Indian startups raised $6.5B funding in Q2 2021, 11 new unicorns created: Report

Indian startups raised about $6.5 billion in funding in the April-June 2021 quarter, while 11 of them entered the coveted unicorn club, a report by Nasscom-PGA Labs said.

During the second quarter, 160 funding deals were closed — up 2 percent from the January-March period.

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"Q2 2021 has been impeccable for the startup growth story. From being the most funded quarter, it has also added the most number of unicorns. Standing tall during the pandemic second wave headwinds, the Indian startup ecosystem has shown a strong resilience in this quarter," the report said.

Funding raised in June quarter was at $6.5 billion, up by 71 percent quarter-on-quarter.

The biggest deal during the quarter was the $800 million fund raise by food delivery platform Swiggy, followed by ShareChat ($502 million), BYJU'S ($340 million), PharmEasy ($323 million) and Meesho ($300 million), the report said.

Pine Labs raised $285 million, Delhivery $277 million, Zeta $250 million, CRED $215 million, and Urban Company $188 million in the June 2021 quarter, as per the report.

"The Indian startup ecosystem that generated 53 unicorns till June 2021 has made great strides in the April-June quarter. From recording most funding deals to adding the most number of unicorns in a quarter, investors' confidence in good-quality digital businesses has strengthened like never before," PGA Labs Director, Competitive Intelligence Abhishek Maiti told PTI.

He added that the deal flow looks promising for the latter half too as India opens after series of lockdowns and sectors such as fintech, foodtech and healthtech continue to benefit from pandemic-induced adoption.

Fintech was the most funded sector, accounting for 27 percent of the total deal value in the reported quarter.

This was followed by foodtech (13 percent), enterprise tech (11 percent), edtech (10 percent), and media and entertainment (8 percent).

Growth stage funding accounted for 61 percent of the total deal value, it added. About 100 startups received funding in the early stage, accounting for 9 percent of the total funding raised.

The June 2021 quarter also saw the rise of 11 unicorns (companies with $1 billion valuation) — Urban Company, CRED, Meesho, Groww, ShareChat, PharmEasy, Zeta, BrowserStack, Moglix, Gupshup, and Chargebee.

This has taken the total number of unicorns in the country to 53 as of June 2021.

About 27 percent of the unicorns added in the second quarter of 2021 were fintech startups, while 18 percent each belong to SaaS (software as a service) and social commerce, the report said.

Interestingly, Tiger Global invested in 64 percent of the unicorns during the second quarter of 2021.

The report noted that B2B startups raised over $1.9 billion across 85 deals, with an average deal size of $22 million. The top three B2B funded startups were Zeta, Razorpay, and Axtria.

B2C startups raised over $4.2 billion across 75 deals, with an average deal size of $56 million. The top three B2C funded startups sere Swiggy, ShareChat, and BYJU'S, the report added. DeepTech startups raised $450 million across 29 deals.