A UK-based Investment data platform Preqin in its report has stated that India’s burgeoning startup system received a record investment of nearly $ 36 billion in privately held companies in the year 2021. The seed-funding in nearly 396 deals contributed to $705.86 million while about 166 investments at series A amounted to about $1.67 billion.
The sectors dominating 2021 include the likes of web3/ crypto, SaaS, direct-to-consumer or D2C brands, fintech, business-to-business (B2B) commerce, EdTech, and healthcare. Investors are of the view that these sectors will continue to be the hot commodities next year as well.
India’s startup ecosystem, which is now churning one unicorn after another, is playing a key part in building the economy of the country. 2021 has been a sensational year for the ecosystem which well and truly has surpassed all projections — both in terms of the number of unicorns and the funding raised.
Till December, 43 unicorns have emerged in the country with Pristyn Care being the latest. Overall, India now houses 79 unicorn startups. Not only this, but the unicorns have also been able to take the next step by going public as well.
A slew of IPOs released by Dalal Street this year found interest of the ‘no-nothing-investors’. Paytm became the country’s largest IPO ever with an issue size of 18,300 crores, with other companies like Zomato, Policy Bazaar, PharmEasy and Nykaa also coming up with their respective IPOs.
Although Paytm’s listing wasn’t as royal as many would have predicted, it still showed that the no-nothing investors were betting on the future of such companies to yield the profits.
Schemes like Startup India, Digital India, Production Linked Incentive launched by the current administration has encouraged entrepreneurship and helped create more high paying jobs within India. The impact of these schemes is already visible as the number of unicorns suggests.
Thanks to schemes like Startup India, the country has emerged as the third-largest startup ecosystem in the world, with more than 50,000 startup companies. The students at premier institutions now prefer to run and own a company in India, rather than becoming cheap labour for MNCs.
The PLI scheme is encouraging foreign companies as well as Indian companies to manufacture in India, for domestic consumption as well as exports. Many foreign companies which used to export goods to India are now opening up factories in India and providing job opportunities to thousands.
India’s startup climate is its golden period. The investors are willing to risk high, even if it means betting on promising and exciting ideas. However, the best part about the ongoing developments is that it is just the beginning. The year 2022 might be the biggest in terms of investment flowing into the country’s startups.