Indian startups have recently witnessed a good boost in funding. It is basically due to the supportive government reforms and growing investor confidence. At least 31 homegrown startups raised more than $466 million across 22 deals in the past week and the figure is a substantial 75% increase from the previous week. The surge in funding highlights the dynamic nature of India’s startup ecosystem. It also simultaneously highlights the positive impact of a favorable regulatory environment.
One standout fundraise of the week was by quick e-commerce platform Zepto. It successfully secured $340 million in a follow-on financing round that was led by General Catalyst and witnessed participation of new investors Dragon Fund and Epiq Capital. Zepto’s valuation is now $5 billion and this reflects strong investor interest in the potential of India’s digital commerce sector. Other notable investments included $35 million raised by specialty coffee retailer Blue Tokai Coffee, $30 million by lending firm Yubi, $17.3 million by agri-inputs platform AGRIM and $10 million by post-sales service firm Servify. Swiggy also secured undisclosed funding from Amitabh Bachchan’s Family Office.
Bengaluru-based startups led the funding wave with eight deals. Mumbai and Delhi-NCR closely followed. A recent report by Boston Consulting Group (BCG) and Z47 (formerly Matrix Partners India) reveals fintech sector has generated more than $100 billion in value over the past decade in the country. The number of fintech companies has quadrupled in the last four years. A threefold increase has been witnessed in the number of unicorns and soonicorns during the same period.
The government’s proactive support has been a key driver of this growth. As of June 30, the government has recognized 1,40,803 entities as startups and implemented more than 55 regulatory reforms since 2016. Moreover, the government has approved funding for four startups in the field of technical textiles, each receiving a grant of Rs 50 lakh.
