In 2015, there was a fund recession in the Indian economy and new businesses were laying low in terms of risky ventures and expansion. However, the tough winter seemed to have thawed since 2018, and new blooms have been in sight for the startup financing sector. Overall, Indian startups recorded a total funding of 2.2 billion dollars in the first quarter of 2018, and this significantly grew to over three billion dollars as of quarter one in 2019.
The Japanese giant Softbank led the funding race with over with over eight billion U.S. dollars invested in India since 2014, as it aims for a whopping 100-billion-dollar vision fund. Amongst the companies that have benefited the most through venture capital deals, the popular food delivery service Swiggy stood out with over 1.3 billion dollars raised in 2018 alone. In general, the hyperlocal sector was in the limelight as the sector with the most funding, as well as the highest B2C deals across the country.
Multiple reasons point to this change in the startup funding landscape. While ten years ago startups had limited options to raise money, off-late there has been a surge in private equity and venture capital funding for new businesses at any given stage. Secondly, the source of capital has also been diversifying through multiple foreign investors as well as a startup friendly political bent seen in the Modi administration. Global incubators and accelerators are seeing India as an ocean of opportunity and it remains to be seen how the boom-and-bust cycle of startup financing will pace itself out in the country.