family funds in the
startup funding space has also increased.

INVESTOR BREAKDOWN: YoY SPLIT OF ACTIVE INVESTORS BY

TYPE
2014
2015
2016
2017

0 10 20 30 40 50 60 70 80 90 100

Angel Investor Angel Network Corporate

Angel Investor Angel Network CorporateVentureVenture
Capital Others
Captial Other

106 © 2018, Inc42 Media DATALABS

 INVESTOR
PARTICIPATION SPLIT

Analysing the different types of investors participating in the deals can give out
interesting insights about the startup ecosystem.

In 2014, venture capital firms participated in 291 deals (33% of the total)
while angel investors participated in 135 (15% of the total). However, this
number went upside down for the years 2016 and 2015 i.e. proportion of the
participation by venture capital firms in the number of deals came down in
comparison to the angel investors. In 2015, venture capital firms participated
in 711 deals while angels participated in 749 deals. The gap between the two
grew more in 2016 with angel investors having participated in 896 deals and
venture firms having participated in 634 deals. There were over 235 deals
in which both of them participated. This was the time when VCs started
participating in seed and bridge funding deals and rising participation of
angels in growth stage deals.

However, the trend changed in 2017. There were a total of 601 deals that saw
angel participation while venture capital participation was reported in
650 deals.

Coming to the other type of investors i.e. corporates, there participating in

startup funding deals have increased from 110 deals in 2014 to 264 in 2017
which is a rise by 140%. Similar are the trends for angel networks and
platforms too, whose participation has increased from just 15 deals in 2014
to 69 in 2017.

YoY INVESTOR PARTICIPATION SPLIT ACROSS DEALS

800

600
Total Deals

400

200

0
2014 2015 2016 2017

Angel Investor
Angel Investor Venture Capital
Venture Capital Angel
Angel Network Corporate
Network Corporate
Other
Others

107 © 2018, Inc42 Media DATALABS

 ANGEL INVESTORS

In layman terms, an angel investor is an individual who provides capital to a

startup in his personal capacity in exchange for equity or convertible debt. Over
the years, we have seen a lot of individuals wearing the title of angel investor and
dipping their feet in the startup ecosystem. Starting from 106 in 2014, the number
grew at the highest with over 653 in 2016 and came down tumbling in 2017 by 22%
and stood at 512.

As mentioned in the previous section, though angel participation in the deals rose
in 2015 and 2016, however, it fell down in 2017. India has seen an addition of new
angel investors every year at a mammoth rate. For instance, in 2015, as many
as 478 new angels were added in the Indian startup ecosystem and this number
jumped to 533 in 2016. However, the figure came down to 433 in 2017.

YoY ANGEL COMPOSITION IN TOTAL DEALS

50%

45%

40%
% COMPOSITION IN TOTAL DEALS

35%

30%

25%

20%

15%

10%

5%

0
2014 2015 2016 2017

2014 2015 2016 2017

108 © 2018, Inc42 Media DATALABS

 THE CHANGING ROLE OF
ANGEL INVESTORS

Traditionally, angels used to participate in a deal based on their interest or

passion in a particular sector or field, so that they can provide their invaluable
feedback, support and expertise to the startups about the market, potential
customers and competition and overall guidance. These angels play an active
role in the startup’s success story by helping them in their difficult times as well
as help in raising the next round of investment. These are the set of angels who
are much more organised in their approach and hand-holding of the startups.
The number of such angels has remained consistent over the year.

Then the next breed of angels are the ones who are actually High Networth
Individuals (HNIs) and are investing actively. Frequency of their investments
ranges between 4-5 deals a year. Besides investing, they might or might not
get involved in the startup’s journey. The number of such angels has grown
significantly over the years.

Then, there are the tourist angels, who entered the startup investing arena in
the 2015-2016 era and made about 1-2 deals, burnt their hands and finally, made
an exit from investing. These angels are the reason why startup funding in seed
stage saw an enormous upsurge during 2015-2016. The worst part about raising
money from such angels is that they usually do not play any role in the startup’s
lifecycle.

Our data shows that of the total number of angels who have ever participated
in the Indian startup ecosystem since 2014 i.e. 1,777, over 1410 have made
just a single deal and about 192 have made two. This figure came along with
175 angels who participated in three or more deals.

ANGEL INVESTOR DISTRIBUTION BY DEALS

9.85%

10.80%

Angel Investor Distribution

By Number of Deals

79.35%

Investors With 1 Deal Investors With 2 Deal

Investors With 3 or More Deal

109 © 2018, Inc42 Media DATALABS

 One of the most successful angel investors in India, Sanjay Mehta shared his inputs
on these changing dynamics of angel investments in India.

On rise of angel investors in India: Being angel investor is a glamour tag for many
of the first time angels who entered into startup investments in 2015-16 then
they realised it’s hard work and continuous mentoring engagement with
founders. Majority of these investors have financial or business background and
less of tech understanding while most the startups are technology companies
hence evaluation becomes a challenge. Another struggle for these new investors
is non-availability of operating history or sector performance as they compare
and apply their investment experience in listed markets to startups.

On his approach and thesis: I believe that it’s difficult to pick winners at seed stage
investment so I take a portfolio approach. My learning is that if you invest in 20
companies your capital is returned. If you invest in 30+ companies you can expect
3-5X returns and if you invest in 50+ companies then 10X+ is what can be expected
over 10 years investment cycle. I always keep 2 cheques for my every investment
I make and would double down in the next round if I believe it’s a delivering great
alpha.

On rising B2B deals at seed stage: B2B startups are unsexy and scaling up takes
time so most of the money from VCs still go to B2C startups as they are more
hungry for resources and hence their valuations skyrocket faster. Investors who
have burnt their hands with B2C investments are looking to B2B investments as
they want to play safe. India consumption story is still intact and more
opportunities will emerge with Aadhaar playing a pivot role.

On increasing angel participation at bridge and growth stage: I have seen multiple
bridge rounds getting fully subscribed where lead investors have shown confidence
and are putting money in the bridge round. There have been a couple of deals
done in angel space where valuations of Series A have been offered because of
the team and the IP.

Dr Apoorv R. Sharma, Venture Catalysts

When it comes to seed funding deals, the ticket

size of investments by big corporates, family
offices, and ultra-HNIs is considerably higher due
to their greater risk appetite and liquidity. Thus,
a startup’s requirement for funds is easily met by
only a handful of HNIs, because of which, small
investors who wish to participate in these funding
rounds but have a low-risk appetite, are often
unable to do so. This is why more small investors
are now choosing to invest lower sums in bridge
and growth stage funding deals instead.

110 © 2018, Inc42 Media DATALABS

 Manish Singhal, Pi Ventures

Overall, I think the Indian ecosystem owes some decent

returns to the angel ecosystem. There is money going
in and hardly any coming out. Once this constipation
releases, it will make the risk money more easily
available for early stages.
Quots

K Ganesh, GrowthStory

This is because angels have burnt their fingers in deals

coming in very early and seeing the companies shut
down for lack of subsequent funding. So, investing
slightly in the later stage reduces the risk albeit
investing at a higher price. Also ensures that there are
otherinvestors and a larger pool of capital to build
the business. Seed deals are attractive in terms
of price but carry higher risk.

Hemendra Mathur, Bharat Innovation Fund

The risk is maximum at the seed stage, hence many

angels are hesitant to write the first cheque. Some risks
are addressed at bridge or the Pre-Series A stage because
of more visibility of product, customer and product-market
fit. Hence, you see more angel participation in the bridge
and growth rounds. Also, most angels prefer to invest
where they can add value to investment or where there
are co-investment partners to share the early-stage risk.

111 © 2018, Inc42 Media DATALABS

 TOP
ANGEL
INVESTORS
10
2017

112 © 2018, Inc42 Media DATALABS

 Rajan Anandan
1 Vice President, South East Asia and India, Google
Investments
8
2 Girish Mathrubootham
Founder & CEO, Freshworks
Investments
6
3 Satveer Singh Thakral
CEO, Singapore Angel Network
Investments
6
4 Anand Chandrasekaran
Director, Product/Platforms, Facebook
Investments
5
5 Kunal Shah
Founder, FreeCharge
Investments
5
6 Apurva Chamaria
Head, Corporate Marketing, HCL
Investments
4
7 Mohandas Pai
Chairman, Aarin Capital
Investments
4
8 Nandan Nilekani
Co-Founder, Infosys
Investments
4
9 Sanjay Mehta
Community Director, CORE
Investments
4
10 Sunil Kalra
Managing Director, ViaProjects
Investments
4

113 © 2018, Inc42 Media DATALABS

 PLATFORMS AND
ANGEL NETWORKS
The launch of several angel networks and platforms is one of the major reasons that
have boosted angel investor participation in the startup funding. India is home to
some 30+ angel networks and platforms that on one side act as a deal source for
investors and on the other provide startups with an access to a pool of investors.

While in 2014, there were just eight platforms that enabled startup funding,
the year 2017 saw some 30 networks and platforms coming into play. In terms
of number of deals, in 2017, these platforms participated in 70+ deals, this was
even higher in 2016 when 96 deals were closed via such platforms. In 2017, Venture
Catalysts was the most active platform. It participated in 33 deals.

PLATFORMS AND ANGEL NETWORKS PARTICIPATION IN 2017

Total Active Most Active Total Deals

30 VCats, IAN, CAN 70+

Another major change is that these platforms and networks have opened doors
for High Networth Individuals (HNIs) from across India and especially from Tier II
and Tier III cities who are interested to invest in startups. Local angel networks
such as The Chennai Angel Network, Chandigarh Angel Network (CAN), etc.
have also given a boost to the ecosystem of investors at a local level
by bringing them together to boost the funding activity in these cities.
For instance, Chandigarh Angel Network invested in eight startups in
2017. Similarly, since its inception in 2007, The Chennai Angels has invested
$7.5 Mn across 37 startups (as per its website).

Native Angels Network

Cross Border Angels & Experts Calcutta Angels Network

Chandigarh Angel Network The Chennai Angels

Venture Catalyst
1Crowd

Indian Angel Network ah! Ventures

Social Alpha

Hyderabad Angels
Mumbai Angels Let’s Venture Sprout Angels
Globevestor Lead Angel Network
Keiretsu Forum CIO Angel Network Emerging India
DeNa Networks JITO Angels
Rajasthan Angel Innovators Network

114 © 2018, Inc42 Media DATALABS

 VENTURE CAPITAL FIRMS

VC investments in Indian startups have seen a lot of change in the past few years.
Over 302 VC firms participated in 650 deals in 2017 alone. After some digging into
historical VC investments, we found many interesting facts to highlight:

1. From 70 active VC firms in 2014, this number grew to 230 in 2015 and 253
in 2016. In 2017, this number jumped by 19.3% to 302 active VCs.

2. The number of deals that VCs have participated in, has grown over
the years. Starting with a figure of 291 in 2014, the number grew to a
staggering figure of 711 in 2015. However, it fell to 634 in 2016. But, it
reported a small hike in 2017, with 650 deals.

3. Over the years, VC participation in seed funding has also increased.

While in 2014, 18.5% of the total VCs participated in seed funding, this
number reached 38.74% in 2017.

4. If we look at the percentage of VC investors in comparison to the total

investors who participated in the funding, the facts are astonishing. In
2014, of the total number of investors, 29% were VCs. This number fell
down in both 2015 and 2016 and stood at 25.3% and 21.77% respectively.
However, the number bounced back in 2017 with over 28% investors
being VCs.

5. The VC participation in late stage funding has also grown by 10% in

2017 in comparison to 2016. The number has been increasing since 2014,
with 67 and 61 VCs participating in late stage funding in 2015 and 2016
respectively.

YoY VC COMPOSITION IN TOTAL DEALS

55%

50%

45%
% COMPOSITION IN TOTAL DEALS

40%

35%

30%

25%

20%

15%

10%

5%

0
2014 2015 2016 2017

2014 2015 2016 2017

115 © 2018, Inc42 Media DATALABS

TOP
VENTURE
CAPITAL FIRMS
10
2017

116 © 2018, Inc42 Media DATALABS

 1 Accel Partners India 25
Investments

2 Blume Ventures 20
Investments

3 Sequoia Capital India 20

Investments

4 IDG Ventures 19
Investments

5 Kalaari Capital 15
Investments

6 Matrix Partners India 14

Investments

7 3one4 Capital 13
Investments

8 Nexus Venture Partners 11

Investments

9 SAIF Partners 10
Investments

Bessemer Venture 9
10 Partners
Investments

117 © 2018, Inc42 Media DATALABS

 YoY VC PARTICIPATION ACROSS STAGES
2017
2016
2015
2014

0 20 40 60 80 100

Seed Funding Bridge Funding Growth Funding Late Stage

YoY VC PARTICIPATION ACROSS BUSINESS MODELS

2017
2016
2015
2014

0 50 100 150 200 250 300 350

B2B B2C B2B/B2C

NEW STARTUP FUNDS

Over 34 new startup fund launches were announced in India in the year 2017 with
a combined corpus of $2.3 Bn. Out of all these 34 funds, 24 have already raised
over $943 Mn to invest in Indian startups. While 21 were announced by different
corporates and 6 were by the Indian government or government-led bodies.

Besides these new funds, over 14 existing funds raised new funds or disclosed
plans of raising a new fund with a combined corpus of $986 Mn. Out of these, nine
have already raised an astonishing $343 Mn. Looking at the propensity with which
these funds are being raised, it appears a lot of fund infusion is going to take
place in the Indian startup ecosystem in 2018.

118 © 2018, Inc42 Media DATALABS

STARTUP FUNDS ANNOUNCED IN 2017

Fund Name Month Fund Type Fund Size (USD) Focus Launch Status

021 Capital Aug Others 2,000,000 N/A To Be Launched

To Be Launched

3737 North Capital Sep Corporate N/A Technology To Be Launched

To Be Launched

Alteria Capital Aug Corporate 157,000,000 N/A Launched

Launched

Idea2PoC fund Mar Government 1,400,000 Technology Launched

Launched

Invent Apr Government 1,140,000 Technology Launched

Orbis Capital Feb Corporate 100,000,000 Consumer Internet To Be Launched

Unitary Helion May Others 100,000,000 Fintech Launched

Xiaomi Startup Fund Aug Corporate 100,000,000 N/A To Be Launched

Goa Startup Fund May Government 25,800,000 IT Sector Launched

Launched

IAN Startup Fund Apr Corporate 54,400,000 N/A Launched

Launched

March Capital Partners Nov Corporate N/A N/A To Be Launched

To Be Launched

AWE FUND 1 Sep Corporate 25,000,000 N/A Launched

Launched

Epiq Capital India Fund Nov Corporate 250,000,000 Technology Launched

Launched

Equanimity Investments Oct Corporate 15,400,000 Technology Launched

Launched

IFAF Feb Corporate 8,000,000 Agritech Launched

Launched

Iron Pillar India Fund I May Corporate 20,000,000 Technology Launched

Launched

Billennium Divas Angel Fund Nov Corporate N/A N/A Launched

Launched

119 © 2018, Inc42 Media DATALABS

STARTUP FUNDS ANNOUNCED IN 2017

Fund Name Month Fund Type Fund Size (USD) Focus Launch Status

35North India Growth Fund Jul Corporate 20,800,000 N/A Launched

Airbus Ventures Partners India Fund Jul Corporate N/A Renewable & Electric Energy Launched

Alacrity India Startup Fund Nov Others 10,000,000 N/A Launched

Andhra Pradesh Startup Fund Sep Government N/A N/A Launched

Growth Of Family Funds Dec Family Fund 7,760,000 AI & Big Data To Be Launched

HDFC Bank Startup Fund Nov Corporate 30,000,000 N/A To Be Launched

ICubesWire Innovation Fund Sep Corporate N/A Technology Launched

Lodha Developers Startup Capital Jan Corporate 7,300,000 Real Estate Launched

MPVFL Jun Government 15,400,000 N/A Launched

Numaligarh Refinery Startup Fund Jul Corporate 1,500,000 IT & ITES Launched

OMA Emirates FinTech Fund Aug Corporate 23,000,000 FinTech Launched

Pankh - Oil PSU GAIL Fund Jul Government 7,700,000 N/A Launched

Sandeep Aggarwal Family Fund Jun Family Fund 3,000,000 N/A To be Launched

Stellaris Venture Partners Feb Corporate 100,000,000 Hyperlocal Launched

The Fundamentum Partnership Jul Others 200,000,000 Technology To be Launched

Trend Micro Startup Fund Jun Corporate 100,000,000 IOT Launched

VC Fund Vedanta Group Founder Oct Others 1,000,000,000 Fintech To be Launched

120 © 2018, Inc42 Media DATALABS

 M&A OVERVIEW
In 2017, over 133 M&As were reported in the Indian Tech startup ecosystem.
Starting with 117 in 2015, the number grew by 32% in 2016 and then fell down
in 2017 by 14%. Google making its first acquisition in India was one of the
most interesting things which happened in 2017. The tech giant acquired
four-month-old, Bengaluru-based startup Hailli Labs.

M&A: YoY OVERVIEW

150
Total Deals

100

50

0
2015
2015 2016
2016 2017
2017

Since 2015, over-funding at the seed stage and the inability to raise funding or scale
any further has led to these startups in being acquired or acqui-hired by a larger
company or led to two smaller companies getting merged at the initial stage itself.
Now investors use the startup acquisitions or mergers as the resort for startups
who get tangled into massive cash burn or in a bid to build a larger company. In
the past few years, only a few high profile M&As have taken place in the Indian
tech startup ecosystem including – Foodpanda India and Ola, Ola and TaxiForSure,
Snapdeal and Freecharge, Ibibo and MakeMyTrip, Flipkart acquiring Jabong and
eBay India, etc.

M&A DISTRIBUTION BY TYPE FOR 2017

4

43

Number of Deals

86

Acqi-Hire Acquired Merger

121 © 2018, Inc42 Media DATALABS

 CORPORATE STARTUP
FRATERNISATION
A corporate is a large company or group authorised to act as a single entity and
recognised as such by law. It is autonomous in nature, in its decisions and actions.
This gives corporates a huge power and authority over the market.
As Spiderman said, “With great power comes great responsibilities.” Just like
Spiderman defends the city, the corporates are morally tasked with defending
the market. Although, corporate participation in startup funding has gradually
increased since 2015, we can now observe the corporates taking responsibility to
not only invest but to also nurture the Indian startup ecosystem.

Out of the total unique investors in 2015, 14.5% of the investors were corporates and
in 2017, the number stands at 18.4%. Not just this but of the 34 new startup funds
launched in 2017, over 21 were announced by the corporate sector.

CORPORATE PARTICIPATION

Funds Launched Most Active Total Deals

21 198 264

It’s not that corporates are just acting as investors for startups. There are a lot
more avenues that corporates are using to tap into the startup ecosystem apart
from just funding. For instance, our data on accelerator and incubator launches
reveal that over 72% of these were launched by corporates in 2017.

Though the motivation provided by the corporate sector is high, what we miss
seeing is the corporate participation at the M&A level. India hasn’t seen any
corporate looking at startups for the M&A route.

In need of fresh ideas and digital talent, corporates in India have actively
started searching or working with startup partners of all stages and verticals.
Corporates may have a huge customer-base on their lists but collaboration with
startups allow them to stay relevant to their customers, besides getting access
to innovative products and services. Also, via such collaborations, corporates
get an opportunity to gain new ideas to implement in their existing business.

However, there are challenges too, when these two entities which are
totally different in nature work together. Startups usually have a unique
way of operating and when they work with corporates and in a corporate
environment, it ends up creating friction. Corporates being a stronger party
brings in their ‘my way my highway’ philosophy which further complicates
the working relationship. The only key to this problem is clearly setting out
rules which both agree on.

122 © 2018, Inc42 Media DATALABS

 STARTUP INDIA OVERVIEW
The Indian startup ecosystem has been governed majorly by enablers such as
VCs, investors, coworking spaces, angels and corporates. The year 2017 witnessed
the Indian government bringing all these together on a single platform via
initiatives such as Startup India Hub and plans for state rankings. Although the
initiatives such as Fund Of Funds, Tax exemptions, Tinkering Labs or patent
guidelines, had an huge impact. For instance, the change in startup definition and
the inclusion of ‘Job criterion’ to avail startup India benefits can be counted as
significant steps taken in this direction.

Continuing with the government’s focus on startups, Prime Minister Narendra Modi
along with the Prime Minister of Israel, Benjamin Netanyahu launched a bilateral
innovation challenge for startups in Israel and India – India-Israel Innovation Bridge.
On similar lines, while pitching India as a business-friendly nation, Prime Minister
Modi asked the CEOs of Amazon, Google, Microsoft, Apple, among others to invest in
India during his US visit in June 2017.

STARTUP INDIA: KEY FACTS

Startup Recognised Startups Granted Startups Funded

6,186 Tax Exemptions 75
74

In a similar vein, Champions Of Change event was also organised in August, where
PM Modi met over 200 startup entrepreneurs in order to create a dialogue between
the government and startups, particularly to get them in sync with the PM’s mission
of a ‘New India by 2022’. Which indeed received immense appreciation from the
startup and the investor community.

As far as the Startup India programme is concerned, over 6,186 startups have been
recognised by the department, while Under the Fund of Funds for startups, 75 have
received funding to the tune of $52 Mn (INR 337.02 Cr), while a total of 74 startups
have been recognised to avail tax exemption under Section 80 IAC of the Income Tax
Act.

Be it the promotion of Digital India campaign or the vision of becoming an

Electric Vehicle nation by 2030 or even brainstorming over the cleantech issues
such as hybrid fuel, the Indian government was seen involved in the groundwork
aggressively with local as well as foreign startups.

The Indian government’s recent attempts to build exchange programmes with

foreign startups in countries like Germany and the SAARC nations, will further
open new doors of opportunities for the stakeholders in the startup ecosystem.
The present Indian government still has around an year before a new regime
comes to power. So, we can expect more positive changes in the current policies
to bolster the opportunities for Indian startups.

123 © 2018, Inc42 Media DATALABS

 THE RISE OF ACCELERATORS
AND INCUBATORS
The year 2017 has seen an increased launch of new accelerators and incubators
in India. In totality, over 35 incubators and accelerators were launched in 2017
itself.

Overall, there are some 70+ accelerators and 200+ incubators in India that are
helping startups in accelerating their growth or to boost their initial journey from
the idea stage. They act as a great support system for startups and give them access
to resources, technical support, clients or customers, mentors and advisors to help
startups nurture their ideas. As far as sectors are concerned, most of these are
sector-agnostic and are being launched by the corporate, independent
organisations, education institutions, government-supported bodies, etc.

NEW ACCELERATORS AND INCUBATORS LAUNCHED IN 2017

Total Govt. Led/Funded By Corporates

35 7 11

In terms of accelerators, over 300+ startups were accelerated in 2017. These are
the ones who completed or joined the accelerator during this phase. Not just
domestic, but a large number of international accelerators have also been
tapping India to be part of the growth story, for instance, Y Combinator,
Techstars and 500 Startups. While both Y Combinator and Techstars have
been present in India for long, Y Combinator participation has increased from
2016 after it did its first office hours in the country and continued the growth
in 2017 too. The accelerator has even increased the number of Indian startups
in its recent batches. Similarly, Colorado-based startup accelerator Techstars
announced the launch of its India operations as a joint venture with ANSR and
it will offer in-house centres and corporate accelerator program for global
corporations in India.

Of the total number of new accelerators launched in 2017, most of the accelerators
are focussed on fintech, enterprise tech, AI and Big data. Interestingly, most of
the newly launched accelerators are corporate accelerators and are based out of
Bengaluru.

Coming to the details of incubators launched in 2017, over nine of them were
launched by the corporates and seven by the government (local, national). A
majority of these incubators are based out of Delhi NCR.

124 © 2018, Inc42 Media DATALABS

 THE INDIAN UNICORNS
An animal resembling a horse with a single horn on its forehead, a unicorn may be
termed as a mythological creature, however in the world of startups, they do exist.
Companies having a valuation of $1 Bn or more are termed as unicorns. According to
Pitchbook, across the globe, 57 startups attained the unicorn status in 2017. But if we
talk about India, only one startup entered the unicorn club in 2017. Rather one of the
unicorns, Snapdeal, seems to have lost its unicorn title. The existing Indian unicorns
did achieve new levels of glory in 2017. Let’s take a look at the Indian unicorns.

2010 In: 2010

Founded In:Founded 2010 In: 2010
Founded In:Founded

Sector Sector Sector Sector

1 1
EcommerceEcommerce 1 1
EcommerceEcommerce

Key Investors
Key Investors
SoftBank, Naspers, Tiger
SoftBank, Global
Naspers, Tiger Global Key Investors
Key Investors
2 2
Management,
eBay, Steadview
Microsoft, Tencent,
Management, Microsoft, Tencent,
Capital, DST
eBay, Steadview Capital, DST
2 2
Intel, SoftBank,
Intel,Kalaari
Nexus Venture
NexusPartners
Capital,
SoftBank, Kalaari Capital,
Venture Partners
Global, Accel Partners
Global, Accel Partners

Total Funding Raised

Total Till Date
Funding Raised Till Date Total Funding Raised
Total Till Date
Funding Raised Till Date
3 3
$7.27 Bn $7.27 Bn 3 $1.8 Bn3 $1.8 Bn

Tagged As Unicorn
TaggedInAs Unicorn In Tagged As Unicorn
TaggedInAs Unicorn In
4 2012 4 2012 4 2014 4 2014

Current Valuation
Current Valuation Current Valuation
Current Valuation
5 5
$11.6 Bn $11.6 Bn 5 5
Under $1 Bn
Under $1 Bn

2010 In: 2010

Founded In:Founded 2007 In: 2007
Founded In:Founded

Sector Sector Sector Sector

1 FinTech1 FinTech 1 AdTech 1 AdTech

Key Investors
Key Investors
2 2 Alibaba
Key Investors
SoftBank,
Key Investors
SoftBank, Alibaba 2 2
SoftBank, Kleiner Perkins
SoftBank,
Caufield & Caufield
Byers
Kleiner Perkins
& Byers

Total Funding Raised

Total Till Date
Funding Raised Till Date Total Funding Raised
Total Till Date
Funding Raised Till Date
3 3
$2.18 Bn $2.18 Bn 3 $320 Mn3 $320 Mn

Tagged As Unicorn
TaggedInAs Unicorn In Tagged As Unicorn
TaggedInAs Unicorn In
4 2015 4 2015 4 2014 4 2014

Current Valuation Current Valuation

5 $7 Bn 5 Current Valuation
$7 Bn 5 $1 Bn 5 Current Valuation
$1 Bn

125 © 2018, Inc42 Media DATALABS

 Founded In: 2012
Founded In: 2012 Founded In: 2011
Founded In: 2011

Sector
Sector Sector
Sector
1 Social
Social 1 Energy
Energy &
& Utilities
Utilities

Key
Key Investors
Investors
Key
Key Investors
Investors Goldman
Goldman Sachs,
Sachs, Abu
Abu Dhabi
Dhabi
2 Bharti
Bharti SoftBank,
SoftBank, Tiger
Management,
Tiger Global
Management, Tencent
Global
Tencent Holdings
Holdings
2 Investment
Investment Authority,
Authority, Asian
Asian
Development
Development Bank
Bank

Total
Total Funding
Funding Raised
Raised Till
Till Date
Date
3 Total
Total Funding
$261
Funding Raised
$261 Mn
Mn
Raised Till
Till Date
Date
3 $1.5
$1.5 Bn
Bn

Tagged
Tagged As
As Unicorn
Unicorn In Tagged
Tagged As
As Unicorn
Unicorn In
In
4 2016
2016
In
4 2017
2017

Current
Current Valuation Current
Current Valuation
Valuation
5 $1.4
$1.4 Bn
Bn
Valuation
5 $2
$2 Bn
Bn

Founded In: 2004

Founded In: 2004 Founded In: 2010
Founded In: 2010

Sector
Sector Sector
Sector
1 AI
AI and
and BigData
BigData 1 TransportTech
TransportTech

Key
Key Investors
Investors Key
Key Investors
Investors
2 Sequoia
Sequoia Capital,
Atlantic,
Capital, General
General
Atlantic, MasterCard
MasterCard
2 SoftBank,
SoftBank, Tencent
Tekne
Tencent Holdings,
Tekne Capital
Capital
Holdings,

Total
Total Funding
Funding Raised
Raised Till
Till Date
Date Total
Total Funding
Funding Raised
Raised Till
Till Date
Date
3 $211
$211 Mn
Mn 3 $3
$3 Bn
Bn

Tagged
Tagged As
As Unicorn
Unicorn In
In Tagged
Tagged As
As Unicorn
Unicorn In
In
4 2013
2013 4 2014
2014

Current
Current Valuation Current
Current Valuation
5 $1.5
$1.5 Bn
Bn
Valuation
5 $7
$7 Bn
Bn
Valuation

126 © 2018, Inc42 Media DATALABS

 Founded In: 2008
Founded In: 2008 Founded In: 2011
Founded In: 2011

Sector
Sector Sector
Sector
1 Hyperlocal
Hyperlocal 1 Ecommerce
Ecommerce

Key
Key Investors
Investors Key
Key Investors
Investors
2 Kinnevik
Kinnevik AB,
Tiger
AB, Brand
Tiger Global
Brand Capital,
Capital,
Global Management
Management
2 Helion
Helion Venture
Venture
Venture Partners,
Partners, Nexus
Venture Partners,
Partners, GIC,
GIC,
Nexus

Tiger
Tiger Global
Global Management
Management

Total
TotalFunding
FundingRaised
RaisedTill
TillDate
Date Total
TotalFunding
FundingRaised
RaisedTill
TillDate
Date
3 $430
$430 Mn
Mn 3 $138
$138 Mn
Mn

Tagged
TaggedAs
AsUnicorn
UnicornIn
In Tagged
TaggedAs
AsUnicorn
UnicornIn
In
4 2015
2015 4 2016
2016

Current
CurrentValuation
Valuation Current
CurrentValuation
Valuation
5 $1
$1 Bn
Bn 5 $1.1
$1.1 Bn
Bn

Founded In: 2008

Founded In: 2008 Founded In: 1996
Founded In: 1996

Sector
Sector Sector
Sector
1 Hyperlocal
Hyperlocal 1 EnterpriseTech
EnterpriseTech

Key
Key Investors
Investors Key
Key Investors
Investors
2 Sequoia
Sequoia Capital,
Temasek
Capital, InfoEdge,
Temasek Holdings
Holdings
InfoEdge, 2 SoftBank,
SoftBank, Kleiner
Caufield
Caufield &
Kleiner Perkins
& Byers
Byers
Perkins

Total
TotalFunding
FundingRaised
RaisedTill
TillDate
Date Total
TotalFunding
FundingRaised
RaisedTill
TillDate
Date
3 $243
$243 Mn
Mn 3 N/A
N/A

Tagged
TaggedAs
AsUnicorn
UnicornIn
In Tagged
TaggedAs
AsUnicorn
UnicornIn
In
4 2015
2015 4 N/A
N/A

Current
CurrentValuation Current
CurrentValuation
5 $1
$1 Bn
Bn
Valuation
5 $1
$1 Bn+
Bn+
Valuation

127 © 2018, Inc42 Media DATALABS

 THE SOONICORNS
India currently has a handful of unicorns, but looking at the way Indian startups are
growing, many of them have the potential to achieve the unicorn status in the next
2-5 years. Overall, we believe that India is currently breeding over 100 such startups
which are expected to smoothly move in the billion dollar club, which currently has
only 12 startups. Thus, Inc42 Datalabs team, looked into these startups and have
shortlisted some 34 companies which we believe have a high chance of joining the
unicorn club by 2020.

SOONICORN SPLIT BY SECTOR

2
9

Soonicorn Split
By Sector

5
6

Ecommerce Logistics Enterprise Tech FinTech

Hyperlocal Healthtech Others

SOONICORN SPLIT BY LOCATION

Soonicorn Split
By Location 2

12

Bengaluru Chennai Delhi NCR Hyderabad

Mumbai Pune

128 © 2018, Inc42 Media DATALABS

34 SOONICORNS TO WATCH OUT FOR

S.NO STARTUP NAME CATEGORY HEADQUARTERS FOUNDED DATE TOTAL FUNDING AMOUNT

01 BankBazaar FinTech Chennai 2008 $109,000,000

02 BigBasket Hyperlocal Bengaluru 2011 $585,666,450

03 BlackBuck Logistics Bengaluru 2015 $107,686,383

04 Book My Show Hyperlocal Mumbai 1999 $124,500,000

05 BYJU’S EdTech Bengaluru 2008 $244,000,000

Singapore or
06 Capillary Tech EnterpriseTech Bengaluru 2008 $82,100,000

07 CarDekho Ecommerce Delhi-NCR 2005 $65,000,000

08 CarTrade Ecommerce Mumbai 2009 $240,201,271

09 Delhivery Logistics Delhi-NCR 2011 $257,569,361

10 Druva EnterpriseTech US or Pune 2008 $198,000,000

11 Ecom Express Logistics Delhi-NCR 2013 $179,000,000

12 FINO PayTech FinTech Delhi-NCR 2006 $172,000,000

13 FirstCry Ecommerce Pune 2010 $119,000,000

14 Freshworks EnterpriseTech Chennai 2010 $148,999,930

15 Grofers Hyperlocal Delhi-NCR 2013 $180,303,392

16 Just Buy Live Logistics Mumbai 2015 $120,000,000

17 Lenskart Ecommerce Delhi-NCR 2010 $129,629,631

129 © 2018, Inc42 Media DATALABS

34 SOONICORNS TO WATCH OUT FOR

S.NO STARTUP NAME CATEGORY HEADQUARTERS FOUNDED DATE TOTAL FUNDING AMOUNT

18 Manthan EnterpriseTech Bengaluru 2003 $98,400,000

19 MedPlus HealthTech Hyderabad 2006 $210,281,765

20 Mswipe FinTech Mumbai 2011 $66,000,000

21 OYO TravelTech Delhi-NCR 2013 $450,000,000

Paytm
22 E-Commerce Ecommerce Delhi-NCR 2016 $200,000,000

23 Pepperfry Ecommerce Mumbai 2011 $159,000,000

24 Pine Labs FinTech Delhi-NCR 1998 N/A

25 PolicyBazaar FinTech Delhi-NCR 2008 $146,600,000

26 Power2SME Ecommerce Mumbai 2012 $70,800,000

27 Practo HealthTech Bengaluru 2008 $179,000,000

28 RateGain EnterpriseTech Delhi-NCR 2004 $50,000,000

29 Rivigo Logistics Delhi-NCR 2016 $129,893,340

Media &
30 Saavn Entertainment Mumbai 2007 $110,000,000

Stellar Value
31 Chain Logistics Mumbai 2016 $125,000,000

32 Swiggy Hyperlocal Bengaluru 2014 $155,500,000

33 Urban Ladder Ecommerce Bengaluru 2012 $95,184,288

34 Xpressbees Ecommerce Pune 2015 $120,380,000

130 © 2018, Inc42 Media DATALABS

 INDIA IN THE
GLOBAL ECONOMY
India is reportedly the 3rd largest startup ecosystem after the US and UK according
to NASSCOM. But is that really so? Let’s take a step back and take a comparative look
on how India is actually faring out in the world as an economy.

Below, we plot through the factors that outline the current and future possibilities
for startups in some of the largest startup hubs across the world, factoring
regulatory conditions, ease of doing business, entrepreneurship development,
economic support, market stature and feasibility.

To quote Adam Smith in The Wealth of Nations, “Basic institutions that protect
the liberty of individuals to pursue their own economic interests result in greater
prosperity for the larger society.”

Economic freedom is the highest form of freedom that provides an absolute right
of property ownership, fully realised freedom of movement for labour, capital and
goods, and an absolute absence of coercion or constraint of economic liberty
beyond the extent necessary for citizens to protect and maintain liberty itself.
Thus, economic freedom of a country dictates its global economic standpoint.
With this notion, let’s have a look at the the Index of Economic Freedom (created
by Heritage Foundation and WSJ) and compare India to the other burgeoning
startup ecosystems of the world.

THE INDEX OF ECONOMIC FREEDOM BY heritage.org

The Index documents the positive relationship between economic freedom and a
variety of positive social and economic goals and is an excellent objective tool for
analysing or comparing 186 economies throughout the world.

India Indonesia US China UK Canada Germany Japan

Rule of Law 48.03 44.10 78.17 50.20 88.37 83.57 80.03 83.10
Government Size 55.20 87.87 58.17 78.50 49.13 70.00 64.40 43.43
Regulatory Efficiency 56.47 57.33 85.17 63.03 82.57 77.60 71.77 80.93
Open Markets 50.87 58.50 79.03 37.87 85.67 82.80 79.00 70.87

2017 Net Score 52.6 61.9 75.1 57.4 76.4 78.5 73.8 69.6
World Rank - 2017 143 84 17 111 12 7 26 40

Although this paints a sober picture for India in terms of fiscal health, openness
of market and regulatory obstacles, India has also come a long way in terms of its
entrepreneurial population.

131 © 2018, Inc42 Media DATALABS

 The 2017 Global Entrepreneurship Index (GEI) stated the biggest jump in rankings
for India, as it has moved up 29 spots since 2016 to land the 69th spot in the 2017
report. The top rankings were dominated by countries in the innovation-driven
stage of development.

The GEI measures a country’s entrepreneurial ecosystem by combining individual

data such as opportunity recognition, startup skills and risk acceptance, with
institutional measures, including urbanisation, education, economic freedom,
digital citizenship, digital governance, digital marketplace and digital business.
These measurements help distinguish self-employment and replicative
entrepreneurship from the innovative, productive and rapidly growing
entrepreneurial ventures that drive real economic growth. A jump of 29 ranks
is a solid indication for Indian startups as it suggests a rapid growth in
entrepreneurial talent for the year 2018.

THE GLOBAL ENTREPRENEURSHIP INDEX RANKINGS

Canada 3
UK 4 15 Germany

1 USA
28 Japan

43 China

68 India

94 Indonesia

132 © 2018, Inc42 Media DATALABS

 With global studies at hand, we at Inc42 Datalabs have ranked these eight
ecosystems on the basis of their economic and market parameters.

Considering the economic parameters of Asian and Non-Asian countries, we get

a better picture of the reason for the low economic and entrepreneurial ranking
despite the fact that India is one of the largest startup ecosystems in the world.

The reason from such low rankings of India in the Global Entrepreneur Index and
the Index of Economic Freedom becomes quite clear when we compare these
ecosystems in terms of basic drivers of the market. India ranks at the top when
compared with the other seven ecosystems in terms of market parameters. This
might reinforce the faith in India as being one of the top startup ecosystems
globally. However, when we compare India with other ecosystems on economic
parameters that drive a market, we see the actual reason behind the low
rankings.

MARKET PARAMETERS

India
8

6
Japan Indonesia
5

Germany US

Canada China

UK

Smartphone Users 0-24 Age Population Urban Population

Internet Users Population Growth Median Age

133 © 2018, Inc42 Media DATALABS

 India still falls way behind due to corruption, corporate tax, ease of doing business
and credit rating – the major parameters that determine the stability of a business
in an economy.

The picture becomes quite clear now - India, as a market, is one of the biggest and
has one of the largest talent pool and consumer base. However, the metrics for
facilitating business are heavily lacking. This is already evident from the fact that
in 2017, China clocked a higher economic growth rate (6.7%) than India (6.6%), and
at the same time, India’s GDP and Per Capita Income are still a fraction of that of
China’s.

ECONOMIC PARAMETERS

India
8

6
Japan Indonesia
5

Germany US

Canada China

UK

GDP PPP 2016 Interest Rate Least Corrupt Banking S & P Credit
Billionaire Corporate Tax Rate Ease Of Doing Ratings
Business

134 © 2018, Inc42 Media DATALABS

PREDICTION FOR 2018
According to the projections based on our time series data, in the year
2018, the Indian startup ecosystem is expected to see around $9 Bn in
funding across 700 deals. Fintech, healthtech, enterprise along with AI
and Big data will continue to dominate, given the market scope of these
sectors in India.

The year 2017 has been about market corrections and this trend is set to
continue in 2018. With lesser startups being able to make it to Series A
and many ‘me-too’ startups at the seed stage, the funding disparity will
continue. Only a handful of startups that will be able to crack through to
late stage fundings will dominate with big ticket size rounds, given the fact
that investors have lesser options to bet on.

An internal correction in Series A and Series B was observed in 2017 and

the gap is projected to increase in 2018. With lesser startups managing to
reach Series A, the Series A crunch will continue while Series B rounds will
increase.

With the increased government and corporate participation in Tier II and

Tier III cities, the year 2018 is expected to be a boost for startups in these
cities.

$14B 1,000

Total Funding
1 $9 Bn $12B 857

$10B 714

Total Deals
2 700
$8B 571
Deals
Amount
Total Funding

Deals

$6B 429
Total of
Funding

Number

$4B 286

Top Sectors
3 Fintech, $2B 143

HealthTech, 0 0

EnterpriseTech
4

j )
1

ro
20

20

20

20

(p
18
20

Total Funding
Funding Amount Total Deals
Number of Deals

135 © 2018, Inc42 Media DATALABS

 BIBLIOGRAPHY
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136 © 2018, Inc42 Media DATALABS

 GLOSSARY
Tech Startup: Technology enabled or technology driven, highly scalable businesses
driven towards rapidly creating massive impact
Seed Funding: Funding raised in Pre-seed, seed and angel funding round
Bridge Funding: Funding raised in Pre-Series A, Pre-Series B, Convertible Debt rounds
Growth Stage Funding: Series A and Series B are considered as growth stage
Late Stage Funding: Funding raised at Series C, Series D rounds and beyond it
Delhi NCR: Delhi and the adjoining areas like Noida, Gurugram, Faridabad etc.
Tourist Angels: Angel investors who haven’t participated in more than 2 startup
funding deas
Unicorn: A unicorn is a startup company valued at over $1 Bn
Soonicorns: Startups that have a high chance of joining the unicorn club
Average Ticket Size: Avg ticket size is the average of disclosed funding amount based
on the discussed constraints
VC: Venture Capital
YoY: Year on Year
MoM: Month on Month
Mn: Million
Bn: Billion
Tn: Trillion
B2B: Business To Business
B2C: Business To Consumer
B2B/B2C: Business To Business/Business To Consumer
On Graph Axis:
$XXK - XX Thousand USD
$XXM - XX Million USD
$XXB - XX Billion USD

137 © 2018, Inc42 Media DATALABS

 CREDITS

Design Data & Research Editorial

Utkarsh Agarwal Ankan Das Pooja Sareen

Mayank Singhal Pooja Sareen Meha Agarwal
Manash Pratim Diana Chingakham
Pallav Kaushish

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