Inc42 Annual Funding Report 2019 - FInalRTP PDF

A N N U A L R E P O R T
Indian Tech Startup

2019
Funding
Report
P R E S E N T I N G PA R T N E R
Table of
Contents
Scope Of The Report 01
Executive Summary 02
Introduction To The Report 04
Indian Startup Funding Landscape 05-107
Stage Analysis
Business Model Breakdown
Sectorwise Analysis
Demography: Top Startup Hubs Of India
Investor Participation Analysis & The Top 10 VCs
Mergers And Acquisitions
India As A Startup Hub: A Comparison 108-116
Market Parameters
Economic Parameters
Economic Indexes
Transactional Volume
Trade Inflow Outflow & FDI Trends
Impact Of Indian Startup Economy: An Analysis 117-131
Impact On Jobs
Emerging Technologies
The Government Intervention & Policies
Growth In Per-Capita Income & Diaspora
Gender Analysis
Funds Launched in 2019 132
Roadblocks For Indian Startup Ecosystem 135
Indian Startup Funding Predictions 2020 & 2021 139
Methodology 145
Glossary 146
Bibliography 147
Scope
Of The Report
The startup funding landscape in Indian startup ecosystem the funding landscape of India in 2019 and what can be
has changed significantly over the past few years. In the expected for 2020 and 2021. Among other aspects of the
past decade, the Indian startup economy observed the ecosystem, the report will present:
adverse effect of the funding bubble of 2016 to the funding
crunch of 2018 (40% drop in seed stage deals). However,
Funding trends and projections
the startup economy has undergone a revival in 2019.
Opportunities created for startups in 2019
Funding analysis and trends in startup hubs and sectors
In this edition of DataLabs by Inc42’s flagship report —
Analysis of rising sectors
“Annual Tech Startup Funding Report 2019”, we analyse
Impact of funding on the Indian economy
the health of our Indian startup ecosystem from the lens of
Investor outlook and intent
funding. The rise and fall of funding has a significant role in
Top investors in India
shaping startups, so this is a key indicator about the state of
Government policies and their impact
the ecosystem. Funding enables business to build, grow
Comparison of India with global startup hubs
and scale to be able to generate revenue and capital gain
Emerging tech for 2020
for its stakeholders. This in turn boosts employment and
Challenges and opportunities for next decade
contributes to the GDP of the country, which is why
investments are an integral part of any tech ecosystem,
particularly startups.
The report will provide readers with an in-depth analysis of

© Inc42 Media | not for distribution
1
Executive
Summary
$12.7 Bn
Funding raised Indian startups across 766 deals
22%
Share of 2019 to the total funding amount invested in Indian
startups in the last 5 years
34
Deals over $100 Mn in Indian startups
B2C
Became the most preferred business model by Indian investors
Fintech & Ecommerce

Bagged most funding in 2019
20%
Contribution of top 5 VCs in the total deal count
2
Sequoia Capital
Dethroned Accel Partners to become the most active VC of
2019
9%
Startups funded in 2019 had women founders
111
M&A Deals were recorded, a 10% fall compared to 2018
7
Startups entered the unicorn club
3
Introduction
To The Report
The last few years of the past decade showed that India has
great appetite for technology, data and the internet. From
having a handful of tech companies to hundreds and then
thousands of innovative new ventures, India’s startup
ecosystem has grown immensely over the past decade and is
on the verge of reaching a new level of maturity.
From 29K startups in 2014, the numbers grew exponentially

from 2015 to 2018 and touched 49K. In less than half a
decade (2014-2019) startups and the enabling ecosystem
have flourished with the support of the government’s
ambitious Startup India, Make in India and Digital India
programmes.
Thanks to this favourable environment, Indian startups have

created a combined value of about $130 Bn with overall
funding skyrocketing to touch $58 Bn from 2015-2019.
Moreover, apps developed by Indian companies surpassed
their Chinese counterparts in terms of downloads in 2019 —
41% of the top 200 apps downloaded in 2019 were made by
Indian developers — which is another sign of the market
maturing.
The last five years hold a series of historic milestones for the
Indian startup economy. From a funding standpoint, the
ecosystem has grown immensely with over 5,011 deals by
2,984 startups. With $12.7 Bn funding in 2019 and 766 deals,
Indian startup ecosystem saw the entry of seven startups into
the unicorn club.
However, the preference of late-stage investments rather

than risking capital in seed or early-stage startups is growing,
which indicates that over the years Indian startup investors
are turning more and more risk-averse. This is likely to hamper
the growth of innovation in the ecosystem in the long run.
Like in the past, sectors such as enterprise tech, ecommerce,

fintech, consumer services and healthtech banked the most
funding. These five sectors combined accounted for 63%
(3,177) of the total deal count in Indian startup ecosystem
between 2014 and 2019.
India’s tech capital, Bengaluru, continued to lead the hubwise

funding charts with a total investment of $5.3 Bn.
4
5
Indian
Startup
Funding Landscape
$12.7 Bn 5%
The total funding raised by Indian Drop in count of unique
startups across 766 deals startups funded compared
to 2018
664
Unique startups funded
$21 Mn
Average ticket size of funding
amount
15%
Surge in total funding amount
compared to 2018
Top Funding Grossers Of 2019 © Inc42 Media | not for distribution
Paytm Renew Power Udaan Ola Delhivery
6
Indian Startup
Funding Overview
Startup Funding Trends
Startup funding amount grew by 15%, while deals plunged 8% in 2019
$15 Bn 1250
1000
$10 Bn
Funding Amount
750
Deal Count
500
$5 Bn
250
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Funding Amount Deal Count

7
Outliers Take Over A Quarter Of The Total Funding
Without the outlier funding rounds, the total amount raised stood at $9 Bn,
the highest in the past five years
$10.0 Bn 1250
1000
$7.5 Bn
Funding Amount
750
Deal Count
$5.0 Bn
500
$2.5 Bn
250
$0.0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Lowest Number Of Indian Startups Funding In

Past 5 Years
The count of unique startups funded fell for the third straight year as investors
backed growth and late stage startups
1000
750
Unique Startups Funded
500
250
0
2014 2015 2016 2017 2018 2019
Year
8
Key Trends Observed
The transition of the Indian startup The count of unique startups funded
ecosystem from the growth stage to declined by 5% in 2019 compared to
maturity is quite evident from the fact the previous year. The investor
that trends of both funding amount and preference of backing existing startups
deal count have stabilised from 2017 to over new ventures has been the primary
2019. factor behind this drop, over the years.
Without outliers, the value of funding The negative growth rate in deal count
amount recorded a historical peak ($9 of 6% indicates the slowdown in the
Bn) in 2019. While in 2018, the frequency of deals in the ecosystem.
percentage share of outliers in total Due to the increased failure rate of
funding was 36%, in 2019, the share startups over the years, investors have
stood at 27%. become more risk averse in terms of
funding startups. As a result a preference
towards the rising popularity of
syndication over individual venture
capital investments is a primary reason
behind the downward trend in the deal
count.
Median Funding Amount &

Average Ticket Size
Median Funding Amount Hits A New High
With a CAGR of 36%, median funding amount created new benchmark in 2019
$4 Mn
$3 Mn
Median Funding Amount
$2 Mn
$1 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
Median Funding Amount Median Funding Amount (W/O)
9
Late Stage Deals Benefit Average Ticket Size
The spike in late stage investments helped Indian startups grow average ticket
size to $21 Mn, a 15% jump from 2018
$25 Mn
$20 Mn
Average Ticket Size
$15 Mn
$10 Mn
$5 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
Average ticket size Average ticket size (W/O)
Key Trends Observed
Median funding amount and average ticket

size recorded historical peaks in 2019. The
median funding amount and the average
ticket size stood at $4 Mn and $20 Mn
respectively.
The median funding amount and average

ticket size recorded 2x and 15% surge
compared to the previous year.
38% and 19% CAGR of median funding

amount and average ticket size between
2015 to 2019.
The growing popularity of late stage

investments over seed and growth is the
primary reason behind the soaring value of

funding ticket size.
10
11
Analysis
Stagewise
Bridge & Growth Funding Amount Record Growth
With the fall in seed funding, Indian investors scouted for bridge and growth
stage investments, leading to a 30% and 12% hike respectively for the two stages
2014
2015
2016
Year
2017
2018
2019
0% 25% 50% 75% 100%
Funding Amount
Bridge Stage Growth Stage Late Stage Seed Stage
Seed Funding Crunch Intensifies

India's seed-stage startups struggled to attract investors for the third year in a
row since 2016
2014
2015
2016
Year
2017
2018
2019
0% 25% 50% 75% 100%
Deal count
12
Seed Stage
44%
Decline in total seed stage
288
Unique startups funded at
funding amount compared seed stage, 17% lower
to 2018 compared to 345 in 2018
-15%
CAGR of count of unique
$763K
Median funding amount for
*Based on Indian startup
funding data for 2019
startups funded at seed seed stage

stage between 2015 to
2019
13
5 Point Summary: Seed Stage
2014 2015 2016 2017 2018 2019

$65.8 Mn
Max
$25 Mn
$8.2 Mn Q3 $1.6Mn
$7.5 Mn
$5.6 Mn Q3 $108K
$2 Mn
Q3 $782K
Q3 $750K Q3 $766K
Q3 $726K
Median $763K
Median $496K
Median $376K Median $389K

Median $360K
Median $224K Q1 $240K Q1 $235K

Q1 $160K
Q1 $148K Q1 $147K Q1 $153K
$16K
$10K
$8K
$7.3K
Min
$4K
$1.4K
14
Seed Funding’s Third Straight Drop
With just $252 Mn in funding, India’s seed funding startups recorded 19% and
44% decline in deals and amount respectively in 2019 compared to 2018
$500 Mn 800
$400 Mn
600
Funding Amount
$300 Mn
Deal Count
400
$200 Mn
200
$100 Mn
$0 Mn 0
2014 2015 2016 2017 2018 2019
Year
Fewer Startups Funded At Seed Stage

Compared to 345 startups funded in 2018, 2019 saw 17% decline with
288 startups getting funded
800
Count Of Unique Startups Funded
600
400
200
0
2014 2015 2016 2017 2018 2019
Year
15
Seed Stage Share In Total Deals Declined In 2019
The seed stage deals had 40% share in total deals in 2019, compared to
46% in 2018
80%
Deal Count At Seed Stage/Total Deal Count
60%
40%
20%
0%
2014 2015 2016 2017 2018 2019

Year
Key Trends Observed
Seed funding in the Indian startup ecosystem

is showing signs of a slowdown. This can be
ascertained by looking at the growth rate of
three primary indicators— funding amount,
deal count and count of unique startups
funded.
Both, the count of funding deals and startups

funded are diminishing rate of 15% (2015-
2019) whereas the funding amount recorded
a minimal CAGR of 1% in this time.
The share of seed deals in total deals

declined in 2019. While, the median amount
stood at $502K compared to $491K in 2018;
the percentage share of seed funding in total
deals was 6% lower than 2018.
The shift in investor preference towards late-

stage investments over seed stage can be
attributed to the high failure rate of startups
and wider syndication opportunities for
startup investments.
Hubwise, Delhi NCR and Bengaluru recorded

the most number of seed funding deals.
Enterprise tech and ecommerce recorded

the most seed funding deals.
16
Bridge Stage
68%
Surge recorded in total
67
Unique startups were
funding amount at bridge funded in bridge funding in
stage in 2019 compared to 2019, a 22% spike
2018 compared to 2018
12%
$1.3 MnMedian funding amount in
startups funded between 2019 at bridge stage
2015 to 2019
Bridge Funding Amount Record Historical Jump

Bridge funding amount and deal count grew at a CAGR of 30% & 12%
respectively during 2015-2019
$100 Mn 125
100
$75 Mn
Funding Amount
75
Deal Count
$50 Mn
50
$25 Mn
25
$0 Mn 0
2014 2015 2016 2017 2018 2019
Year
17 Source: Indian Tech Startup Funding Report 2019

© 2020, Inc42 Media
Unique Startups Funded Records Surge
Compared to 55 startups funded in 2018, 67 startups secured bridge funding in 2019
125
100
75
50
25
0
2014 2015 2016 2017 2018 2019
Year
Source: Indian Tech Startup Funding Report 2019

After 2017 Decline, Bridge Funding Contribution

Record Hump
After falling in 2015 and 2017, bridge funding has been picking pace since 2018
in terms of contribution to total deals
40%
Bridge Funding To Total Deal Count Ratio
30%
20%
10%
0%
2014 2015 2016 2017 2018 2019
Year

© 2020, Inc42 Media 18
Key Trends Observed
As per DataLabs analysis, 97% of the bridge
funding deals are recorded at Pre-Series A.
While the rest 3% are recorded at Pre-Series
B and C stage.
The need for scaling up the business

operations is the primary factor for the
growth of bridge funding in the country.
All three indicators — funding amount, deal

count and number of unique startups funded
— have recorded a positive growth rate of
30%, 12% and 12% respectively.
As per historic data (2015-2019), maximum

bridge funding deals were recorded in
sectors like enterprise tech, consumer
services. While sectors like adtech, agritech
had very few deals.
19
Growth Stage
62% 234
Surge recorded in growth Unique startups were
stage funding amount in funded at the growth stage
2019 compared to 2018 in 2019, a 2% higher
compared to 2018
-1% $7 Mn
CAGR of count of unique Median funding amount at
startups funded at growth growth stage in 2019
stage between 2015 to
2019
20
21
Min Max
Q1 Median Q3
$30K
2014
$2.2 Mn $4.8 Mn $12 Mn
$143 Mn
Q1 Median Q3
2015
$500K
$3 Mn $7.7 Mn $16 Mn
$100 Mn
5 Point Summary: Growth Stage
Q1 Median Q3
$50K
2016
$1.8 Mn $5.1 Mn $15.5 Mn

$180 Mn
Q1 Median Q3
2017
$352K
$2.4 Mn $5.9 Mn $13 Mn
$500 Mn
Q1 Median Q3
2018
$2.5 Mn $6 Mn $14.2 Mn
$127K
$311 Mn
Q1 Median Q3
$70K
2019
$3.7 Mn $7 Mn $15.8 Mn
$289 Mn
Growth Stage Funding Grew Exponentially
At $4 Bn, growth stage funding amount recorded a 62% spike in 2019 compared to 2018
$5 Bn 300
$4 Bn
200
Funding Amount
$3 Bn
Deal Count
$2 Bn
100
$1 Bn
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year

Unique Startups Funded Stagnant

Despite the huge growth in funding amount, the number unique startups funded
at growth stage grew only by 2% compared to the previous year
250
200
150
100
50
0
2014 2015 2016 2017 2018 2019
Year

22
Growth Stage Contribution On The Rise
Growth stage carved a greater share in total deals with 34% in 2019, much higher
than the 28% average annual share in total deals from 2014-2019
40%
Growth To Total Deal Count Ratio
30%
20%
10%
0%
2014 2015 2016 2017 2018 2019
Year

Key Trends Observed

The growth stage investments which Sectors like fintech, enterprise tech recorded
consists of Series A and Series B rounds of most deals at the growth stage with 40%
funding witnessed a major uptick in the share in total deals recorded in growth stage.
growth of funding amount.
Total funding amount of growth stage Mature hubs like Bengaluru, Delhi NCR with
startups reached its historical peak $4 Bn in 105 and 64 deals respectively stood at the
2019, which is a surge of approximately 2x top in terms of growth-stage funding.
compared to the $2.6 Bn in 2018. On the
other hand deal count witnessed a minor
setback of 3%.
Overall, there is a minor slowdown in the

deal count and unique startups funded as
indicated in CAGR between 2015 to 2019,
-2% and -1% respectively.
23
Late Stage
7%
Decline in total funding
98
Unique startups were
amount in 2019 compared funded at the late stage in
to 2018 2019
11%
$30 Mn
Median funding amount for
startups funded between late stage in 2019
2015 to 2019
24
25
Min Max
Q1 Median Q3
$11.7 Mn $23 Mn $75 Mn
$1 Mn
2014
$1000 Mn
Q1 Median Q3
$15 Mn $31 Mn $90 Mn
$401K
2015
$701 Mn
5 Point Summary: Late Stage
Q1 Median Q3
$14.2 Mn $39.2 Mn $72 Mn
$253K
2016
$300 Mn
Q1 Median Q3
$13.7 Mn $32 Mn $100 Mn
$1 Mn
2017
$1500 Mn
Q1 Median Q3
$9.8 Mn $24.7 Mn $103 Mn

$1 Mn
2018
$1000 Mn
Q1 Median Q3
$10 Mn $21.55 Mn $70 Mn

$216K
2019
$669 Mn
Late Stage Deals Reached Historical Peak
While the funding amount fell for the second year in a row, the deals grew by 6%
compared to 2018
$12.5 Bn 150
$10.0 Bn
100
Funding Amount
$7.5 Bn
Deal Count
$5.0 Bn
50
$2.5 Bn
$0.0 Bn 0
2014 2015 2016 2017 2018 2019
Year

Unique Startups Funded At Growth Stage
Remained Stagnant
The late stage startups reported an 11% CAGR between 2015 to 2019
100
75
50
25
0
2014 2015 2016 2017 2018 2019
Year
Source: Indian Tech Startup Funding Report 2019 26

Late Stage Contribution To Total Deals Grows
On an average, the late stage deals have 12% contribution in the total deals,
but the same was at 17% in 2019
20%
Late Stage To Total Deal Count Ratio
15%
10%
5%
0%
2014 2015 2016 2017 2018 2019
Year

Key Trends Observed

In contrast to seed and growth stage all three Fintech, consumer services recorded the
major indicators of the startup economy — most number of deals, while ecommerce
funding amount, deal count and unique and fintech had the most funding amount in
startups funded have recorded a positive 2019 at the late stage.
growth rate between 2015 to 2019, 6%, 14%
and 11% respectively.
The preference of late stage investments Fintech recorded the most number of deals
over seed and early can be linked to the fact by sector at the late stage.
that late stage investments in established
startups is relatively safer compared to
investment in new and emerging ventures.
Top 5 startups had a 23% share in total

funding amount at the late stage.
27
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Breakdown
Business Model
B2B-B2C Startups Face Funding Crunch
In 2019, the funding in B2B-B2C startups stood lowest in the last six year
100%
75%
Funding Amount
50%
25%
0%
2014 2015 2016 2017 2018 2019
Year
B2B B2B-B2C B2C

B2C Startups Reported Maximum Deals

With 23% rise, B2C startups recorded high jump in funding deals whereas B2B and
B2B-B2C startups recorded 2% and 44% lower funding compared to 2018
100%
75%
Deal Count
50%
25%
0%
2014 2015 2016 2017 2018 2019
Year
B2B B2B-B2C B2C

30
B2C Startups Rocked The Funding Charts In 2019
With largest share in deals (425) and amount ($6.23 Bn), B2C startups recorded
a high jump in funding in 2019
B2B
23.1%
49.0%
B2C
27.8%
B2B-B2C

Business Model Wise Split Of Total Deal Count

With largest share in deals (425) and amount ($6.23 Bn), B2C startups recorded
a high jump in funding in 2019
B2B
20.6%
55.5%
B2C
23.9%
B2B-B2C

31
Key Trends Observed
B2B startups recorded the highest CAGR i.e.
21% in the funding amount between 2015-
2019.
The median funding amount amongst B2B

and B2B-B2C startups stood at $4 Mn.
A 29% surge in the unique startups funded

was recorded in 2019 compared to 2018.
B2C the most preferred business model in

2019, increased addressable market for
consumer internet products due to wider
penetration of internet and smartphone
among the Indian population is the reason
behind the increased investor confidence
towards B2C startups.
Enterprise tech, Consumer services and

Fintech startups recorded maximum deals in
B2B, B2C & B2B-B2C business models.
Across all the business models B2B, B2B-

B2C and B2C Bengaluru based startups
recorded the maximum number of deals in
2019.
32
33
Analysis
Sectorwise
Fintech
Emerged as the most
Logistics
Had the highest median funding
preferred startup sector of amount ($22 Mn) in 2019
2019
Ecommerce
Recorded maximum funding amount in 2019
50%
Contribution of ecommerce,
fintech and transport tech to
the total funding in 2019
Funding In Consumer Services Faces Decline

With just $993 Mn in funding, the contribution of consumer services to the
total funding dropped by 12% in 2019, compared to 20% contribution in 2018
2014
2015
Funding Amount
2016
2017
2018
2019
0% 25% 50% 75% 100%
Year
Ecommerce Fintech Consumer Services Transport Tech

Enterprise Tech Others
34
Top 3 Sectors Had 43% Share In Total Deals
Enterprise tech, ecommerce and fintech recorded a total of 2,134 deals to
make 43% of the deal count
2014
2015
Deal Count
2016
2017
2018
2019
0% 25% 50% 75% 100%
Year
Enterprise Tech Ecommerce Fintech Consumer Services

Healthtech Others
How The Top 5 Sectors Stack Up

Against Each Other
Fintech Enterprise Tech
Top 5 (2014-2018)
Top 5 (2014-2019)
Enterprise Tech Ecommerce
Ecommerce FinTech
Consumer Services Consumer Services
Healthtech Healthtech
35
Top Two Sectors Secured 41% Of The Total Funding
Ecommerce and fintech together bagged $5.2 Bn funding. While the next top
three sectors just have 26% share in the total funding
Ecommerce
Fintech
Transport Tech
Enterprise Tech
Consumer Services
Sectors
Logistics
Media and
Entertainment
Healthtech
Edtech
Others
$0 $1 Bn $2 Bn $3 Bn
Funding amount
The popularity of fintech, enterprise tech and ecommerce among investors remained intact throughout the year.
36
Fintech Emerged As The Top Funded Sector
With 125 deals & 106 unique startups funded, fintech became the
undisputed leader in 2019
125
Fintech
106
114
Enterprise Tech
105
93
Ecommerce
80
Consumer 75
Services 61
62
Healthtech
52
Sectors
Media and 57
Entertainment 52
46
Edtech
43
43
Deeptech
42
34
Real Estate Tech
28
30
Transport Tech
21
87
Others
74
0 25 50 75 100 125
Deal count
Unique Startups Funded Deal Count

37
Key Trends Observed
In the context of funding amount between

2014 and 2019, ecommerce continues to
remain at the top by the end of 2019. The
growing investor confidence towards sub
sectors such as vertical ecommerce and
private label is a major reason behind the
growing volume of capital inflow in the
sector.
Fintech, on the other hand, jumped one spot

above in the ranking table to become the
second most funded sector. In 2018 it was in
third place in terms of value of funding
amount. Growth in investments into lending
tech startups due to the wider market
opportunity fuelled the growth of high-ticket
investments in this sector.
Consumer services slipped one spot in the

ranking from 2018 to third spot in 2019. The
capital inflow in this sector has become
highly skewed towards startups in the late
stage. The high operational costs and lower
profit margins in this sector can be linked to
decline in venture capital interest in the
sector.
Transport Tech sector has usurped travel

tech from the third spot in 2019. The growing
investor confidence towards the electric
mobility startups has played a crucial role in
the surge in capital inflow towards this
sector. The government’s push toward EVs
has also been a major catalyst.
Enterprisetech retains the fifth spot, with a

surge in demand for digitalisation of business
operations and transactions in the country
opening up new business opportunities. In
addition to this, a greater probability of M&As
in the enterprise tech sector over others is
also a driving factor behind the growth of
enterprise tech funding in India.
38
Enterprise Tech
$1.2 Bn 105 15%

Total funding secured by startups in 2019 Unique startups funded CAGR of funding amount
across 114 deals between 2015-2019
$2 Mn Bengaluru
The median funding amount in Emerged as the top startup hub with 46 deals
2019
Top Funding Grossers Of 2019
Freshworks Druva Icertis Zenoti Clevertap
Five Year Performance

$3.8 Bn 804
Funding Amount Deals
39
Enterprise Tech Record 49% Hike In Funding
Amount
While the deal contribution witnessed a slight growth, the funding amount
contribution saw 2% hike, taking total contribution to 9% compared to 7% in 2018
$1250 Mn 200
$1000 Mn
150
Funding Amount
$750 Mn
Deal Count
100
$500 Mn
50
$250 Mn
$0 Mn 0
2014 2015 2016 2017 2018 2019
Year

Enterprise Tech's Contribution To Total Funding
Record Jump
While the deal contribution witnessed a slight growth, the funding amount contribution
saw 2% hike, taking total contribution to 9% compared to 7% in 2018
25%
20%
% Share Of The Total
15%
10%
5%
0%
2014 2015 2016 2017 2018 2019
Year
Funding amount Deal count 40

Average Ticket Size Reaches All-Time High
With $12 Mn as the average ticket size, a 40% higher compared to 2018,
enterprise tech funding saw exponential growth
$2.0 Mn
$1.5 Mn
$1.0 Mn
$0.5 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Stood All Time High In 2019

With $12 Mn as the average ticket size, a 40% higher compared to 2018,
enterprise tech funding saw exponential rise
$12.5 Mn
$10.0 Mn
Average Ticket Size
$7.5 Mn
$5.0 Mn
$2.5 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
41
Key Trends Observed
The enterprise tech sector which consists of

a wide array of sub sectors such as SaaS
(software as a service), HRTech (human
resource technology), marketing automation
etc. recorded a total funding of $1.15 Bn
across 114 deals in 2019. The compounded
annual growth rate of funding amount and
deal count in this sector between 2015 to
2019 was 15% and -12%.
With the funding amount secured by late

stage startups growing at 37%, the average
ticket size & median funding amount record
40% & 33% jump respectively.
Proactive push of the government towards

digitalisation of Indian economy, growing
digital presence of business and wider M&A
opportunity in this sector are the catalyst
fueling the growth of enterprise sector in
India.
Similar to the overall startup ecosystem,

preference of late stage investments over
seed and growth evident in enterprisetech.
The funding amount in late stage startups is
growing at a rate of 37% (2015-2019)
compared to 3% and -14% in growth and
seed stage respectively.
42
Ecommerce
$2.6 Bn 80 -0.3%
Total funding raised by startups in 2019 Unique ecommerce startups funded CAGR of funding amount
across 93 deals between 2015-2019
$3.1 Mn Delhi NCR

Median funding amount in 2019 Emerged as the startup hub for ecommerce startups
Udaan Firstcry Lenskart Cardekho Paytm Mall

$15.6 Bn 700
43
Ecommerce Deals Lowest In The Past 4 Years
While the funding amount surged by 10% in 2019 compared to 2018, deals have
been falling consistently — 48% lower compared to the 2016 which recorded the
most deals
$4 Bn 200
$3 Bn 150
Funding Amount
Deal Count
$2 Bn 100
$1 Bn 50
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Ecommerce Contribution To Total Funding

Goes Stagnant
While there has been a slight jump or fall in funding amount, the deals have
remained more or less around the same mark in the last three years
60%
40%
20%
0%
2014 2015 2016 2017 2018 2019
Year
Funding amount Deal count

44
Median Funding Amount Records 12% Jump
After falling in 2017, the median funding amount in ecommerce has grown
consistently. In 2019, it stood at $3.1 Mn, 45% higher than 2018
$5 Mn
$4 Mn
$3 Mn
$2 Mnt
$1 Mn
0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Recovering After 2018 Decline

Reporting a 36% rise compared to 2018, ecommerce startups recorded
$36 Mn as the average ticket size in 2019
$80 Mn
$60 Mn
Average Ticket Size
$40 Mn
$20 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
45
Key Trends Observed
Between 2014 and 2019 the share of

ecommerce startups to the total funding
amount and deal count in the Indian startup
ecosystem is 27% ($15.6 Bn) and 14% (700)
respectively — highest among other sectors.
In recent years the investment activity in this

sector is witnessing a slowdown primarily
due to the saturation of the market and high
operational cost, which are hampering the
financial performance of startups in this
space.
After a steep decline of 36% in total funding

amount, the capital inflow in the sector
seems to be recovering. At $2.6 Bn, the total
funding amount in 2019 was 10% higher
than the previous year.
The deal count has witnessed a decline of

14% from 2017 to 2019. The growing
popularity of sub-sectors such as vertical
ecommerce, social commerce and private
label are the driving forces behind the
recovery of the Indian ecommerce sector.
The growth in both the median funding

amount and the average ticket size of funding
is a result of investors focussing more on late
stage investments than seed and growth
stages.
As per our analysis, ecommerce funding

deals and amount for ecommerce stood at
38, $21.7 Mn for seed stage — the former
remain unchanged from 2018 while funding
amount fell by 53%, In the growth stage,
ecommerce saw 26 deals bringing in $677
Mn in funding, which is 24% lower than 2018
for the deals and a 33% growth for the
funding amount compared to 2018. With 24
deals and $1.9 Bn in funding amount for
late-stage ecommerce startups, 2019 was a
mixed bag as the deal count was 23% lower
and funding amount 5% higher in 2018.
46
Fintech
$2.6 Bn 106
Total funding raised by fintech Unique fintech startups funded
startups in 2019 across 125 deals
13% $8.3 Mn
CAGR of funding amount Median funding amount in 2019
between 2015-2019
Lending tech Delhi NCR

The fintech sub-sector with the most deals in 2019, Takes the crown of India’s fintech hub
followed by payments and insurance tech in terms of value of funding amount in
2019
Top 5 Funding Grossers Of 2019
Paytm DMI Finance Phonepe Incred Okcredit

$9.8 Bn 630
47
Fintech Deals Fell For The First Time In 5 Years
But the capital inflow was 71% higher in 2019 compared to 2018
$4 Bn 150
$3 Bn
100
Funding Amount
Deal Count
$2 Bn
50
$1 Bn
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Deal Share Dropped In Total Funding Deals

Between 2014 and 2019, the average share of fintech to the total funding amount
& deals was 15% & 13% respectively
25%
20%
15%
10%
5%
0%
2014 2015 2016 2017 2018 2019
Year
48
Median Funding Amount At All-Time High
The median funding amount for fintech startups grew at the rate of 29%
between 2015 and 2019
$10.0 Mn
$7.5 Mn
$5.0 Mn
$2.5 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Continues To Fluctuate

Reporting a 97% jump in 2019 compared to 2018, the average ticket size for
fintech stood at $25 Mn in 2019
$40 Mn
$30 Mn
Average Ticket Size
$20 Mn
$10 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
49
Key Trends Observed
Among the other startup sectors this is the

most impactful sector in the context of
economic disruption. The dream of digital
India can only be successful if the adoption
of fintech products in the country is steady
over a prolonged period. $2.6 Bn in total
funding was poured into fintech startups
across 125 deals in 2019, the funding
amount was 71% higher compared to 2018
whereas the deal count plunged by 9%
Lending tech and payments tech startups

are the primary factors responsible for the
positive trend behind this sector.
The median funding amount and average

ticket size of investments into fintech
startups stood at $8.3 Mn and $25 Mn in
2019. Both were significantly higher
compared to the previous years.
In terms of deals, with 61 deals, Growth

stage reported highest peak compared to
2018, while Seed stage deals reported 34
deals showing a downfall.
Deals poured in lending tech and payments

startups made 79% of the total deal count in
fintech (2019).
50
Consumer
Services
$993 Mn 61
Total funding raised by fintech Unique startups funded in
startups in 2019 across 75 deals consumer services
4% $5 Mn
CAGR of funding amount The median funding amount in
between 2015-2019 2019
Foodtech Delhi NCR

The sub-sector with the most deals in 2019, The hub with maximum deals in 2019
followed by hyperlocal
Grofers Bigbasket Zomato Urbanclap Dunzo

$5.6 Bn 602
51
Consumer Services Deals Continue To Plunge
On a yearly basis, funding amount in the sector is growing at 4% whereas
the deals are slowing down at 16%
$2.5 Bn 200
$2.0 Bn
150
Funding Amount
$1.5 Bn
Deal Count
100
$1.0 Bn
50
$0.5 Bn
$0.0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Share Of Consumer Services In Total Deals Drop

The average share of consumer services to total funding amount and deals
was 9% and 12% respectively between 2014 and 2019
25%
20%
15%
10%
5%
0%
2014 2015 2016 2017 2018 2019
Year
52
Median Funding Amount Records 50% Jump
Historic rise for consumer services with $5 Mn as the median funding
amount in 2019
$5 Mn
$4 Mn
$3 Mn
$2 Mnt
$1 Mn
0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Dropped By 82% For Consumer

Services
Compared to 2018's $35 Mn, in 2019, the average ticket size for consumer
services was $17 Mn in 2019
$40 Mn
$30 Mn
Average Ticket Size
$20 Mn
$10 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
53
Key Trends Observed
Consumer services sector which primarily

consists of foodtech and hyperlocal startups
seems to be struggling in the context of
capital inflow. Funding data for 2019
showcases that the amount and deal count
in the sector declined by 59% and 17%
respectively.
Fading investor confidence towards this

sector can be linked to high failure rate of
consumer services startups due to lower
profit margins and high operational costs.
Between the primary subsectors in this

domain — foodtech and hyperlocal, the
investor confidence towards foodtech
startups is likely to be higher given the
growing demand for online food delivery in
the country.
Contrary to the deal and funding amount

slowdown, the average ticket size witnessed
a steep decline of 52% in 2019 compared to
the previous year. On the other hand, the
positive trend in the median funding amount
can be linked to the higher concentration of
late stage deals in recent years.
In terms of funding stages, startups in the

late stage reported a 67% hike in deals.
While seed-stage deals plunged by 45%
54
Healthtech
$512 Mn 52
Total funding secured by healthtech Unique startups funded in 2019,
startups in 2019 across 62 deals compared to 66 of 2018
12% $4 Mn
CAGR of funding amount Median funding amount for
between 2015-2019 healthtech in 2019
46% Bengaluru
Contribution of capital poured into Cure.fit and 1mg Became the startup hub with
in 2019 to total funding amount maximum Bdeals
Cure fit 1mg Medlife Carestack Healthkart

$2 Bn 441
55
Healthtech Funding On The Decline
Both deals and amount for healthtech dropped by 17% and 4% in 2019
compared to 2018
$600 Mn 125
100
$400 Mn
Funding Amount
75
Deal Count
50
$200 Mn
25
$0 Mn 0
2014 2015 2016 2017 2018 2019
Year
Healthtech Share In Total Funding Going Flat

Overall, the average share of healthtech investments in total amount and
deals stood at 3% and 9% respectively between 2014 to 2019
13%
10%
8%
5%
3%
0%
2014 2015 2016 2017 2018 2019
Year
56
Median Funding Amount At Its Peak
As per the historic data, the median funding amount for healthtech is
growing at a rate of 64%
$4 Mn
$3 Mn
$2 Mn
$1 Mn
0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Stood 28% Higher Than 2018

Continuing growth for the third year in a row, average ticket size for healthtech
was $11 Mn in 2019
$12.5 Mn
$10.0 Mn
Average Ticket Size
$7.5 Mn
$5.0 Mn
$2.5 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
57
Key Trends Observed
As per the economic survey 2017-18, the

private consumption expenditure towards
healthcare is growing at a CAGR (FY’12 to
FY’16) of 13% higher than other primary
commodities. This is a crucial indicator of
the growing demand towards healthcare
products and services in the economy.
Between 2018 to 2019 both the funding

amount and deal count had plunged by 4%
and 17% for healthtech.
The policy uncertainty towards epharmacy

played a crucial role in depleting the investor
confidence towards this sector. Online
pharmacy was also a major sub-sector in
this domain spearheading the growth of the
overall sector. Although the overall funding
capital inflow in this subsector surged almost
2.7x in 2019, compared to the previous year.
This was primarily due to high value funding
rounds in established names like 1mg and
Medlife.
Despite a downfall in the funding amount

and deal count between 2018 to 2019 the
median funding amount and average ticket
size of funding deals in these sectors is
showing a positive trend, indicating higher
probability of increased volume of capital
inflow in the coming years.
In terms of stages, late stage recorded 6

deals and $294 Mn funding amount recording
a 40% and 1% fall compared to 2018. While
for growth and seed, the deals stood at 24
and 27 in 2019 respectively.
58
The Next-In-Line
Sectors
New-Age Tech Startups Attract Big Investments

In Urban India
Among the emerging sectors, the fastest growth rate for capital inflow (2014-19)
is seen in edtech (46%), logistics (24%) and media and entertainment (14%)
$2.0 Bn
$1.5 Bn
Funding Amount
$1.0 Bn
$0.5 Bn
$0.0 Bn
2014 2015 2016 2017 2018 2019
Year
Media and Entertainment Deeptech Transport Tech

Edtech Logistics
26% 3x
The share of the sectors outside the top five sectors Surge in the funding amount of transport tech
in total funding raised in 2019 was 7% higher than startups compared to 2018, explained by high value
the previous year funding rounds in electric mobility and ride-sharing
startups
59
Deeptech Startups Attracting More Deals
The growing demand for AI/ML in enterprise tech, consumer services,
transport and other sectors is fuelling the high CAGR in funding deals for
deeptech startups
100
75
Deal Count
50
25
0
2014 2015 2016 2017 2018 2019
Year
Media and Entertainment Deeptech Transport Tech

Edtech Logistics
60
Demography
Top Startup Hubs Of
India
61
77% Bengaluru Pune
Share of Delhi NCR & Bengaluru Secured a total funding of $5.3 Bn Recorded highest growth in
in total funding raised in 2019 across 267 deals to become the top funding amount amongst
hub in 2019 other hub
$25 Mn Chennai
Average ticket size of funding Witnessed 31% drop in funding deals
deals in Bengaluru
Bengaluru Keeps The Crown

Bengaluru startups secured the most funding in 2019 with $5.3 Bn across 267 deals,
compared to 226 deals recorded by Delhi NCR startups
2014
2015
Funding Amount
2016
2017
2018
2019
0% 25% 50% 75% 100%
Year
Bengaluru Delhi NCR Mumbai Pune Chennai Others
62
Bengaluru Grabs Over Half Of The Total Deals
With 1,745 deals, the share of Bengaluru in the total deals recorded between
2014-2019 stood at 35%
2014
2015
2016
Deal Count
2017
2018
2019
0% 25% 50% 75% 100%
Year
Bengaluru Delhi NCR Mumbai Chennai Hyderabad Others
$11 Bn Secured By Top 3 Hubs In 2019

Bengaluru, Delhi NCR, & Mumbai grabbed 87% of the total funding secured in 2019
Bengaluru
Delhi NCR
Startup Hubs
Mumbai
Pune
Hyderabad
Others
$0 Bn $2 Bn $4 Bn $6 Bn
Funding amount
63
Top 3 Hubs Had 84% Share In Total Deal Count
Bengaluru, Delhi NCR & Mumbai together recorded 644 deals and had 84%
share in total unique startups funded in 2019
Bengaluru 267
226
Delhi NCR 226

194
Startup Hubs
Mumbai 151
136
Pune 28
25
25
Hyderabad
23
69
Others
60
0 100 200 300
Number Of Deal Count And Unique Startups Funded

Unique Startups Funded Deal Count
64
65
Bengaluru
$5.3 Bn 226 10%

Total funding raised by Bengaluru startups Unique Startups Funded CAGR (2015-2019) of
in 2019 across 267 deals funding amount
$25 Mn Fintech 420

Average ticket size of funding With 49 deals, fintech recorded Unique investors
amount in 2019 maximum investment in participated in startup
Bengaluru in 2019 funding
Seed Funding
Hit all-time low
Udaan Ola PhonePe Byju’s BigBasket

$26 Bn 1,745
66
$5.3 Bn Secured By Bengaluru Startups
As per 2015 to 2019 data, the CAGR of the funding amount recorded 10%
growth, while the deals have been diminishing by 4%
$8 Bn 500
400
$6 Bn
Funding Amount
300
Deal Count
$4 Bn
200
$2 Bn
100
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Record 13% Growth

Thanks to the rise in late-stage investments, the average ticket size of funding
deals rose to $25 Mn for Bengaluru in 2019
$40 Mn
$30 Mn
Average Ticket Size
$20 Mn
$10 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
67
Bridge Funding Records 40% Growth
With a 9% raise in funding deals in 2019, Bengaluru recorded 40% CAGR
in funding secured at the bridge stage from 2015-2019
50%
40%
30%
CAGR (2015-2019)
20%
10%
40%
30%
1%
0%
-9%
-10%
Funding Stage
Seed Funding Crunch Hits Bengaluru Hardest

Going below the average of 135 unique startups funded at seed stage (2014-2019),
Bengaluru recorded funding of just 90 seed stage startups, a 33% fall
40%
20%
CAGR (2015-2019)
10%
22%
17%
0%
0%
-15%
-10%
-20%
Bridge Stage Late Stage Growth Stage Seed Stage
Funding Stage
68
Unique Startups Funded At Seed & Growth Stage
Report Decline
Bengaluru's seed and growth ecosystem record decline in the unique startups
funded in 2019 with just 90 and 86 startups getting funded respectively
40%
20%
CAGR (2015-2019)
10%
22%
13%
0%
-2%
-14%
-10%
-20%
Bridge Stage Late Stage Growth Stage Seed Stage
Funding Stage
Key Trends Observed
Between 2014 and 2019 the Bengaluru

startup ecosystem made 45% ($26 Bn) and Health Of Bengaluru’s
35% (1,745) of the total funding amount and
deal count in India. Startup Ecosystem
A robust startup ecosystem and wider
adoption of tech products in the city has
made Bengaluru the startup capital of India.
However, from 2018 onwards, the funding
activity in the city looks stable with minimal
fluctuations in both funding amount and deal The opportunity for investment into new ventures
count. is shrinking in Bengaluru. This is apparent when
looking at the CAGR of unique startups funded at
Looking at the growth rate of funding the seed stage in comparison to bridge (primarily
amount, deal count and unique startups Pre-Series A) and late (Series C and beyond)
funded, it can be ascertained that the seed- stages. In the case of the seed stage, the CAGR
stage ecosystem in the city is struggling. The from 2015 to 2019 was -14%, whereas for bridge
slowdown of seed-stage investments is not and late-stage investments were 22 and 13%
exclusive to Bengaluru, but also noticeable respectively. Also, the number of seed-stage
in other Indian startup hubs. funded startups went below 100 for Bengaluru for
the first time since 2015.
Interestingly, the growth stage recorded the
highest growth in 2019 for Bengaluru, with In the seed stage, the confidence towards
105 deals and $2.4 Bn amount being enterprise tech startups in Bengaluru continues to
recorded compared to 2018’s 98 deals and remain high, as this was the top sector in terms of
$1.3 Bn. startup funded at seed stage in the city in 2018 as
well.
In terms of sectors, fintech reported
maximum deals in Bengaluru with $856 Mn
Deeptech ended up in the second spot in terms of
being invested.
startups funded at the seed stage in 2019 fuelled
Highest number of deals recorded at the by the growing demand for AI/ML-based solutions.
seed stage were for enterprise tech startups. On the other hand, fintech, which was second in
While fintech and consumer services sectors 2018, came down to fourth in 2019, as the count
proved to be popular at growth and late of unique startups funded at seed stage plunged
stage. by 41%.
69
Bengaluru Worst Hit By Seed Funding Crunch
Going below the average of 135 unique startups getting funded at seed stage between
2014-2019, Bengaluru recorded lowest funding with just 90 startups getting funded,
a 33% fall
300
200
100
0
2014 2015 2016 2017 2018 2019
Year
The average annual count of unique startups funded for the city between
2014 to 2019 was 246
Seed
393
Growth
198
Late
47
70
71
Delhi NCR
$4.5 Bn 194 5%
Total funding raised by startups in 2019 Unique startups funded in 2019 CAGR of funding amount
across 226 deals recorded between 2015 to
2019
$25 Mn Ecommerce 358

The average ticket size of funding Recorded highest deal count in 2019 Unique investors participated
amount in 2019 in funding in 2019
Paytm Renew Power Delhivery Lenskart DMI Finance

$20 Bn 1,442
72
Delhi NCR Funding At All-Time High
Despite 8% fall in funding, the funding amount recorded a 5% jump in
funding in 2019
$5 Bn 400
$4 Bn
300
Funding Amount
$3 Bn
Deal Count
200
$2 Bn
100
$1 Bn
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Delhi NCR Matches Bengaluru In Average

Ticket Size
With a 2% spike in average ticket size in 2019, Delhi NCR had an average
funding ticket size of $25 Mn
$30 Mn
$20 Mn
Average Ticket Size
$10 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
73
Growth Stage Funding Faces Downfall In Delhi
Despite growth in bridge (24%) and seed (5%) rounds, growth-stage funding
faced 4% downfall in funding for Delhi NCR in 2019
30%
CAGR (2015-2019)
20%
10%
24%
8%
5%
0%
-4%
-10%
Bridge Stage Late Stage Seed Stage Growth Stage
Funding Stage
Late Stage Funding In Delhi NCR Picks Up Pace

With overall fall in seed funding, seed stage startups in Delhi NCR recorded
97 deals, 16% lower compared to the previous year
15%
10%
5%
CAGR (2015-2019)
13%
0%
0%
-14%
-6%
-5%
-10%
-15%
Seed Stage Bridge Stage Late Stage Growth Stage
Funding Stage
74
Seed Stage & Growth Stage Crunch Hits Delhi NCR
In terms of deals and unique startups funded, Delhi NCR faces downfall;
CAGR stood at -15% and -2% for seed and growth stage from 2015-2019 respectivly
15%
10%
CAGR (2015-2019)
5%
12%
0%
0%
-15%
-2%
-5%
-10%
-15%
Late Stage Bridge Stage Growth Stage Seed Stage
Funding Stage
Key Trends Observed
The advantages of being the national capital

are obvious but there are a number of other
Health Of Delhi NCR’s
factors pushing Delhi NCR to the top and
closer to Bengaluru. These include high- Startup Ecosystem
speed connectivity, high per capita income
(NSDP) of $4,686 which is 2.63x higher than
the average in other Indian states.
From 2014 to 2019 both the funding amount Even as late-stage funding grew with the likes of
and deal count witnessed moderate change Paytm, Renew Power and Delhivery raising funds,
year-on-year with a total of $20 Bn being seed funding fell. Just like across most hubs, the
invested across 1,442 deals. crunch in seed-stage investment in Delhi is evident
from the count of unique startups funded at seed stage
diminishing at -15% (CAGR 2015 to 2019) contrary to
Established startups in the city is growing,
the positive growth rate of 12% for late-stage startups.
the total deal count in late-stage startups for
In the case of the year-on-year growth of funding, the
2019 was 43, 5% increase compared to the
amount is similar, with funding amount for late-stage
previous year.
rounds growing at 8%, which is relatively higher than
seed-stage funding which has CAGR of 5%.
Overall, in terms of funding stages, seed
rounds had the most number of deals (16% For Delhi, the count of unique startups in enterprise
fall compared to 2018). Enterprise tech and tech, ecommerce and fintech were the highest at seed
fintech accounted for 34% of the total seed stage in 2019. When it comes to average ticket size,
stage deals in 2019. Delhi with $20 Mn was ahead of Bengaluru ($19.85
Mn) and Mumbai ($8.6 Mn). This also indicates funding
Looking at sectors, real estate tech startups predominantly for late-stage startups. Among late-
recorded the biggest surge in funding deals stage startups, the count of funded startups in
with a 60% jump, while travel tech recorded ecommerce, real estate tech and fintech sectors was
the biggest downfall in terms of deals. higher than others.
75
Seed Funding Crunch Hits Delhi NCR
Even as late-stage funding grew with the likes of Paytm, Renew Power and Delhivery
raising funds, seed funding fell by 14% compared to last year
200
Count Of Unique Startup Funded
150
100
50
0
2014 2015 2016 2017 2018 2019
Year
The average annual count of unique startups funded for the city between 2014 to 2019
was 207
Seed
581
Growth
225
Late
71
76
77
Mumbai
$1.25 Bn 136 4%
Total funding raised by startups in 2019 Unique startups funded CAGR of funding amount
2019
$11 Mn Fintech 249

Average ticket size of funding Recorded highest deal count in 2019 Unique investors participated
amount in 2019 in startup funding in Mumbai
in 2019
Enterprisetech
Recorded downfall in deals moving from second spot in
2018 to fifth in 2019
InCred Acko Clevertap Instarem Eruditus

$5.7 Bn 964
78
Mumbai Outpaces Metros In Funding Growth
With a 27% rise in funding amount (2018-2019) Mumbai startups record the
highest growth in funding amount among the top three metro cities
$1.5 Bn 200
150
$1.0 Bn
Funding Amount
Deal Count
100
$0.5 Bn
50
$0.0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Surges In Mumbai But Still

Relatively Small
Mumbai startups had $11 Mn average ticket size in 2019, which is less than half of
Delhi NCR & Bengaluru — $25 Mn
$12.5 Mn
$10.0 Mn
Average Ticket Size
$7.5 Mn
$5.0 Mn
$2.5 Mn
$0.0 Mn
2014 2015 2016 2017 2018 2019
Year
79
Late Stage Funding Amount Dropping In Mumbai
Between 2017 and 2018, the CAGR of late stage funding recorded a negative
growth rate of 11%
40%
20%
CAGR (2015-2019)
36%
19%
10%
0%
-11%
-20%
Bridge Stage Growth Stage Seed Stage Late Stage
Funding Stage
Seed Stage Funding In Mumbai Falling Quickly

Compared to the other three stages, seed stage CAGR stood at -17% for
2015 to 2019 for Mumbai startups
20%
10%
CAGR (2015-2019)
19%
3%
5%
0%
-17%
-10%
-20%
Funding Stage
80
Mumbai’s Seed Stage Unique Deals Record
Negative CAGR
Just 54 unique startups were funded at seed stage in Mumbai last year
compared to 71 of 2018
20%
10%
CAGR (2015-2019)
19%
4%
4%
0%
-17%
-10%
-20%
Funding Stage
Key Trends Observed
The advantages of being the national capital In terms of sectors, ecommerce startups grabbed the
are obvious but there are a number of other most number deals at the seed-stage, while the fintech
factors pushing Delhi NCR to the top and sector recorded the most number of deals overall and
closer to Bengaluru. These include high- had the biggest share of the funding amount in 2019.
speed connectivity, high per capita income
(NSDP) of $4,686 which is 2.63x higher than
Health Of Mumbai’s
the average in other Indian states.
In 2019, the funding amount in Mumbai

surged by 27% in 2019 compared to the Startup Ecosystem
previous year. On the other hand, the deal
count witnessed a moderate decline of 11%.
Similar to Bengaluru, the investment activity

in the seed stage startups of Mumbai seems
to be slowing down. In comparison to Delhi and Bengaluru, Mumbai seems
to have a lesser disparity in the ratio of startups in late-
stage to startups in the seed-stage over the past five
46% of the total funding deals were Series A years (2014-2019).
and above rounds in 2019 showing that
investors prefer backing mature startups While Bengaluru seems to be seed-stage dominant as
rather than Pre-Series or seed-stage far as deal count is concerned over the past five years,
startups. Mumbai has a lesser degree of skewness in its funnel.

However, this could be down to the fewer deals in
While seed funding has fallen in all metros, Mumbai startups in comparison to Bengaluru.
Mumbai has shown a steep 22% decline in
count of startups funded at this stage Even though the funding amount went up in 2019, the
compared to 2018. On the other hand, average ticket size of $11 Mn shows that the funding is
startups that have passed through this stage reserved largely for bridge stage deals. Late stage and
previously are reaping the rewards with 14% growth stag had moderate growth, but the lack of seed
surge bridge funding in 2019 year-on-year. deals in 2019 has really hurt the overall growth of the
Mumbai startup ecosystem.
81
Count Of Unique Startups Funded In Seed Stage Lowest
In 2019 Between 2015 to 2019
24% decrease in count is the higher than both Bengaluru and Delhi NCR
125
100
Count Of Unique Startups Funded
75
50
25
0
2014 2015 2016 2017 2018 2019
Year
The average annual count of unique startups funded for the city between 2014 to 2019
was 142
Seed
393
Growth
198
Late
47
82
83
Chennai
$299 Mn 23 -9%
Total funding raised by startups in 2019 Unique startups funded CAGR of funding amount
2019
$14 Mn Fintech 44
Average ticket size of funding Recorded highest deal count in 2019 Unique investors participated
amount in 2019 in funding rounds in 2019
Freshworks Uniphore Vue.ai Waycool Vivriticapital

$1.5 Bn 184
84
Chennai Reports Downturn In Funding
After a splendid 2018, the funding amount and deal count reported 20% and
31% decline in 2019
$500 Bn 50
$400 Bn 40
Funding Amount
$300 Bn 30
Deal Count
$200 Mn 20
$100 Mn 10
$0 Bn 0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Grows For Chennai Startups

Rising by 18%, the average ticket size for Chennai's startups stood at $14 Mn
$15 Mn
$10 Mn
Average Ticket Size
$5 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
85
Chennai's Bridge Funding On The Fall
Based on 2015-2019 data, the bridge funding recorded negative CAGR of
-44% for Chennai
0%
-1%
-3%
-22%
-10%
CAGR (2015-2019)
-20%
-30%
-40%
-50%
Late Stage Seed Stage Growth Stage
Funding Stage
Chennai's Seed Funding Takes A Hit

As per 2015 to 2019 data, the CAGR of seed funding deal count reported
-18% growth rate
0%
-10%
-13%
-18%
-5%
CAGR (2015-2019)
-10%
-15%
-20%
Growth Stage Late Stage Seed Stage
Funding Stage
86
Unique Startups Funded Fall Across Stages In
Chennai
The growth rate of unique startups funded, seed recorded -17% growth rate
while for growth and late stage it stood at -10%
0%
-10%
-17%
-10%
-5%
CAGR (2015-2019)
-10%
-15%
-20%
Growth Stage Seed Stage Late Stage
Funding Stage
Key Trends Observed
Among the other top hubs of Indian startup 95% ($285 Mn) of the total funding amount was in
ecosystem, the investment activity in Series A and above rounds in 2019.
Chennai’s startup ecosystem is falling at a
faster rate. This can be ascertained from the
While seed stage recorded a 49% decline in funding
fact that both the value of funding amount
amount, late stage had a 17% surge in 2019 compared
and count of funding deals are diminishing at
to 2018.
a negative rate (2015-2019) of 9% and 14%
respectively.
As a result, both the funding amount ($299

Mn) and deal count (24) plunged 20% and
31% in 2019 compared to the previous year.
Although the average ticket size of
investments is soaring due to higher
concentration of outliers.
A negative trend is evident across all funding

stages for Chennai’s startup ecosystem, as
seen in the recorded growth rates of various
indicators.
46% of the total funding deals were Series A

and above rounds in 2019 showing that
investors prefer backing mature startups
rather than Pre-Series or seed-stage
startups.
87
88
Hyderabad
$154 Mn 23 37%
Total funding raised by startups in 2019 Unique startups funded CAGR (2015-2019) of funding
across 25 deals amount
$7 Mn Enterpriset Tech 47
Average ticket size of funding Had the highest deal count in 2019 Unique investors invested in
amount in 2019 Hyderabad based startups in
2019
Zenoti Bulbul Apps Darwinbox Subk WhistleDrive

$1.2 Bn 171
89
After Rough 2018, Hyderabad Funding Charges Up
Despite fall in deal count, Hyderabad startups garnered $154 Mn in funding,
a 67% rise from 2018
$400 Mn 50
40
$300 Mn
Funding Amount
30
Deal Count
$200 Mn
20
$100 Mn
10
$0 Mn 0
2014 2015 2016 2017 2018 2019
Year
Average Ticket Size Continues To Decline For

Hyderabad
With $7.7 Mn average ticket size, Hyderabad reports decline of 8% in 2019
compared to 2018
$20 Mn
$15 Mn
Average Ticket Size
$10 Mn
$5 Mn
$0 Mn
2014 2015 2016 2017 2018 2019
Year
90
Late Stage Shows Phenomenal Performance In
Hyderabad
The CAGR for late-stage funding amount showed 112% growth rate between
2015-2019 with about $80.5 Mn going into late stage in 2019 alone in Hyderabad
125%
100%
75%
CAGR (2015-2019)
50%
25%
112%
26%
0%
-1%
-25%
Late Stage Growth Stage Seed Stage
Funding Stage
Late Stage Deals Skyrockets For Hyderabad

With a 32% CAGR for 2015-2019, Hyderabad's late stage ecosystem flourishes
40%
20%
CAGR (2015-2019)
32%
15%
0%
-20%
-20%
Funding Stage
91
Hyderabad’s Seed Stage Ecosystem In Hot Water
The -18% CAGR in unique startups funded from 2015-2019 shows Hyderabad's
seed stage ecosystem is going through a major crunch
20%
10%
CAGR (2015-2019)
19%
15%
0%
-18%
-10%
-20%
Funding Stage
Key Trends Observed
2016 and 2017 were the best year for

Hyderabad based startups in terms of capital
inflow. The funding amount and deal count
poured during this interval made 57% of the
total investments in the city between 2014 to
2019, whereas in case of deal count the
contribution was 46%.
Healthtech with approximately $13 Mn in

total funding was the top sector at seed
stage whereas, enterprisetech topped the
chart at both growth and late stage.
Being one of the prominent IT hubs of India

alongside Bengaluru. The availability of
quality tech workforce can give the startup
ecosystem of the city a much needed boost.
Although several government initiatives like
T-Hubs are already in place but a more
proactive approach is required from the

government side. In order to take the startup
ecosystem of the city at par with its metro
peers— Bengaluru, Delhi NCR and Mumbai
92
Indian Startup Hubs
Tier 1 Vs Mid-Tiers
87% $243 Mn
Contribution of Bengaluru, Funding secured by mid-tier
Delhi NCR and Mumbai to the startups across 32 deals in 2019
total funding amount
31%
Decline in total funding
Info Edge
Most active investor in mid-tier
amount poured in startups cities
based out of mid-tier cities in
2019 compared to 2018
Ecommerce 21
& Agritech
Deals secured at
seed stage
Sector with maximum deals in

mid-tier cities
93
Mid-Tier Cities Outpace Tier 1 In Capital Inflow
Against 8% CAGR of funding amount in Tier 1 cities, mid-tier cities reported
12% growth rate between 2015 and 2019
12%
12
10%
8%
CAGR (2015-2019)
6% 8
4%
2%
0%
Tier 1 Cities Mid-Tier Cities
Tiers
Unique Startup Funding Shoots Up For Mid-Tier

Cities
Mid-tier cities showed signs of growth with 3% CAGR between 2015-2019
compared to -6% growth rate for Tier 1 cities
4%
3
2%
CAGR (2015-2019)
0%
19%
-17%
-2%
-4%
-6
-6%
Tier 1 Cities Mid-Tier Cities
Tiers
94
Tier 1 Cities Still Dominate Funding
Based on 2014-2019 data, Tier 1 cities took away $57 Bn, a whopping 98%
of all funding secured by Indian startups
Mid-Tier Cities
1.7%
97.9%
Tier 1 Cities
Mid-Tier Cities Carve Out Tiny Share In Total Deals

According to 2014-2019 data, mid-tier cities recorded mere 196 deals of the total
5,011 deals recorded during the said period
Abroad
Mid-Tier Cities
0.7%
3.9%
95%
Tier 1 Cities
95
Going Beyond
The Top 3
The startup ecosystem in Bengaluru, Delhi NCR and
Mumbai have always enjoyed bigger socio-economic
perks than any other startup ecosystem in the country.
The primary factors responsible for the thriving startup

ecosystem in these three cities are — availability of
adequate venture capital, higher spending power of the
inhabitants and a robust tech infrastructure. The
dominance of these three hubs of Indian startup
ecosystem can be ascertained from the fact that the
investment activity in Bengaluru, Delhi NCR and Mumbai
makes up 89% ($52 Bn) of the total funding, 84% of the
total deal count between 2014 to 2019.
Top 3 Hubs Accounted For Most Of The

Total Funding
From 2014-2019, Bengaluru, Delhi NCR and Mumbai took away $52 Bn
of the total $58 Bn raised by Indian startups
100%
75%
Funding Amount
50%
25%
0%
2014 2015 2016 2017 2018 2019
Year
Bengaluru, Delhi NCR & Mumbai Others
96
Top 3 Hubs Contributed Majority To Total Deals
Despite initiation of several new policies and activities to boost the startup
ecosystem, cities beyond the top three recorded just 827 deals between 2014-2019
100%
75%
Deal Count
50%
25%
0%
2014 2015 2016 2017 2018 2019
Year
Others Bengaluru, Delhi NCR & Mumbai
Key Trends Observed
Although high value venture capital inflow is

still largely cornered by the top three hubs,
the frequency of investment activity is rising
in the three other city hubs — Pune,
Hyderabad and Chennai.
The median funding amount for Pune stood

at $6.5 Mn in 2019.
With 76% CAGR recorded between 2015 to

2019 in median funding amount, Ahmedabad
outpaced Bengaluru, Delhi NCR and
Mumbai.
With $1.3 Bn funding, Pune, Hyderabad and

Chennai recorded 2x growth in 2019
compared to 2018.
97
Pune, Hyderabad &
Chennai: The Next In Line
Pune & Hyderabad's Growth Rate Outpaces Other

Hubs
With 45% CAGR, Pune had the highest growth rate compared to other hubs
during 2015-2019
50%
CAGR (2015-2019) Of Funding Amount
45
40%
37
30%
20%
-17%
10% 7
7 7
0%
-9
-10%
Pune Hyderabad Chennai
Hubs
CAGR (2015-2019) Median CAGR of other hubs
*other hubs include top 8 startups hubs of India © Inc42 Media | not for distribution
98
Pune, Hyderabad & Chennai Had 8% Share In
Total Funding
Between 2014 and 2019, startups in these 3 hubs recorded $4.5 Bn in funding
$2.0 Bn
$1.5 Bn
Funding Amount
$1.0 Bn
$0.5 Bn
$0.0 Bn
Pune Chennai Hyderabad
Hubs
Pune, Hyderabad & Chennai Had 10% Share In Total

Funding Amount
In 2019, the three hubs recorded $1.3 Bn in funding amount, 2x higher than 2018
Pune and Hyderabad

0.7%
89.7%
Others
99
Yea r
2019
Pune
Chennai
Hyderabad
Dea l Cou n t
33%
47%
-31%
Growth From 2018 To
Un i qu e S t a r t u ps
Fu n ded
25%
35%
-26%
100
Investor
Participation
Analysis
& The Top 10 VCs
101
892 2
Unique Investors participated Deals taken per investor in
in startup funding in 2019 2019, compared to 1.6 in 2018
71%
Decline in unique angel
20%
Contribution of top 5 venture
investor participation in 2019 capital firms to total deal count in
compared to previous year 2019
Unique Investor Participation At All-Time Low

In India (2015-19)
Compared to 993 investors participating in startup funding in 2018, 2019 had
892 investors who participated in startup funding
2500 2.5
Deal Participation And Unique Investors
2000 2.0
Deal Taken Per Investor
1500 1.5
1000 1.0
500 0.5
0 0.0
2014 2015 2016 2017 2018 2019
Year
Total Investor Participation in Deals Total Unique Investors Deal taken per investor
102
Angel Investor Participation Falls Drastically
From 42% share among total investors in 2018, the angel investor participation
was just 13.5% in 2019, the lowest since 2014
Total Unique Angels

13.5%
86.5%
Total Unique VCs & Corporates
Angel Investor Share Among Investor Base At

Its Lowest
In 2019, angel investor participation in startup funding was lowest in the
recorded period, with just 120 angels participating in funding deals
100%
75%
% of Investors
50%
25%
0%
2014 2015 2016 2017 2018 2019
Year
Angel Investors Other Investors
103
India's Most Active VC Firms Of 2019
VC Name 53 45 Consumer, Healthtech
Number of Deals
Key Sectors
Notable Startups
Startups Funded
38 36 Consumer, SaaS
26 23 B2B, Fintech
20 20 Healthtech, Fintech
20 19 Consumer, B2B
17 13 B2B, Healthttech
16 15 Education, New Economy
15 13 Consumer, Media & Content
15 13 Data & AI, Consumer
14 14 Consumer, Ecommerce
104
105
Acquisitions
Mergers And
629 23%
Total M&As recorded between Decline in M&A activity in
2014 to 2019 enterprise tech startups in 2019
compared to 2018
Bengaluru 35%
Recorded the most number of M&As Share of enterprise tech and
media & entertainment in total
M&As recorded in 2019
M&As At 5-Year Low In 2019

With just 111 deals, Indian startup ecosystem recorded lowest M&As in the
last five years
150
149
128
124
117
100
111
M&As Count
50
0
2015 2016 2017 2018 2019
Year
106
Enterprise Tech Record Highest M&As
With 138 deals and 21.9% share in total M&A deals between 2014-2019,
enterprise tech took the lead
Enterprise Tech
21.9%
38.2%
Others
15.7%
Consumer Services
7.3%
Deeptech
7.9% 8.9%
Fintech Ecommerce
Top 3 Hubs Accounted For 70% Of The Total M&As

Bengaluru, Delhi NCR & Mumbai alone recorded 442 M&As, occupying the
majority share in the 629 M&As recorded between 2014-2019
Bengaluru
27.0%
29.7%
Others
17.6%
Mumbai
25.6%
Delhi NCR
107
India As A
Startup Hub
A Comparison
108
In 2019, India became the 5th most startup-
friendly economy in the world based on five
parameters:
Top networks/platforms that invested in 2018
Human Capital Investment

Research And Development
Entrepreneurial Infrastructure
Technical Workforce
Policy Dynamics
Despite trailing the USA, the UK, Canada and Israel, In 2019, India has 31 unicorns with seven startups
India has come a long way with the support of several joining the club in the year. Amid all this fervour, it is
homegrown and international venture funds, important to take a step back and reflect on the
conglomerates and enterprises, government-backed growth factors — market and economic — that are
measures such as Startup India, Make in India, Digital driving or deterring the startup economy in India.
India and more, and domain-focussed initiatives which
in turn have helped foster a culture of entrepreneurship
and innovation in India.
In short, India’s startup economy has been booming.
Market
India is often described as the poster child of emerging
markets for its vast commercial potential for tech
products and services. In a country with a population
Parameters
of nearly 1.3 Bn people, even niche products can
have a significant addressable base.
Market Parameters
At A Glance
C o unt r y India India is one of the fastest-growing economies in the
world and is perceived as being capable of offering an
Population (Bn) 1.35 abundance of opportunities for tech companies.
Population Below 24 Years Of Age 44.77% As the Indian economy continues to grow, disposable
income and purchasing power are increasing steadily.
This rising consumption is driven by the growth of
Median Age 28.1
upper-middle income and high-income segments of
the population, both of which are expected to grow
Population Growth 1.14% from one in four households today to one in two
households by 2030.
Urban Population 34.50%
Along with this, the population demography is another
Urban Population Growt 2.37% advantage. Half of the country’s population is below
the age of 25 years with a median age of 28 years. In
Internet Users terms of urban population growth, internet user base
560 Mn
and smartphone user base, India is second in the
world among all nations. Understandably, this has
Smartphone Users 345.92 made companies and startups gravitate to India.
109
Canada
10
8
United States China
2
United Kingdom Germany
Japan India
Israel Indonesia
Population (Mn) 0-24 age poppulation Median Age

Poppulation growth Urban poppulation Urban poppulation Growth
Internet Users (Mn) Smartphone Users (Mn)
Economic
Parameters
India’s huge diversity in culture, language, ethnicity and religions
is both a curse and a blessing for startups. On the one hand, a
startup’s understanding of customers or consumers is often
limited to specific regions, with their unique local languages and
local customs. This makes it hard for startups to scale their tech
products to customers across the country.
While there is a huge need for innovative solutions, particularly

those that alleviate poverty and improve the inclusion metrics,
India needs to be infrastructure-ready for innovations to flourish.
Given the scale of the Indian market and its resource constraints,
low-cost, high-impact solutions are the need of the hour. This
requires a huge push from the government in making Indian
economy ready for its market to reach full potential.
110
Economic Parameters
At A Glance
C o un t r y India While India undoubtedly has the potential, it still
trails other countries in terms of key economic
GDP (Billions, PPP) $9,459 indicators such as GDP per capita (PPP), inflation,
tariff rates, and corporate tax rate. These indicators
are the worst amongst countries India’s economy is
GDP Growth Rate (%) 6.7
being compared tol, including Canada, China,
Germany, India, Indonesia, Israel, Japan, UK and
5 Year GDP Growth Rate (%) 7.2 the US.
GDP per Capita (PPP) $7,183
Unemployment (%) 3.5
Inflation (%) 3.6
FDI Inflow (Millions) 39,916.10
Tariff Rate (%) 6.3
Income Tax Rate (%) 30.9
Corporate Tax Rate (%) 32.4
Canada
10
8
United States China
2
Japan India
Israel Indonesia
GDP (Billions, PPP) GDP Growth Rate (%) 5 Year GDP Growth Rate (%)
GDP per Capita (PPP) Unemployment (%) FDI Inflow (Millions)
Inflation (%) Tariff Rate (%) Corporate Tax Rate (%)
Income Tax Rate (%)
111
Economic supposedly the fifth most startup-friendly economy
Indexes
globally, this is a poor rank and highlights the slow growth
rate of the tech economy despite the ripe consumer
market. This lack of innovation is clearly depicted by India’s
relatively low expenditure on research and development.
Research firm Heritage.org ranks various

countries on 4 parameters:
Rule of Law: Degree of a country’s legal protection of

private property rights
Limited Government: How free is a country from tax

The Narendra Modi-led government that assumed power burden and government expenditure
in 2014 has put digital transformation at the centre of its
plans. The central government has recognised startups as Regulatory Efficiency: How free is a country from legal
one of the most important engines for economic growth. regulation
Moreover, startups are expected to create jobs that will
narrow the high unemployment rate in the country. Open Markets: A country’s independence from
government control and interference
Yet in 2019, India hit the highest unemployment rate seen
in the last 3 years i.e 8.5% (September 19). In 2019, for
ease of doing business, India moved to 63rd rank out of
190 countries climbing only 14 points in the ranking
compared to 23 points in 2018.
As per the Global Innovation Index 2019, India stood at

the 52nd position out of a total of 129 countries for
capacity and success in innovation. For a country that is
Canada
8
United States 6 China
Japan India
Indonesia
Israel
Rule of Law Limited Government Regulatory Efficiency Open Markets
112
India is ranked as “worst” when it comes to open market and
regulatory efficiency despite having China in comparison, as per
Heritage.org.
Besides infrastructure another deterrent to the growth of startup

economy is expenditure to R&D. India’s expenditure on R&D
continues to be as low as 0.6% - 0.7% of the GDP, much lower
than countries like South Korea at 4.3%, Israel at 4.2% and
Japan at 3.4%. The worst part is that this low spending D has
been stagnant at 0.6%-0.7% for the last two decades.
Top 5 Countries R&D (as a % of GDP)

5%
4%
4.3%
4.2%
3.4%
3%
3.2%
3.2%
2%
1%
0%
South Korea Israel Japan Switzerland Finland
The lack of quality research is evidenced by the fact Uber Ola

that many of Indian startups are imitations of
successful global ideas fine-tuned to serve local Spotify Gaana
needs. Flipkart
Amazon
Zoho Salesforce
Ichef/Holachef Blue Apron
Razorpay Stripe
Healthifyme MyFitnessPal
Lenskart Warby Parker
Naukri.com Monster
RedBus GotoBus
Zoomcar Sixt
CarDekho TrueCar
Grofers Instacart
Ikea Urban Ladder
Mswipe Squareup.com
Google Maps MapmyIndia
113
All these foreign companies were established way before their
Indian counterparts were being built. One cannot deny that India
has become a startup hub with a total of 49,000+ startups being
launched (as of September 2018), however, the reality is that the
number of these startups were formed out of ideas that originated
elsewhere.
Global Entrepreneurship Index 2018 Rankings

100
Indonesia
75
India
GEI Rank 2018
50
China
Japan
25
Israel Germany
United
Kingdom United
Canada
States
0
Country
The global startup economy has achieved great heights with a

total economic value of nearly $3 Tn in 2019, a 20% increase
from the prior two periods. This growth is largely driven by high-
tech startups in the fields of advanced manufacturing and
robotics, blockchain, agritech and new food, and artificial
intelligence. However, startups and investment in startups from
these sectors are yet to become prominent in India.
114
Transactional
Volume
One of the most celebrated emerging markets, India’s economic growth has proved
resilient in global slowdown events. However, in 2019, the Indian economy has
suffered from the point of GDP growth, consumer spending and NBFC crunch.
While the GDP expected to grow by 7.3% for the full fiscal year of 2018-19, reports
in the first week of 2020 suggest that India will miss this target. Ratings agency
Moody’s cut its forecast for India growth in FY20 to 4.9% owing to weak consumer
sentiment.
While the economic success in past years has been attributed to prudent fiscal
policy, the introduction of the goods and services tax (GST), socioeconomic factors
as well as less-than-stellar foreign investor sentiment have driven growth down.
With an estimated quarter of its population living below the poverty line, there
remains much work to be done.
China India US UK
Business to consumer ecommerce market value $1.2 Tn $1.2 Tn $744.1 Bn $232.05 Bn
Mobile commerce market value $873.2 Bn $873.2 Bn $282.8 Bn $118.3 Bn
Mobile commerce % of e-commerce market size 76% 76% 38% 51%
Bank account penetration 80.20% 80.20% 93% 96.40%
Card penetration per capita (Debit + Credit) 5.26 5.26 4.45 2.48
When it comes to digital penetration too, a lot needs to be

done. Online shopping or ecommerce — often considered
the Indian startup ecosystem’s flag bearer — only
represents 2.9% of total Indian retail sales. The average
annual per capita spend is also low at $338.24. This is
among the lowest spends per capita among countries
that India is compared to.
As banking penetration increases, bank transfers are

expected to rise quickly. Currently used for one in five
ecommerce transactions, this method is expected to
increase at a compound annual growth rate of 84% till
2021 to take a 30.2% share of the transaction market.
Currently, with just 0.66% card penetration per capita
(debit + credit cards) and 0.02% for credit cards India is

still a majorly cash transactional economy.
115
Trade Inflow Foreign direct investment in India
increased by $2,155 Mn in October
Outflow & FDI

2019. It reached an all time high of
$8,569 Mn in August of 2017 and a
record low of $1,336 Mn in November of
2017.
Trends
Foreign institutional investors (FIIs) have
been aggressive on Indian equities in
the first six months of 2019 despite
increased volatility and uncertainty
around the elections, and the economic
downturn since August.
FIIs bought net local equities worth

$11.41 Bn between January and June,
the most since the corresponding
period of 2014, when they had invested
forex worth $9.91 Bn. In the six months
ended December 2018, FIIs saw an
outflow of $3.78 Bn. The outflow in
January to June 2018 was $681 Mn.
Trade Inflow Outflow & FDI Trends

8000
7000
6000
4676
$ Mn
4000
3691
3673
3034
3008
2444
2000
2370
2155
1824
1704
0
Dec’18 Jan’19 Feb’19 Mar’19 Apr’19 May’19 Jun’19 Jul’19 Aug’19 Sep’19 Oct’19
Month
*Source: tradingeconomics.com, Reserve Bank of India
The inflows, however, did not start off on a strong note. FIIs sold net Indian equities worth $75.35
million in January. The pace of foreign money inflows started picking up from February and, over
the following five months, FIIs invested $11.5 Bn. In June alone, FIIs were net buyers of $231.45
Mn in equity.
Annual FDI inflows in the country are expected to rise to $75 Bn over the next five years, as per a
report by UBS. The government of India is aiming to achieve $100 Bn worth of FDI inflows in the
next two years.
116
Impact
Of Indian
Startup
Economy
An Analysis
117
Impact On
Jobs
According to the government of India, the Startup India initiative has helped create
an estimated 187K direct jobs since its inception in 2016 and the number of related
indirect jobs is currently at 560K. This job growth has come at a rough cost of more
than INR 2,500 Cr disbursed by the government to fund startups.
In 2016, the centre had established an INR 10K Cr fund of funds under the Small
Industries Development Bank of India (SIDBI) to meet the financial needs of the
startups.
Average Jobs Created By Startups In India

Figures In Lakh
6
6.11
5.65
4.90
4
4.6
4.49
4.52
4.37
4.50
0
Nov’18 Dec’18 Jan’19 Feb’19 Mar’19 Apr’19 May’19 Jun’19
Month
118
The major contributor to this job creation is the gig
economy.
Food delivery startup Swiggy said it employs around

210K delivery boys and intends to increase the
number to 500,000 in the next 18 months. Scores of
others such as Swiggy’s rival Zomato, on-demand
delivery service Dunzo and cab-hailing companies
Uber and Ola together employ millions of workers
who are not considered ‘traditional employees’ and
are paid per order or ride.
While the gig economy has been frowned upon by

corporates, startups have been the early adopters of
it, and now large corporates are driving the demand.
Job Profiles Created

In 2018-19, the job created by startups had plunged by 18%
45%
Professional Services
30%
27%
Large Corporates 22%
19%
Startups
37%
8%
Development Sector
9%
1%
Other Sectors
2%
0 10 20 30 40 50
2016-17 2018-19
*Source: EPFO
119
Emerging
Technologies
While not quite ready for deployment, 5G will soon enter

the Indian market, offering high-speed data transfers and Internet of Everything (IoE)
information processing in real-time to make machine-to-
Representing a more advanced stage of IoT (Internet
machine communication faster than ever before. It is
of Things), IoE includes people and processes as an
expected to redefine network and communication
important part of the whole system. IoE will enable
infrastructure as we know it. However, with such a huge
hyper-connectivity and vision of connected,
investment ($70 Bn) and infrastructure requirement,
collaborated, and intelligent systems powered by
uniform implementation of the technology across the
smart devices and data-driven management.
country will likely extend beyond 2021.
IoT, in its broadest conceptualisation, includes any
On the other hand, the world is moving towards being more
type of physical or virtual object or entity that can be
and more connected becoming a ‘smart’ ecosystem. This
made addressable and given the ability to transmit
comprises connected devices, communication channels,
data without human-to-machine input. Things are
and AI-driven data processing which has enabled the
often items that would not have been networked in the
newest opportunities.
past; with this, automation of communication is also
central to the IoT concept. The IoE, on the other hand,
As predicted last year, spacetech, internet of things (IoT),
includes user-generated communications and
3d printing and electric vehicle battery management
interactions associated with the global entirety of
technology has come a long way in 2019.
networked devices as well.
According to DataLabs By Inc42 analysis, here are the
technologies which will dominate the tech ecosystem in
2020:
Meaning to value and action
People
Connected
People to People Context Data
(P2M) Subject Sensing
Sending Data To
Analyzing Meaning
Process
Machine To
Data
People to machine Things Machine To

(P2M) Endpoints
Machine
IP Address
Objects
120
Artificial Intelligence-As-A-Service
(AIaaS)
Similar to SaaS, enterprises can leverage artificial

intelligence (AI) without investing much money to make
data-driven decisions. Major cloud providers have started
offering comprehensive AI stacks that can be used without
deploying any cognitive computing or machine learning
provisions.
In the past, companies needed a lot of resources and

capital, as well as time to build up infrastructure and
technical systems, know-how for AI applications.
Now, AIaaS has minimised the development and

deployment time. So, basically, startups and businesses
can get an AI application or model off-the-shelf as per their
needs. AIaaS enables everyone, regardless of how much
knowledge they possess, to take benefit of AI. For the
developers clean APIs are being provided, the users get
coding skills graphical user interfaces together with detailed
instructions in order to ensure data processing pipeline.
Few internet companies have already started providing

AIaaS. Amazon’s in-house expertise in predictive analytics
is available on Amazon Web Services by means of machine
learning services. Amazon is also coming up with open
source software DSSTNE - Deep Scalable Sparse Tensor
Network Engine.
Cryptocurrency
Drug Lifestyle Advice Patient

Patient
Maker Stratification
Omics
Data Diagnostics
CRO
AI
Rediogist
Laboratory
SOP’s MRI/Images
Validation
Clinical Decision
Researcher Support Physician
Predictive
Analystics
Unstructured
Data
121
Space-As-A-Service (SPaaS)
The common definition of space-as-a-service is the change

in the real estate model from asset ownership to
monetisation of access to the space and services. Yet,
space as a service is more than just about real estate. It is
a model that facilitates a change in management’s beliefs
about the design and function of real estate. This new
thinking proactively enhances productivity and experiences
within a company’s real estate portfolio.
Co-working, co-living, and now a retail concept called

“brandboxing” are all examples of the SPaaS business
model, in which landlords essentially provide a suite of
services that enable tenants to easily utilise the space. That
entails everything from digital connectivity to furniture,
fixtures and even the staffing required to operate their
businesses.
While WeWork, the largest lessee of commercial office

space in New York City, did not invent the idea of space-as-
a-service, its tremendous success has undoubtedly been
an impetus for changing the way the industry looks at the
tenant-landlord relationship. Indian companies such as
Data Security
Protecting digital data of users is the first thing enterprises will need to ensure. People become aware of their privacy concerns,
making enterprises to take serious action towards data security in 2020.
In August of 2017, the Supreme Court of India decided

that the “right to privacy is protected as an intrinsic
part” of the constitutional rights to life and personal
liberty. This paved the way to Personal Data Protection
Bill, 2018 (PDPB).
The PDPB is modeled after the GDPR (General Data

Protection Regulation), but there are significant
differences between the Indian legislation and European
law.
With clear legislation in place, Indian corporations are

taking the steps to implement privacy and data security
for their organisations. This has created a huge market
for data security services and products in India. India’s
cybersecurity market is expected to register an annual
growth of 15.6 per cent and rise to $3.05 Bn (about INR
21,600 Cr) by 2022 from $1.97 Bn (about INR 14,000
Cr) in 2019.
122
Microservices & Cloud
Cloud has reshaped entire infrastructure and will While much of the discussion about microservices has
continue to do so. The usage of the cloud continues to revolved around architectural definitions and
reach greater heights because of flexibility, cost- characteristics, their value can be more commonly
effectiveness, and scalability it does offer. 2020 will see understood through fairly simple business and
more microservices architecture that makes it easier to organisational benefits:
develop complex systems faster and with great
efficiency.
Code can be updated more easily.
Microservices (or microservices architecture) are a
cloud native architectural approach in which a single Teams can use different stacks for different
application is composed of many loosely coupled and components.
independently deployable smaller components, or
services. These services typically: Components can be scaled independently of one
another, reducing the waste and cost associated with
having to scale entire applications because a single
Have their own stack, inclusive of the database and feature might be facing too much load.
data model
Communicate with one another over a combination

of REST APIs (Representational State Transfer), event
streaming, and message brokers
Are organised by business capability, with the line

separating services often referred to as a bounded
context.
Microservices
Identity Services
Provider
Services Remote
Service
API
Gateway
Services
Client
Services
Static Service
CDN Content Management Discovery
123
The Government
Intervention &
Policies
Angel Tax Abrogation
Much of the criticism directed to finance minister “To mitigate the genuine difficulty of startups and
Nirmala Sitharaman is largely due to her their investors. It has been decided that Section
predecessors’ moves. To her credit, though, are the 56(ii)(viib) shall not be applicable to DIPP registered
abrogation of angel tax and recent GST reforms. startup.” - N Sitharaman
Along with angel tax, the I-T orders and notices The government has constituted a dedicated cell
which have haunted startup founders in the past under a member of CBDT for addressing the
badly. Dozens of startup founders confirmed that problems of startups. The Central Board of Direct
harassment by I-T AOs was one of the main reasons Taxes has so far exempted 1,658 startups (
that led them to shut down their offices. November, 2019) under Section 56 (2) (vii) of the
Income Tax Act, 1961. “All notices will be disposed
While the late Arun Jaitley who was the former of within three months from the date of reply. No
finance minister showed little interest towards tax assessee will have do anything after three months
complaints, it took a long time to the former once he has given the reply,” Nirmala Sitharaman
commerce minister Suresh Prabhu to minimise the had averred in August, this year.
tax harassments of startups under Section 56(2)(viib)
of the I-T Act, Sitharaman in her short span as A startup has to file a duly signed declaration in
finance minister has responded rather quickly with Form 2 to DPIIT {as per notification G.S.R. 127 (E)}
initial reforms. to claim the exemption from the provisions of
Section 56(2)(viib) of the Income Tax Act.
The DPIIT-recognized startups are now exempt from
tax under Section 56(2)(viib) of the Income Tax Act Introducing Section 54EE in the Income Tax Act,
when such a startup receives any consideration for 1961, exemption from tax has also been made on
issue of shares which exceeds the Fair Market Value long-term capital gain (For up to INR 50 Lakhs) if
of such shares. such long-term capital gain is invested in a fund
notified by central Government. The condition of
minimum holding of 50% of the share capital or
voting rights in startup is relaxed to 25%.
Measures to Boost Economy

Taxation Measures
Relief form enhanced surcharge on In order to encourage investment in the capital market, it has been
Long-term /Short-term Capital Gains decide to withdraw the enhanced surcharge levied by Finance
(No.2) Act, 2019 on Long/Short term capital gains arising transfer
of equity shares/units referred section 111A and 112 A respectively.
Withdrawal of Angel Tax provisions To mitigate genuine difficulries of startups and their investors, it
for Startups and their investors has been decide that section 56(2)(Viib) of the Income-tax Act shall
not be applicable to startup registered with DPIIT.
It has also been decided to set up a dedicated cell under member

of CBDT for addressing the problems of startups. A startup having
any income-tax issue can approach the cell for quick resolution of
the same.
124
GST Reforms
Filing GST forms and getting refunds have been

tedious since the goods and services tax (GST) was
announced on July 1, 2017. Despite hundreds of
reforms carried out over the last two years, GST
continues to haunt MSMEs and startups.
Measures to Boost Economy

Banks/NBFCs/MSMEs
GST Refund to MSME within 30 days All pending GST refund due to MSMEs shall be paid within30 days.
In future all GST refunds shall be paid within 60 days from the date
of application.
MSME Bill Discounting TReDSto use GSTN system in medium term to enhance market for
bill discounting for MSMEs.
MSME Defination Amendment to MSME act to move towards single defination to be

considerd.
UK Sinha Committee Decisions to Recommendations such as on ease of credit,

Recommendations Marketing, Technology, delayed payments etc. within 30 days.
Besides GST, startups have also had to deal with the less number of forms. The refund process I must
angel tax terror, which resulted in a steep decline in underline has almost become automatic. The refund
seed stage funding in the Indian startup ecosystem. should be going through a process of free flow. Even
DataLabs by Inc42 data shows that the total capital this Sunday, I am holding a meeting with GSTN
inflow into Indian startups between 2014 till the first people to make sure to identify where the glitches
half of 2019 was more than $51 Bn across 4,554 are, in terms of the flow of refunds. So, it does not
deals which are growing YoY. affect people.”
However, the number of startups funded at the seed “To mitigate the genuine difficulty of startups and
stage plunged by 39.74% to 329 in 2018, when their investors. It has been decided that Section
compared to the pre angel tax era of 2017, where 56(ii)(viib) shall not be applicable to DIPP registered
around 546 seed stage startups were fundGST startup.” - N Sitharaman
registration if his turnover from supply of goods or
services. And 2019 was no different than last year. The government has constituted a dedicated cell
The count of startups funded at seed stage in H1- under a member of CBDT for addressing the
2019 was 38.92% lower than the half-yearly average problems of startups. The Central Board of Direct
of 219 from 2014-2018. Taxes has so far exempted 1,658 startups (
November, 2019) under Section 56 (2) (vii) of the
The minimum turnover from supply of goods GST Income Tax Act, 1961. “All notices will be disposed
registration limit has been doubled from previously of within three months from the date of reply. No
INR 20 Lakhs to INR 40 Lakhs. Further, barring assessee will have do anything after three months
North-east states, the threshold limit on gross once he has given the reply,” Nirmala Sitharaman
turnover in previous financial year to avail of the had averred in August, this year.
composition scheme were increased from INR 1 Cr
to INR 1. 5 Cr. A startup has to file a duly signed declaration in
Form 2 to DPIIT {as per notification G.S.R. 127 (E)}
In a big relief to the EV sector, the GST rate on to claim the exemption from the provisions of
electric vehicles was reduced from 12% to 5% and Section 56(2)(viib) of the Income Tax Act
GST on chargers for e-vehicles was reduced to 12% Introducing Section 54EE in the Income Tax Act,
from 18%. Further, those buying electric vehicles 1961, exemption from tax has also been made on
have been given additional income tax deduction of long-term capital gain (For up to INR 50 Lakhs) if
INR 1.5 lakh on the interest paid on loans taken to such long-term capital gain is invested in a fund
buy EVs. notified by central Government. The condition of
minimum holding of 50% of the share capital or
Addressing the GST forms issues, Nirmala voting rights in startup is relaxed to 25%.
Sitharaman stated, “The number of forms is really
being worked upon. I surely assure you that sooner
the GST will come up with even more simplified with
125
Fund Of Funds Disbursal
The Government of India in June 2016 had set up a

Fund of Funds for Startups (FFS) wirth a corpus of INR
10K Cr to provide a much needed boost to the Indian
startup ecosystem and enable access to domestic
capital.
On Fund of Funds disbursal, commerce ministry has

notified the Parliament that as on 21st November, 2019,
SIDBI has committed INR 3123.20 Cr. to 47 SEBI
registered Alternative Investment Funds (AIFs). These
funds have raised a corpus fund of INR 25,728 Cr. INR
695.94 Cr has been drawn from the Fund of Funds for
startups. And, a total of INR 2,669.83 Cr has been
invested into 279 startups.
The ministry informed that 2,85,890 jobs are reportedly

created by 23,657 DPIIT recognized startups, as on 4th
December 2019.
Personal Data Protection Bill
After a long hullabaloo on data privacy, the critical personal data which will be
Indian government has finally introduced essentially processed in India only.
Personal Data Protection Bill in the Lok Sensitive personal data which could be
Sabha, Lower House of the Parliament. The health related data, sex life etc can be
Bill is now being sent to a Joint Parliamentary transferred outside India but such
Committee for further examination sensitive personal data shall continue to
bypassing the traditional route of sending be stored in India.
such Bills to Standing Committee, as the
Committee which is currently headed by a The burden of proof will be on fiduciaries
Congress MP Shashi Tharoor. that they have the consent of data
principals.
However, the Bill tabled in the Lower House
has made some changes in the original draft Interestingly, the Bill introduced in the
prepared by Justice BN Srikrishna Parliament has omitted ‘passwords’ from
Committee. A chapter reduced, the new the data listed/recognised as sensitive
draft bill has dedicated one whole chapter personal data. The Srikrishna Committee
to how personal data could be used without had recognised passwords at the top of
consent. The controversial Bill has raised the sensitive data list.
several questions.
The Bill treats personal data as a matter Will Data Protection Authority which has
of trust and not as property as defined in been tasked to regulate the Bill have the
GDPR. capability to effectively implement the law, is
also a matter of concern for many.
The Bill digresses from data protection
by design and default, as established in Justice Srikrishna is not apparently happy
GDPR. with the Bill. He said, “They have removed
the safeguards. That is most dangerous. The
Despite the fact the governments as well government can at any time access private
as public authorities, except the data or government agency data on grounds
proposed Data Protection Authority of of sovereignty or public order. This has
India, are the biggest data fiduciaries, dangerous implications.”
under Section 35 of the Bill, ‘reasonable’
exemptions have been given to the state Meanwhile, the government has also
and authorities. Recently, we saw how constituted a Committee of Experts headed
‘reasonable classification’ of Article 14 by Infosys cofounder Kris Gopalakrishnan
of the Indian Constitution were used to on non-personal data uses.

amend the Citizenship Act which has
created ruckus in North-east states.
Section 35 of the PDP Bill, 2019 allows
government authorities power to
exercise surveillance against any citizen.
The Bill lets the government define
126
Banning Cryptocurrency National Policy On Electronics
The Inter-Ministerial Committee led by Subhash In February this year, the cabinet gave nod to the
Chandra Garg, former secretary, Department of National Policy on Electronics 2019 which has made
Economic Affairs (DEA) had submitted its report, earlier some cosmetic changes into National Policy on
this year. The report recommended a complete ban on Electronics 2012.
cryptocurrency in India.
Extending the deadline of the NPE 2012 which aimed
The IMC had also submitted a draft Bill named Banning for a turnover of $400 Bn in domestic electronics
of Cryptocurrency & Regulation of Official Digital manufacturing by involving a 100 Bn investment in
Currency Bill 2019 to the finance ministry. The Electronic System Design & Manufacturing (ESDM) and
committee was however agnostic about exploring the creating employment for 28 Mn people by 2020, the
idea of RBI-backed digital currencies and has welcomed new NPE 2018 aims to achieve a turnover of $400 Bn by
the ongoing innovations happening around the 2025. This will include targeted production of 1.0 Bn
underlying technology, known as blockchain. mobile handsets by 2025, valued at $190 Bn, including
600 Mn mobile handsets valued at $110 Bn for export.
The Bill has not been introduced in the Parliament and Interestingly, while the draft does mention that 4.5 Lakh
hence has given a fresh air to the crypto exchanges and direct and indirect employment created in the last three
startups. However, due to the RBI notice which has years by 118 mobile manufacturing units, the NPE 2018
banned banks from offering any services to crypto does not set any objectives, as far employment and
entities, dozens of crypto startups have already shut investments are concerned.
their shop since last year.
Aimed to encourage industry-led R&D and Innovation in
all sub-sectors of electronics, the draft NPE 2018 plans
to create a comprehensive startup ecosystem in
State Policies emerging technology areas such as 5G, IoT, artificial
intelligence (AI), machine learning, etc, and their
applications in areas such as defence, agriculture,
health, smart cities and automation, with a special focus
This year, the Indian government also released the on solving real-life problems.
National Policy on Software Products-2019 with a vision
to create a robust Indian software product development The draft NPE 2018 skips the NPE 2012 objectives that
ecosystem, thereby enabling IP driven holistic growth of aimed to achieve a turnover of $55 Bn in very large
the IT Industry. scale integration (VLSI), embedded chip design and
embedded software industry by 2020. The draft NPE
With the policy the government aimed to promote tech 2018 also skips the 2012 objective of building a strong
entrepreneurship in India and help make Indian software supply chain of raw materials, parts, and electronic
product startups to scale to become $70-80 Bn market components to raise the indigenous availability of these
by 2025. MeitY also set up a MeitY Startup Hub as the inputs from the-then 20-25% to 60% by 2020.
coordination, facilitation and monitoring centre that will
integrate all the incubation centres, startups and There is no update on the ESDM sector exports. The
innovation related activities of MeitY. NPE 2012 aimed to increase exports from the-then $5.5
Bn to $60 Bn by 2020.
MeitY has also been mulling to create a Software
Product Council which will work on implementing a The draft NPE 2018 promises a lot and has laid out its
software product mission. The council will include strategies to achieve its ambitious vision, mission, and
members of the government, academia and industry. objectives. However, it doesn’t seem to have identified
the loopholes in the NPE 2012 strategies or come up
As part of the policy, the government will initially outlay with a robust strategy of its own. Merely skipping the
INR 1,500 Cr to implement the programmes for software key objectives of NPE 2012 which also aimed the Indian
development and research, for over a period of seven electronics industry to be the global hub by 2020
years. specifying certain targets, won’t help.
Prohibition of Electronic Cigarettes

The Prohibition of Electronic Cigarettes (Production, According to the law, the owners of existing stocks of
Manufacturing, Import, Export, Transport, Sale, e-cigarettes will have to declare and deposit these
Distribution, Storage, and Advertisement) Act, 2019 stocks at the nearest office of an authorised officer.
prohibits the production, trade, storage, and Such an authorised officer may be a police officer (at
advertisement of electronic cigarettes. least at the level of a sub-inspector), or any other officer
as notified by the central or state government.
According to the law, any person who contravenes this
provision will be punishable with imprisonment of up to

one year, or a fine of up to INR 100K, or both. If repeated
the offence, the person will be punishable with
imprisonment of up to three years, along with a fine of
up to INR 500K.
127
State Policies Policies That Failed To Get The
Cabinet Nod
On a smaller scale, yet many of the states took a slew of
steps that helped shape the startup ecosystem in the
Among the policies and guidelines which were expected
state. Meghalaya approved the Meghalaya Startup
to come into effect in 2019 but have failed to get the
Policy 2018 which aims to help budding entrepreneurs
cabinet nod are ecommerce policy, Drone Regulations
and create employment opportunities.
2.0 and Intermediary Guidelines under the Information
Technology Act, 2000.
As part of the policy, the state government will develop
a startup portal and app which will aggregate all
Amid big ongoing war between local vendors and US
information related to the policy, its benefits and the
giants Amazon and Flipkart, the government is now
procedure to avail them. The government has also
expected to come into effect early next year. Having
proposed to develop quality infrastructure across the
released the draft earlier this year, the government will
state with all necessary facilities made available for
reportedly also include the recommendations to be
entrepreneurs. Approved institutions will be eligible for
made by Kris Gopalakrishnan committee.
a one-time grant of 75% of capital cost (cost of building,
equipment, connectivity etc.) up to a maximum of INR 5
The draft Information Technology (Intermediary
Cr to set up an incubator.
Guidelines (Amendment) Rules) 2018 was released in
December 2018. However, upon receiving wide criticism
The Nagaland government too had issued a notification
as well as humongous feedback on the draft, the fresh
pertaining to Nagaland Startup Policy 2019. The policy
Guidelines is now expected to be released in January,
aims to create a conducive atmosphere and opportunity
2020.
for local entrepreneurs.
Drone Regulations 2.0 was supposed to be released in
Issued by the Department of Industries and Commerce,
March, this year. The DGCA however, has failed to build
the Nagaland Startup Policy 2019, like most of the other
the platform -- Digital Sky -- essential for the drone
state startup policies shall be effective for a period of
operations. The Digital Sky has been running in beta
five years since the date of notification.
form for the last one year and is limited to very basic
tasks such as registration.
While Karnataka has released a new state IT policy,
Madhya Pradesh has launched a new scheme for small
There is no update from the DGCA on when Drone
businesses that focuses on attracting investment and
Regulations 2.0 will now be released.
encouraging job creation among MSMEs in the state.
According to reports, under the scheme Madhya
Looking at the importance of AI, the MeitY had also
Pradesh MSME Protsahan Yojana, 2019, the government
constituted four Committees on AI:
would provide 40% grant for setting up businesses in
the state along with a provision of acquiring cheap land
by providing 70% of employment to locals and Committee on platforms and data on AI led by PP
representation of STs, SCs, and OBCs. Chakraborty, IIT Kharagpur
Maharashtra set up Mumbai FIntech Hub to bridge the Committee on Leveraging AI for identifying National
gap between investors and fintech startups in the Missions in Key Sectors, led by Rajeev Sangal, IIT
country with respect to funding. For the same, it has BHU
already onboarded 50+ marquee investors including
venture capital firms, family offices, and international Committee on mapping technological capabilities,
investors including Blume Ventures, Indian Angels led by R Chandrasekhar, NASSCOM,
Network, SAIF partners, Kae Capital and others to help Committee on cybersecurity, safety, legal and ethical
startups make direct connections with the investor issues, led by Rajat Moona, IIT Bhilai
community.
Kerala, Karnataka, Maharashtra and a few other states All the four committees have submitted their reports to
continued to make a number of international the ministry. If implemented, this opens a huge market
collaborations to promote startups, investments and for Indian startups who are leading the AI game in the
innovation in the state. Indian market.
128
Major Initiatives And Implementation
Timeline
January June
Assam launches a state-backed Incubation Centre as RBI removes NEFT, RTGS charges to boost digital
part of its state policy payments
Tamil Nadu launches Startup Policy, creates a fund of Meghalaya launches Startup Policy, to develop 500
funds with a corpus of INR 250 Cr startups in 5 years
SEBI releases startup listing guidelines
September
February Central Board of Direct Taxes (CBDT), issues a circular
asking income tax officers to handle startup-related
Commerce Ministry amended FDI rules In Ecommerce: issues with “utmost care”
no more vendor exclusivity, US-India Strategic
Partnership Forum (USISPF) calls it regressive Karnataka announces a Vision Group for startups to
provide insights on strengthening the startup ecosystem
Govt announces National AI Programme in the state
Digital Village Mission announced - To create 1 lakh Tamil Nadu launches its own EV policy, 100% motor
digital villages vehicle tax exemption to EVs
National Policy on Software products gets cabinet node
National Policy on Electronics gets cabinet nod

October
Nagaland Startup Policy launched
DPIIT launches L2Pro India, an IP online learning
platform to educate startups, MSMEs and innovators on
March
protection and enforcement of their IPs
Madhya Pradesh MSME Protsahan Yojana, 2019,

launched, provides 40% grant for setting up businesses
Aadhaar and Other Laws (Amendment) Ordinance gets in the state
President Kovind’s approval
April November
DPIIT announces National Startup Awards 2020
Garg Committee proposes ban on cryptocurrencies,
submits draft Banning of Cryptocurrency & Regulation
Defence ministry proposes INR 500 Cr for defence
of Official Digital Currency Bill 2019
startups
May
Rajasthan releases draft startup and innovation policy
SEBI proposes framework for accreditation of startup

investors December
Telangana releases draft blockchain policy
Prohibition of Electronic Cigarettes (Production,
DPIIT prposes to formulate National Retail Policy Manufacture, Import, Export, Transport, Sale,
Distribution, Storage and Advertisement) Bill, 2019
enacted
PDP Bill introduced in lower house
129
Growth In Per-
Capita Income
& Diaspora
The country’s per-capita income is estimated to have risen by 10% to INR 10,534 a month during the
financial year ended March 2019, government data on national income showed Friday.
In 2017-18, the monthly per-capita income had stood at INR 9,580.
Net National Per Capita Income

Per capita income doubled in seven years from ₹63.5K to ₹1.25 lakh
13
11.9
11.1
11.5
Annual Growth (%)
9.6
9.5 9.3
8.6
6
2013 2014 2015 2016 2017 2018 2019
Year
The per-capita income is a crude indicator of the of the fiscal year ended March 2018-19, mainly due to
prosperity of a country. poor show in the farm and manufacturing sectors.
The gross national income (GNI) at current prices is The growth in gross domestic product (GDP) was
estimated at INR 188.17 lakh crore during 2018-19, as slowest since 2014-15. The previous low was 6.4% in
compared to INR 169.10 lakh crore during 2017-18, 2013-14.
rising by 11.3%.
For full year 2018-19, the economic growth is estimated
India’s gross domestic product is estimated to have at 6.8%, compared to 7.2 % in the previous year.
slowed to a five-year low of 5.8 per cent in the last quarter
130
Gender
Analysis
The low rates of women entrepreneurship are reflected in a dismal score in the Index of Women
Entrepreneurs, where India is ranked 52nd out of the 57 surveyed countries. The fact that few women
own companies is part of a larger phenomenon of weak engagement of women in business. This
further relates to a low female labor force participation rate as well as women having fewer opportunities
to become business leaders, professionals and technical workers.
Indeed, despite high economic growth rates as well as an increase in the proportion of working-age
women in the population, the participation in the workforce has decreased from 35 percent in 2005 to
just 26% in 2018.
It is hardly a surprise, therefore, that the World Economic Forum’s Gender Gap Report finds India’s
gender gap to be particularly prevalent in the indicator group “economic participation and opportunity,”
where the country is ranked 142nd out of 149 countries. India’s overall rank is 108th.
Unequal education is an issue holding women back, and it is not a coincidence that states with relatively
higher literacy rates also have more women entrepreneurs. The top five states with the highest
percentage of women entrepreneurs are Tamil Nadu, Kerala, Andhra Pradesh, West Bengal, and
Maharashtra.
Gender Bias In Funded Startups Of 2019
9% share of
female in founders of
91% share of
male in founders of
funded startups in 2019 funded startups in 2019
131
Funds Launched
in 2019
AngelList VC Fund Undisclosed April Sector Agnostic AngelList-India focused fund
F irm N a me
F und Typ e
F und S ize ( I n Mn, U S D)
La unch Mo nth
F o cus S ecto rs
F und N a me
Sequoia Capital India VC Fund Undisclosed July Fintech, Technology, Sequoia Capital India Seed
Ecommerce, Fund I
Consumer Services
Fluid Ventures Corporate Undisclosed November Sector Agnostic Fluid Ventures Fund I
Nabard VC Fund $99.6 Mn May Agritech/Agriculture NABARD-Venture Capital

Fund I
Omnivore Corporate $97 Mn April Fintech Omnivore Partners India Fund

II
Pioneering Ventures VC Fund $70 Mn June Foodtech Rural Impact India Fund
MTR Foods Corporate $7 Mn May Ecommerce, Consumer Seed Fund

Services
Indian Angel Network VC Fund $63 Mn September Healthtech Indian Angel Network VC Fund
India Quotient 3
India Quotient Corporate $60 Mn November Fintech 3one4 Capital Rising I
3one4 Capital VC Fund $6.5 Mn December Artificial Intelligence,

Consumer, EdTech, Enter-
prise, Enterprise Software,
FinTech,
Information Technology,
Internet, Internet of Things,
SaaS
Unicorn India Ventures VC Fund $58.3 Mn July SaaS, fintech, healthtech, Unicorn Venture Fund III
robotics, gaming and digital
content
Multiples Alternate Corporate $560 Mn November Consumer Goods, Multiples Private Equity
Asset Management Healthtech, Enterprise Tech Fund III
Accel India VC Fund $550 Mn October Consumer Services, Enter- Accel India VI Fund
prise Tech
Apis Partners VC Fund $550 Mn November Technology Apis Growth Fund II
Indian Angel Network VC Fund $53 Mn November Deeptech Indian Angel Network Maiden
Fund
Inventus Capital Partners VC Fund $51 Mn October Sector Agnostic Inventus-III
*Launched
*To be launched
132
3one4 Capital VC Fund $50 Mn February Consumer Internet, EdTech, Continuum I 3one4 Capital
F ir m N a me
F und Ty p e
F und S ize ( I n M n, U S D)
La unch M o nth
F o cus S ecto r s
F und N a me
FinTech, Enterprise Tech,
Deeptech
Frontline Strategy VC Fund $50 Mn September Sector Agnostic Strategic Ventures Fund II
Strategic Ventures Fund II VC Fund $50 Mn September Technology SVFII
AET Fund VC Fund $50 Mn April Media and Entertainment Proprietary Capital Fund
SoftBank VC Fund $5 Bn March SoftBank Innovation Fund SoftBank Innovation Fund
Venture Catalysts Corporate $43.41 Mn August Fintech 9Unicorns Fund
AdvantEdge Corporate $42 Mn January Fintech, Enterprise Tech AdvantEdge Founders Fund-II
Endiya Partners Corporate $40 Mn May Traveltech, Logistics Endiya Partners Fund II
India Quotient VC Fund $40 Mn November Enterprise tech, Deeptech India Quotient opportunities
Fintech, fund
Social Networking
Warburg Pincus VC Fund $4.3 Bn June Consumer Services, Warburg Pincus China-South-
Healthtech, Real Estate, east Asia II
Fintech, Media and
Entertainment
A91 Partners Corporate $350 Mn May Consumer Internet, A91 Partners- Fund I
Healthtech, Fintech
021 Capital VC Fund $32 Mn January NA 021 Capital Fund I
Matrix partners India VC Fund $300 Mn January Consumer Internet, Matrix Partners India Fund III
Ecommerce, Healthtech,
Fintech, Edtech,Logistics,
Media and Entertainment
Avataar Capital Corporate $300 Mn September Enterprise tech, Deeptech Avataar Venture Partners I
Management
DSG Consumer Partners Corporate $30 Mn April Consumer Internet DSG Consumer Partners III
Windrose Capital VC Fund $30 Mn November Healthtech, Logistics Windrose Capital Fund I
ZNL Ventures VC Fund $3 Mn November Deeptech ZNL Ventures Fund I
Artha Venture VC Fund $29 Mn June Fintech, Technology Artha Venture Fund I
*Launched
*To be launched
133
Varanium Capital Corporate $28 Mn November Consumer Goods, Norwest Venture Partners XV
F ir m N a me
F und Ty p e
F und S ize ( I n M n, U S D)
La unch M o nth
F o cus S ecto r s
F und N a me
Consumer Internet,
Telecomunication,
Procter & Gamble India VC Fund $27.9 Mn Edtech, Fintech
Accion Venture Lab Corporate $23 Mn September Sector Agnostic India-focused fund IV
April Fintech Accion Venture Lab - Seed

Tamil Nadu Govt Corporate $21 Mn Fund
InnoVen Capital VC Fund $200 Mn July Fintech Alteria Capital India Fund I
Chiratae Ventures VC Fund $20 Mn February Technology Alfa Ventures Capital fund
Norwest Venture Partners VC Fund $2 Bn December Sector Agnostic Stride Ventures Fund I
May Ecommerce, Consumer STRIVE III Investment Limited

Internet Partnership Fund
Chiratae Ventures VC Fund $150 Mn September Ecommerce, Media Good Capital Fund I
Accion Venture Lab VC Fund $15 Mn July Fintech, Enterprise Tech SoftBank Vision Fund II
August FinTech Fireside Ventures Maiden

Alteria Capital VC Fund $140 Mn Fund II
Dhianu Das VC Fund $14.06 Mn March Fintech Anthill Ventures Fund
Stride Ventures Corporate $14 Mn January Real Estate Meenakshi Multiples
GREE Ventures VC Fund $130 Mn July Gaming Fund I
Good Capital Corporate $12 Mn October Fintech Varanium NexGen Fund
SoftBank VC Fund $108 Bn November Renewable sources Environmental Sustainability

Fund
Fireside Ventures VC Fund $100 Mn September Fintech Accion Venture Lab LP
Anthill Ventures VC Fund $100 Mn January Enterprise tech, deeptech Tamil Nadu Startup Fund of
Funds
Meenakshi Group Corporate $10 Mn May Fintech Debut Fund
Winzo Corporate $1.5 Mn September Sector Agnostic Chiratae’s Fund IV © Inc42 Media | not for distribution
*Launched
*To be launched
134
Roadblocks
For Indian
Startup
Ecosystem
According to the government of India, the Startup India initiative has helped create
an estimated 187K direct jobs since its inception in 2016 and the number of related
indirect jobs is currently at 560K. This job growth has come at a rough cost of more
than INR 2,500 Cr disbursed by the government to fund startups.
In 2016, the centre had established an INR 10K Cr fund of funds under the Small
Industries Development Bank of India (SIDBI) to meet the financial needs of the
startups.
Skewed development of startup ecosystem
Fading investor confidence towards early stage startups
Policy myopia of the government
Skewed
Development Of
The Startup
Ecosystem In
India
In most socio-economic cases like infrastructure, electricity the count of total unique investors who participated in startup
etc, the dominance of top metro cities is quite evident. In funding beyond the top three startup hubs (Bengaluru, Delhi
the case of the startup ecosystem, Bengaluru, Delhi NCR NCR and Mumbai) for the year 2019 was 211 compared to
and Mumbai have had an upper hand since the beginning the top three hubs’ 681.
of the startup era compared to the rest of the startup hubs.
The share of these three cities to the total capital inflow into
Indian startups between the interval of 2014 to 2019 was
89% or $52 Bn out of $58 Bn. In addition to this, the
availability of venture capital in Bengaluru, Delhi NCR and
Mumbai is also relatively higher than others. For instance
135
Investor Participation In 2019 Highly Skewed
Towards The Top Three Startup Hubs
In 2019, only 211 out 892 unique investors partcipated in funding rounds of startups
beyond Bengaluru, Delhi NCR and Mumbai
Others
23.7%
76.3%
Bengaluru, Delhi NCR and Mumbai
Implications: Disparity in development between two hubs in any economy is toxic in the long term, in
the case of Indian startup ecosystem the scenario is no different. In India, the startups has always been
the beacon of tech adoption, if the development of startup ecosystem only remains limited to the top
three hubs, so would be the adoption of new age technology.
As a result the development of the overall consumer internet market in the country would be limited
only to a handful of cities.
Fading Investor
Confidence
Towards Early
Stage Startups
Since 2017, there is a downward trend in the number of Also, with the growing syndication opportunities the
unique startups funded at seed stage in contrast to late and participation in funding rounds of late stage for any investor
growth. The primary reason behind the fading confidence with a decent ticket size has become relatively easier
of Indian investors towards seed stage ventures or new compared to earlier. Henceforth, the investor attention
ventures is the high failure rates of startups due to lack of towards new venture opportunity is fading with the passing
sustainability on the business front. of time.
136
Seed Funding Dwindles
For seed stage startup funding plunged by 44% between 2018-2019
13%
12%
Funding Amount CAGR (2015-2019)
10%
8%
6%
5%
3%
1%
0%
Growth Stage Late Stage Seed Stage
Funding Stage
Late Stage Funding Shoots Up

While seed and growth record negative CAGR, late stage funding showed
11% CAGR between 2015-2019
15%
Startups Funded CAGR (2015-2019)
10%
11
5%
3%
19%
0%
-1 -6%
-17%
-5%
-10%
-15
-15%
Funding Stage
137
Implications: The seed stage ecosystem is the foundation of the overall, so a revival of
seed stage funding in H1 2020 would have a big positive impact and be a shot in the arm
for the overall startup ecosystem. At the same time, a further delay in this context can
impact the overall spirit of entrepreneurship in the country, pushing back the Indian startup
ecosystem’s progress.
Policy Myopia Of
The Indian
Government
In the context of mapping policy which would act as an catalyst for new age industries
the Indian government has always been a late bloomer. Few known cases to justify this
statement is the impact of fiasco created due to governments short sightedness in
emerging segments such a cryptocurrency or the draconian Angel tax (policy uncertainty
of a long period), epharmacy (disagreement among various states) and many more.
The degree of short sightedness which the Indian government has in these matters
always end up hampering both the investor confidence and business development /
further growth of the market.
Angel Tax Had Hit The Seed Funding Worst

The growth of angel tax cases in early 2018, had an immediate impact on
seed funding. The funding at this stage started to dwindle in H1 2018 itself
with the deal count being 30% less than H2, 2017
400
300
Seed Stage Deal Count
200
100
0
H1-2017 H2-2017 H1-2018 H2-2018 H1-2019 H2-2019
Halves
Implications: While finalising an investment, the policy framework governing the market plays a crucial
role. If the policy changes by the government towards startups related sectors continue to be such then
growth of the startup ecosystem will be hampered drastically in the long run, primarily due to decreased
investor participation towards the specific segment/sector of the ecosystem.
138
Indian
Startup
Funding
Predictions
2020 & 2021
139
According to DataLabs by Inc42 estimates, by the Looking at the average annual growth of funding
end of 2020 the total value of funding amount is not amount from 2014 to 2016 and from 2017 to 2019,
going to be very different from 2019. At the end of we can see the growth and subsequent stabilisation.
2020, the funding amount is expected to be Between 2014 and 2016, the average annual growth
approximately $12.6 Bn across 778 deals, taking the in the capital inflow was 18%, whereas in the second
total funding raised by Indian startups between 2014 period, the growth rate was approximately -1%.
and 2020 to over $71 Bn. In terms of startups
funded, the total count of deals for the six-year We categorise the pre-2017 period as the growth
period will reach 5,789 in 2020. stage of the Indian startup ecosystem’s life cycle,
whereas the post-2017 era can be called the
In the Indian Tech Startup Funding Report in Q3 transition period between growth and maturity. As
2018, DataLabs by Inc42 had predicted that the the Indian startup ecosystem heads towards
funding amount in Indian startups would hit the $12 maturity, capital inflow is poised to stabilise along
Bn mark with 748 deals for the calendar year of with the frequency of deal count.
2019. With a total capital inflow of $12.7 Bn across
766 deals, the startup ecosystem growth in India In 2020, we expect the total capital inflow in Indian
was more or less along these predicted lines. And startups to remain in the range of $12 Bn to $13 Bn
the growth for 2020 will be incremental, at best as as witnessed in 2019. Similarly, the count of funding
per our projections. deals is estimated to be in the range of 750 to 800.
There are multiple factors at play which are enabling
This trend of evolutionary growth has been playing the transition of the Indian startup ecosystem.
out since 2017, the year when the funding amount in Among the primary ones are investors getting picky
Indian startups reached its historical peak of $13 Bn. about early-stage deals, prioritisation of unit
Since then, the capital inflow in Indian startups has economics and business sustainability over
remained more or less stable. addressable market opportunity and cashburn to
acquire users, and the rising popularity of syndication
in investments due to growing risk of startup failures.
YoY Trends: Estimated Funding Amount And

Deal Count By 2021
Funding amount is estimated to reach $17 Bn across 799 deals by 2021
$20 Bn 1250
1000
$15 Bn
Funding Amount
750
Deal Count
$10 Bn
500
$5 Bn
250
$0 Bn 0
2014 2015 2016 2017 2018 2019 2020 2021
Year
140
Seed Funding
Amount Set To
Rise In 2020
While we do not expect the state of seed stage
investments to improve drastically in terms of unique
startups funded or overall deal count by 2020 end,
seed funding amount will bounce back.
Seed Stage Funding To Show Recovery In 2020

According to projections, seed funding amount will grow by a whopping
41% in 2020
$50 Mn 800
$40 Mn
600
Startups Funded And Deals

Funding Amount
$30 Mn
400
$20 Mn
200
$10 Mn
$0 Mn 0
2014 2015 2016 2017 2018 2019 2020
Year
Funding Amount Deal Count Unique Startups Funded
Deal count and count of unique startups funded will continue to diminish at a rate of -13% (2015-2020).
On the bright side, the value of funding amount is expected to witness an uptick of 41% ($35.6 Mn)
compared to the $25 Mn mark reached in 2019.
The growth in value of funding amount in seed stage investments will primarily come from the overall
ticket size of investment increasing with time. The median funding amount of startup investments for
the year 2019 was $4 Mn which is a 3.4x surge compared to $1.16 Mn in 2015. Similarly, the median
funding amount in seed stage surged 2x from $359K in 2015 to $764K in 2019.
141
Healthtech
Startups In For
A Bounty
In terms of emerging sectors, in our 2018 report, we had expected the rise of IoT, blockchain, cybersecurity
as well as space tech. The latter, in particular, has grown in stature — even if not in funding amount —
thanks to the launch of India’s Chandrayaan-2 mission and the buzz around the Indian space sector.
For 2020, DataLabs by Inc42, expects healthtech and fintech startups to shine in terms of deal count and
funding. Finance and healthcare are two of the most significant aspects of the Indian economy. The fact
that startups operating in fintech and healthtech develop products or services that are so vital to life
means that the consumer and business demand for improved functionality and more innovation is always
going to be high, which is what investors will eventually look at.
Startups Funded In Fintech Expected To

Historical Reach Peak In 2020
The count of unique startups funded in fintech and healthtech is expected
to surge 14% and 8% in 2020 compared to
125
Number Of Unique Startups Funded
100
75
50
25
0
2014 2015 2016 2017 2018 2019 2020
Years
Fintech Healthtech
142
In case of fintech, the value of total funding amount in
2020 is estimated to be approximately $2.01 Bn which
is a decline of 22%, but this downfall is a simple market
correction of capital inflow in the sector, as the trend of
alternative year downfall is quite clear in fintech since
2014.
From 2015-2020, the capital inflow in this sector is

growing at a CAGR of 5%.
On the other hand, the count of unique fintech startups

funded is estimated to be 121 compared to 106 in 2019,
growing at a compounded annual growth rate of 12%
For healthtech, the value of capital inflow in the sector
for 2020 is estimated to be $580 Mn, which is a surge of
14% compared to $519 Mn in 2019. The funding
amount in this sector is growing at a rate of 12.4%
(2015-2020), while the count of unique startups funded
is estimated to reach 56, an 8% hike from 2019.
In 2021, provided that the market conditions are

favourable, DataLabs by Inc42 estimates the annual
capital inflow in the Indian startup ecosystem to reach a
new historical peak, much higher than the $13 Bn
invested in 2017, the peak funding year so far.
In August of 2017, the Supreme Court of India decided

that the “right to privacy is protected as an intrinsic
part” of the constitutional rights to life and personal
liberty. This paved the way to Personal Data Protection
Bill, 2018 (PDPB).
The PDPB is modeled after the GDPR (General Data

Protection Regulation), but there are significant
differences between the Indian legislation and European
law.
With clear legislation in place, Indian corporations are

taking the steps to implement privacy and data security
for their organisations. This has created a huge market
for data security services and products in India. India’s
cybersecurity market is expected to register an annual
growth of 15.6 per cent and rise to $3.05 Bn (about INR
21,600 Cr) by 2022 from $1.97 Bn (about INR 14,000
Cr) in 2019.
143
As per DataLabs estimates the funding amount and deal count in 2020 is not going to
be much different from 2019. The funding amount is estimated to be $12.6 Bn(1%
decline from 2019) whereas deal count is estimated to be 778(2% increase compared to
2019).
In 2021 we expect the investment activity to rise, making the total funding amount $17
Bn a new historical peak. Whereas, the deal count is estimated to be 799. The growth
rate(2015-2021) of funding amount is estimated to be 11%.
YoY Trends: Estimated Count Of M&As By 2021

The merger and acquisition activity is showing a downward trend in the near future
150
149
128
124
117
100
111
101
M&As Count
86
50
0
2015 2016 2017 2018 2019 2020 2021
Year
144
Methodology
The investment activity recorded in the report for the
year 2019 is dated from 1st January to 26th December.
The default base year for calculating growth rate(CAGR%)
is 2015, unless mentioned otherwise. The segregation of
funding stages in this report is done on the following
basis— seed stage(before pre series A), bridge(transition
funding rounds like Pre series A,B C), Growth
Stage(Series A and B) and Late Stage(Series C and
beyond).
The median is calculated using quartile two of the data

set. Forecasting of funding amount and deal count is
done using exponential smoothing on annual trend of
capital and deal inflow. The Top 5 technologies to look
out for in 2019 based on the problems these technologies
are capable of solving in context of the Indian economy.
We arrived at this list by considering the social and
economic problems these technologies will be able to
solve better than their contemporaries. The top sectors
and startup hubs are based on the number of deal
counts poured in the respective sector/hub between
2014 to 2019.
The roadblocks section has been formulated analysing

the impact of these policy changes on the investment
activity post and pre implementation. Our definition of
tier 1 cities include— Delhi NCR, Bengaluru, Mumbai,
Chennai, Hyderabad, Pune, Kolkata and Ahmedabad.
Whereas the “top three startup hubs” in the report is
referred to Bengaluru, Delhi NCR and Mumbai, derived
from their dominance in overall startup investment
activity since 2014.
145
Glossary
Tech Startup Technology enabled or CBDT Central Board of Direct Taxation

technology driven, highly scalable
businesses driven towards rapidly YoY Year-on-Year
creating massive impact
QoQ Quarter-on-Quarter
Seed Funding Funding raised in pre-seed, seed,
and angel funding rounds MoM Month-on-Month
Bridge Funding Funding raised in transition Mn Million

investment rounds like (Pre series
A,B C) Bn Billion
Growth-Stage Funding Series A and Series B are Tn Trillion

considered as growth stage
B2B Business To Business, B2C:
Late-Stage Funding Funding raised in Series C, Series Business To Consumer
D rounds and beyond it
B2B/B2C Business To Business/Business
Delhi-NCR Delhi and its adjoining areas like To Consumer
Noida, Gurugram, Faridabad, etc
B2C Business To Consumer
Unicorn A unicorn is a startup valued at
over $1 Bn H1 Half yearly January-June,
Soonicorns Startups that have a high chance H2 July-December

of joining the unicorn club
H1-2018 Duration January-22 June
Average Ticket Size Funding amount/disclosed
number of deals $XXK XX Thousand USD
$XXM XX Million USD
VC Venture Capital $XXB XX Billion USD
DCF Discounted Cash Flow 4W 4W 4 wheelers
DIPP Department of Industrial Policy & 2W 2W- 2 wheelers

Promotion
146
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https://ceoworld.biz/2019/01/02/most-startup-friendly-countries-in-the-world-2019/
https://www.heritage.org/
https://knowledge.wharton.upenn.edu/article/three-waves-tracking-evolution-indias-startups/
https://www.orfonline.org/research/the-indian-startup-ecosystem-drivers-challenges-and-pillars-of-
support-55387/
https://thepangean.com/A-Global-Perspective
https://tradingeconomics.com/india/unemployment-rate
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doing-business-2020-report/articleshow/71731589.cms?from=mdr
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2022-pm-economic-panel/story/367312.html
http://psa.gov.in/sites/default/files/pdf/RD-book-for-WEB.pdf
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https://www.ibef.org/economy/foreign-direct-investment.aspx
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years-1561749708898.html
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https://medium.com/startup-grind/https-medium-com-startup-grind-the-big-bang-theory-of-startup-india-
515544f4a17c
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https://inc42.com/buzz/women-account-for-only-a-fifth-of-indias-startup-workforce-report/
http://egazette.nic.in/WriteReadData/2019/214523.pdf
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framework.pdf
https://meity.gov.in/writereaddata/files/Draft_Intermediary_Amendment_24122018.pdf
147
Inc42 is a leading Indian media and information platform, known for its end-to-end coverage of the
Indian startup ecosystem. We work with the mission to empower, connect & grow the Indian Startup
Ecosystem by providing a deep understanding of the startup economy through data-backed news and
analysis.
Inc42 is the authoritative voice of the Indian Startup Ecosystem and it has brought to light the amazing
stories of thousands of startups, entrepreneurs, technological innovations, businesses and many
other constituents of the startup ecosystem.
Starting 5 years ago, Inc42 has now become the gateway to the Indian startup ecosystem, having
published more than 20,000 stories and touching the lives of more than 20 Million people in India
every month.
www.inc42.com
DataLabs
www.datalabs.inc42.com EDITED &
Credits
COMPILED BY
The research wing of Inc42 Media, DataLabs
Ankan Das
specialises in producing comprehensive data-
Sandeep Singh
driven and insightful reports about the ballooning
Naga Jayadeep Akula
Indian startup economy. Since its launch,
Nikhil Subramaniam
DataLabs has produced over 35+ reports —
covering diverse sectors such as Blockchain,
DESIGNER
Agritech, Foodtech along with regular coverage
of investments and the overall health of the Indian Manash Pratim
startup ecosystem. Ashish Vasdev
DataLabs reports are aimed at bridging the

INFOGRAPHIC
information & data gap about the Indian startup Naushad Alam
economy. In the last few years, DataLabs has
produced comprehensive & insightful reports to
ADDRESS
help readers make more informed decisions at

Inc42 Media
work, in investments, and more. It is responsible
59/16, 4th Floor, Jujhar
for producing detailed reports covering the
Tower RD Marg, Kalkaji,
diverse industries of the Indian startup ecosystem
New Delhi, Delhi 110019
spread across 29 states and 7 Union Territories of
India.
148
The data provided in this report has been obtained from
Disclaimer
public and private sources. We have made every attempt
to ensure that the information presented in this report is
accurate and free from any discrepancies. Ideope Media
Pvt Ltd, the parent company of Inc42 Media and Inc42
DataLabs, is not responsible for any inaccuracy in the
information presented or for any damages caused by the
use of information provided in this report. In case of any
discrepancy or errors in the data, you can contact us at
editor@inc42.com and we will try our best to update the
information in the digital version of the report. We are
constantly updating our database of startups. Due to new
startups from various domains being updated, previously
reported deals and amounts might vary.
This report has been prepared in good faith on the basis of

information available at the date of publication without any
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information in this publication. Readers are responsible for
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A N N U A L R E P O R T

Indian Tech Startup

The report will provide readers with an in-depth analysis of

Fintech & Ecommerce

From 29K startups in 2014, the numbers grew exponentially

Thanks to this favourable environment, Indian startups have

However, the preference of late-stage investments rather

Like in the past, sectors such as enterprise tech, ecommerce,

India’s tech capital, Bengaluru, continued to lead the hubwise

Top Funding Grossers Of 2019 © Inc42 Media | not for distribution

Paytm Renew Power Udaan Ola Delhivery

Funding Amount Deal Count

Lowest Number Of Indian Startups Funding In

Median Funding Amount &

Median Funding Amount Median Funding Amount (W/O)

Average ticket size Average ticket size (W/O)

Key Trends Observed

Median funding amount and average ticket

The median funding amount and average

38% and 19% CAGR of median funding

The growing popularity of late stage

primary reason behind the soaring value of

0% 25% 50% 75% 100%

Bridge Stage Growth Stage Late Stage Seed Stage

Seed Funding Crunch Intensifies

0% 25% 50% 75% 100%

startups funded at seed seed stage

2014 2015 2016 2017 2018 2019

Median $376K Median $389K

Median $224K Q1 $240K Q1 $235K

© Inc42 Media | not for distribution

Fewer Startups Funded At Seed Stage

2014 2015 2016 2017 2018 2019

Key Trends Observed

Seed funding in the Indian startup ecosystem

Both, the count of funding deals and startups

The share of seed deals in total deals

The shift in investor preference towards late-

Hubwise, Delhi NCR and Bengaluru recorded

Enterprise tech and ecommerce recorded

Bridge Funding Amount Record Historical Jump

17 Source: Indian Tech Startup Funding Report 2019

Source: Indian Tech Startup Funding Report 2019

After 2017 Decline, Bridge Funding Contribution

Source: Indian Tech Startup Funding Report 2019

The need for scaling up the business

All three indicators — funding amount, deal

As per historic data (2015-2019), maximum

© Inc42 Media | not for distribution

$2.2 Mn $4.8 Mn $12 Mn

$1.8 Mn $5.1 Mn $15.5 Mn

Source: Indian Tech Startup Funding Report 2019

Unique Startups Funded Stagnant

Source: Indian Tech Startup Funding Report 2019

Source: Indian Tech Startup Funding Report 2019

Key Trends Observed

Overall, there is a minor slowdown in the

© Inc42 Media | not for distribution

$11.7 Mn $23 Mn $75 Mn

$15 Mn $31 Mn $90 Mn

$14.2 Mn $39.2 Mn $72 Mn

$13.7 Mn $32 Mn $100 Mn

$9.8 Mn $24.7 Mn $103 Mn