India’s start-up ecosystem has established itself over the years. Now we have legacy sectors like Fintech, Enterprise Tech, RetailTech and HealthTech which represents a major chunk of the start-up ecosystem, emerging sectors like Edtech, FoodTech, SCM Logistic etc. and few sectors like proptech, social commerce etc. which are in nascent stage. Start-ups under these verticals keep evolving and innovating. So what happened among these start-ups verticals in the last quarter?
- ~50% deals were in 3 specific verticals – Enterprise Tech, FinTech and Ed Tech
- Large ticket deals helped EdTech and FoodTech to account for more than 46% of total funding
- FoodTech though stands high in term of deal value but due to monopolistic model it lacks far behind in deal volume
Fintech Trends:
- FinTech continues to dominate by raising 16% of the total Q3 CY21 funding and add 2 new unicorns: CoinDCX, BharatPe
- Payments and BFSI investors raised ~55% of total Fintech funding
- Growth- stage funding dominated funding deals by value (~73% share)
- Crypto Fire: Due to high growth, increased popularity and adoption Crypto has seen a major boom, large entrepreneurs and VCs are actively investing in Crypto start-ups
- IPO Season: Many Indian Fintech start-ups have filed their DHRP with SEBI, plan to raise up to US$ 3.7B through IPOs
- Buy Now Pay Later: Low credit card penetration in India and digital payment boost is helping this area to grow, a high potential market which is expected to reach US$ 100B by 2025
HealthTech Trends:
- E-pharmacy, teleconsultation, personal health management, EHR/EMR and increasing use of AI/ML gain traction
- Preventive healthcare is expected to act as a catalyst for HealthTech growth in the next 5 years
- New, more digitally educated consumer segments are pushing for innovative health and wellness solutions
RetailTech Trends:
- RetailTech continues to see good momentum with 16% of the total Q3 CY21 funding
- Marketplaces catch investor’s eyes and raised ~25% of total RetailTech funding. B2B marketplace is getting lot of traction.
- Aggressive national and overseas expansion: Lenskart is looking to expand into Southeast Asia and Middle East with proceeds from recent round of US$ 220M
EnterpriseTech Trends:
- India’s EnterpriseTech sector remains attractive driven by increasing demand for tools in the world of big data, cloud, mobility, IoT and cybersecurity
- SaaS / AI continue to attract investor’s interest with ~81% of total EnterpriseTech funding
- Growth – stage funding dominated with 56% of total EnterpriseTech funding
- Strong growth in EnterpriseTech is driving investments in reskilling the talent in new growth areas such as SaaS, cybersecurity, AI, 5G, IoT, product engineering
- SaaS companies building strategies around penetrating SMB market, small retailers, large SaaS companies setting up office in rural and non-urban areas
- Rise in cyber threat increases demand for AI driven products / solutions
Edtech Trends:
- Received funding of ~$1.5 bn in Q3CY2021
- EdTech is going consolidation phase start-ups with mature start-ups focusing on expansion and newer start-ups building innovative solutions
- EdTech platforms focus on holistic curriculum to attract new-age learners, platforms have also expanded to domains other than academics
- 3 unicorns added: Vedantu, upGrad, and Eruditus
Verticals are evolving and getting innovate with time. On one side legacy sectors sees addition on newer start-ups and stock market listing while emerging sectors are expanding their business portfolio to increase their reach and penetration. A lot is happening in this start-up era.
