Why it's raining Unicorns in India this monsoon

A total of 635 venture capital funding deals valued at $9.7 billion during H1 2021 led to a start-up boom.

It’s raining unicorns in India as start-ups go through an unprecedented funding boom that started in the first half (H1) of 2021, fuelled by the strong underlying fundamentals of the Indian economy and a rapidly-changing consumer spending habits and platforms.

A total of 635 venture capital funding deals were announced in India during the period, while the corresponding disclosed funding value of these deals stood at $9.7 billion, according to GlobalData.

The disclosure comes in the same week when BlackBuck, one of the handful of Indian start-ups that is digitizing the freight and logistics sector across India, attained unicorn status after securing new funds.

Tribe Capital, IFC Emerging Asia Fund and VEF led the $67 million Series E financing round in the six-year-old start-up, valuing it at $1.02 billion (up from about $850 million in 2019 Series D round), BlackBuck chief executive Rajesh Yabaji told TechCrunch.

BlackBuck is the 16th Indian start-up to become a unicorn this year.

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SoftBank's bet on Swiggy

Also, this week, Japanese investment giant SoftBank put a massive bet on India’s food delivery market – with Swiggy closing a $1.25 billion financing round led by SoftBank Vision Fund 2 and Prosus. The new financing round, a Series J, includes the $800 million investment the Bangalore-based start-up had disclosed to employees earlier this year. SoftBank alone invested $450 million in the new round. The new round, which Swiggy says was “heavily oversubscribed,” gives the six-year-old food delivery start-up a post-money valuation of $5.5 billion.

An analysis of the Financial Deals Database by GlobalData reveals that VC funding activity in June 2021 witnessed a massive growth when compared with January 2021, though the months in between showcased fluctuating activity.

Most of the months during H1 2021, except May, experienced growth in deal value while February and May were the two months that experienced decline in deal volume. Despite the fluctuating activity, India managed to account for 18.4per cent and 14.1per cent of the region’s total deal volume and value, respectively, during January-June 2021.

Big ticket investments

“Considering the second wave of the COVID-19 pandemic, VC investors were seen shying away from committing big-ticket investments in India during H1 2021. Nevertheless, some of the start-ups in the country still managed to gain investors’ traction amid the challenging times,” said Aurojyoti Bose, lead analyst at GlobalData.

Some of the notable VC funding deals announced during January-June 2021 in India were $502 million raised by ShareChat, $500 million funding by Zomato Media, $400 million raised by Dream11 Fantasy, $400 million raised by Dream Sports and $350 million funding by Byju's.