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startup | IST

Startups in 2020: Highest number of unicorns but VC deals at 5-year low

The Indian startup ecosystem saw $10.6 billion of VC investments in 2020 so far, much behind the $12.5 billion seen in 2019, and also marginally lower than the $10.9 billion and $10.7 billion raised in 2018 and 2017 respectively, according to the latest data from Venture Intelligence.

The Indian startup ecosystem saw $10.6 billion of VC investments in 2020 so far, much behind the $12.5 billion seen in 2019, and also marginally lower than the $10.9 billion and $10.7 billion raised in 2018 and 2017 respectively, according to the latest data from Venture Intelligence.
The startup sector saw the lowest number of deals in the past five years.
The total number of VC deals stands at 648 so far in 2020, much lower than the 833 deals in 2019 and 731 deals in 2018.
However, even the pandemic could not dampen the sky-high valuations for Indian startups, with 10 new unicorns, or billion dollar companies, being created so far this year, the highest so far. In 2019, nine startups turned unicorns, while there were eight in 2018, according to Venture Intelligence.
The unicorns of 2020 are Pine Labs, Unacademy, Postman, Nykaa, DailyHunt, Cars24, Zenoti, Razorpay, Zerodha, and Glance.
The flurry of VC funding in the Indian startup ecosystems were led by the ecommerce and edtech sectors, with Byju’s lapping up as much as $1.35 billion in funding this year, followed by Zomato, which raised $660 million.
In fact, the data shows that Series F and higher funding rounds in 2020 were more than in 2019, standing at 43 deals worth $4 billion, compared to 28 deals worth $3.75 billion last year.
However, there was a significant dip in seed rounds and Series A round. There were 226 seed rounds worth $322 million in 2020 compared to 272 rounds worth $294 million in 2019.
There were 155 Series A rounds worth $856 million this year, compared to 224 rounds worth $1.1 billion last year.
The sectors that bagged the highest VC funding include ecommerce, which saw $2.32 billion of funding, followed by edtech, which raised $2 billion in funding, logistics that raised $1.71 billion, foodtech which saw $1.45 billion in funding, and fintech that raised a funding of $1.4 billion this year.