2020. A year of uncertainty and money loss. A time when even the big corporates around the world stood stunned. The lives of millions of people and the future of thousands of entrepreneurs darkened. For the first time since World War II, supply and demand plummeted. Shadows of despair blanketed the whole world. But after the initial setback, the business world slowly emerged with stories of COVID survival. Let’s take a look at the events of the country’s startup ecosystem in 2020. A quick recap.
The lockdown served as a stepping stone to success for the business-to-customer segments like EduTech, Grocery, Healthcare and FoodTech that converted risk into opportunity. In 2020, the Edutech segment achieved $1.7 billion while the food delivery segment received $1.4 billion. Digital wallets like ‘PhonePe’, ‘MobiKwik’, real money gaming platforms such as ‘MPL’, ‘WinZO’, online restaurants such as ‘Biryani By Kilo’, ‘Box8’ and e-commerce logistics companies like ‘XpressBees’ and ‘Vinculum Solutions’ caught the attention of investors during the COVID period.
According to Tracxn data, Venture capital, investors, private equity players, corporates, accelerators and angel investors together invested $11.4 billion this year. This decade’s second-highest annual transaction value. Investments in 2020 began with ‘Byju’s’ raising $800 million and Walmart’s ‘PhonePe’ raising $700 million. ‘Zomato’ also raised $660 million in multiple rounds. ‘Sequoia’, ‘Chiratae Ventures’ and ‘IvyCap Ventures’ introduced innovative programmes to support startups.
The Corona era also saw new startups entering the Unicorn club. A total of 12 Indian startups became Unicorns in 2020. The biggest number of unicorns in a calendar year so far. This brings the number of Unicorn Indian startups to 42. ‘Unacademy’, ‘Pine Labs’, ‘FirstCry’, ‘Zenoti’, ‘Nykaa’, ‘Postman’, ‘Zerodha’, ‘Razorpay’, ‘Cars24’, ‘Dailyhunt’, ‘Glance’ and ‘Nxtra Data’ surpassed the $1 billion mark this year, becoming unicorns.
Mega-funding deals in the startup scenario also took place during this time. As of November 2020, $10.6 billion reached Indian startups via 905 deals. If we take the top 10 deals, they have achieved 38% of the total capital raised by Indian startups in 2020. While the funding fell in 2020, the total number of transactions increased significantly compared to last year. Funding for the Indian startup ecosystem accelerated in the third quarter of 2020.
Merging and acquisition rose 79% in the third quarter of 2020, with an average growth of 23%. Last year, the startup ecosystem saw 111 merging and acquisition deals. The acquisition of ‘Urban Ladder’ by ‘Reliance Retail’ is the largest Indian startup acquisition in terms of mergers and acquisitions. In this acquisition, ‘Urban Ladder’ received Rs 182 crore. The same year witnessed BYJU’S acquiring Mumbai-based online coding platform ‘WhiteHatJr’ for $300 million. It has become the largest Merger and Acquisition in the Indian edutech sector. Bangalore-based mobile gaming startup ‘Mecha Mocha’ was acquired by Walmart-owned ‘Flipkart’ for an undisclosed amount. Reliance acquired e-pharmacy startup ‘Netmeds’ and thus entered the online medicine delivery market. COVID persuaded many businesses to adopt digital B2B solutions. Enterprise tech became the top-performing sector in the third quarter of 2020. Enterprise tech and media-entertainment performed well in Q3 through seed funding.
2020 saw the central government banning more than 220 Chinese applications, including ‘TikTok’ and ‘PUBG’, which benefited many Indian startups. This paved way for Indian apps like ‘Chingari’, ‘Roposo’, ‘Mitron’, ‘Bolo Indya’, ‘Trell and MX TakaTak’ to reach native users. FAUG was the Indian alternative to PUBG.
Although the startup world also fell under pressure like other industries, it slowly adapted to the situation and enters 2021 with a new vision and hope.
