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$3.1 billion in 3 months! Unicorns drive VC investments in Indian startups

$3.1 billion in 3 months! Unicorns drive VC investments in Indian startups

In the last quarter of calendar year 2020, India saw 294 deals valued at around $3.16 billion. While VC investment dipped compared to previous quarter, deal volume jumped to its highest level since Q1'18 says KPMG's latest report

Edtech garnered interest from venture funds not only in India but across Asia in 2020 Edtech garnered interest from venture funds not only in India but across Asia in 2020

According to the latest Venture Pulse report by KPMG, the last quarter of calendar year 2020 saw over $3.1 billion flow into the Indian start-up sector, largely led by the unicorns . On back of demand spurred by the pandemic in certain sectors, the home delivery, marketplace platforms, and e-commerce were the hottest areas of investment. Majority of funding rounds of $100 million or more, included a $200 million raise by marketplace platform Cars24, a $660 million raise by food delivery company Zomato. Overall deal count for the quarter jumped to 294 from 280 in previous quarter. Overall funding, however, dropped to $3.1 billion compared to nearly $4 billion in Q3 of 2020.

"Interest in staples delivery - fresh food, groceries, and the like - has grown quite significantly in recent months, in addition to online retail and gaming. That has driven a lot of investment. Then there's edtech. It's been an attractive area for VC investors for a couple of years now - but in 2020, that interest skyrocketed and so did the investments," says Nitish Poddar, Partner and National Leader - Private Equity, KPMG in India.

Edtech garnered interest from venture funds not only in India but across Asia in 2020.  For instance in China, Zuoyebang and Yuanfudao raised $1.6 billion and $1 billion, respectively. Back home UnAcademy  raised a massive $84 million in funding in Q4 of 2020. Yuanfudao's raise made it the most valuable private edtech company in the world at $15.5 billion, surpassing India-based Byju's, which was valued at over $11 billion last September.

Though 2019 saw a steady rise in investments, 2020 was a mixed bag with the first 2 quarters seeing subdued investor interest. However it ended on a high note in terms of recovered volume, and mega-deals signed that led to significant rebound in the H2 of 2020. "Over the next few quarters, edtech will likely continue to be a hot area of investment in Asia, with India potentially starting to see some consolidation in the space," the report said.

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