Mega deals include $1 bn funding round by Paytm, $500 mn round by Udaan
With the blunder happened in WeWork, the global Startup industry has been more cautious then ever. But the Indian Story Looks different, With the last two years have seen a consolidating selling in VC investments there has been an upward trend in last few months. Venture Capital (VC) investment in India was quite strong in the fourth quarter of calender year 2019, ending the year on a high note with a number of large, mega-deals, including a $1 billion funding round by Paytm and a $500 million round by business productivity company Udaan.
Consumer-focused technologies were a critical focus for VC investors in India, according to the KPMG report titled “Venture Pulse Q4’2019.’
In addition to Paytm, online pharmacy company PharmEasy raised $220 million, while home furnishings company Urban Ladder raised $148 million during the quarter
Fintech continued to be one of India’s strongest sectors for VC investment in Q4’19, a trend expected to continue for the foreseeable future given the country’s significant rural and unbanked population and the complexities and challenges associated with building a traditional financial services company in the country, according to the report.
Commenting on the VC investment in India, Nitish Poddar, partner and national leader – private equity, KPMG in India, said, “VC investment in India was relatively mixed during 2019. While VC investment started off soft, the last two quarters have seen a number of excellent deals. This activity is very encouraging and suggests a growing positivity heading into Q1’20. Further, of late, there is a growing interest in the space from Japan’s trading houses, who are betting on the India consumption story.”
Foreign investors remained quite active and interested in making investments in India. During Q4’19, Silicon Valley-based Accel closed funding for a $550 million fund, it’s sixth India-focused VC fund. India has also seen an increase in VC investments by Japan’s trading houses.
Heading into 2020, companies in India looking to attract attention from VC investors are expected to put more emphasis on reducing their cash flow and providing clear paths to profitability. Investors are likely to focus their investments on companies with strong and sustainable growth models. Logistics, education and e-commerce are all expected to remain hot areas of growth.