India’s startup sector was not spared the impact of the Covid-19 pandemic as homegrown startups raised $9.3 billion in 2020, down from their record fundraising of $14.5 billion in the previous year, data shows.
This was the first year since 2016 that Indian startups raised less than $10 billion in a year, according to Tracxn.
The number of deals made by startups also took a dive from 1,185 last year to 1,088 in 2020. Deals with a valuation of $100 million or higher fell from 26 in 2019 to 20 this year and deals in the bracket of $50 million and $100 million fell from 27 to a mere 13.
Global factors other than the pandemic also influenced the startups’ deals, like the subdued participation from investors worldwide. Major players from China including Alibaba and Tencent, which back scores of Indian startups, held off on their capital due to diplomatic tensions between the two countries.
Japan’s Softbank also released less money as its main firms in India, such as Oyo and Paytm did not raise money. Softbank CEO Masayoshi Son had also said earlier this year that to keep the company financially safe during the pandemic, Softbank was hoarding its liquidity to prepare for an emergency scenario.
This is not to say that the coronavirus pandemic has not pushed some startups towards growth. Edutech startups including Byju’s and Unacademy touched new highs this year, with the former now valued at over $11 billion and the latter valued at $2 billion, getting inducted into the unicorn club, in 2020.
Byju’s also took over WhiteHat Jr in a deal valued at $300 million, while Unacademy acquired PrepLadder, a startup targeting medical students.
As many as 11 Indian startups became unicorns in 2020, including Razorpay, Dailyhunt and Glance. Startups also invited funds from tech bigwigs like Facebook and Google.