What COVID-19 crisis means for India’s startup funding ecosystem in 2020
The COVID-19 crisis has brought a change in startup investment patterns. Venture capital firms are shifting their focus from tech-centric startups to the ones operating in sectors such as FMCG, online grocery delivery, home entertainment etc.
The year 2019 was a blockbuster one for startups in India, drawing a record number of international investors. According to research firm Tracxn, the startup community raised about $14.5 billion in funding – a significant jump from $10.6 billion in 2018. Data from Tracxn further reveals that 1,894 startups were founded last year, out of which nearly 50% (887) received funding.
Also in 2019, nine Indian startups joined the Unicorn club and four got publically listed. OYO Rooms, Paytm and Udaan were among the startups to grab the most valuable deals, followed e-commerce player Delhivery.
Naturally, the expectations from 2020 were high, if not even higher. Although the year started off well for startups and investors alike, the outbreak of novel coronavirus or COVID-19 soon dampened their spirits. With many sectors coming to a near halt, budding ventures began anticipating the worst – a severe liquidity crunch. As it turns out, their fears were justified. Public markets are crashing and venture capital funds have become extremely cautious towards their spending. Deep-pocketed glo ..