As the virus spread across India, investors began to worry about the impact on their firms.
They exchanged notes and wrote a letter to the local startup community.
The South Asian market was engulfed by the virus in the months that followed, as well as hitting the brakes on funding activity. The startup began to cut expenses. Entrepreneurs and investors stepped up to help the nation fight the Pandemic and some of them got acquired in fire sales.
The impact of the virus on the country and the firms trying to fuel the economy were predicted by investors. Few were prepared for what was about to happen.
Scores of startups began to report fast growth. Mirae Asset Venture's India business started to grow in one year, with three years and five years of growth.
Several investors, including many tier 1 funds that are generally very active in India, were still cautious, but a group of investors including Tiger Global, Falcon Edge Capital, and SoftBank moved into a higher gear.
Alpha Wave Global, formerly known as Falcon Edge Capital, likes to get aggressive when other funds are cautious about the market, according to Navroz Udwadia.
In February this year, Tiger Global backed the business-to-business e-commerce platform, and in two months it had a valuation of over $1 billion.
In a letter to investors in February, Tiger Global said it sees an opportunity in areas such as consumer, enterprise, and financial technology in the U.S., China, and India.
Many investors said that several factors worked in India's favor. There is an abundance of dry powder in the market and investors are looking at growth avenues such as emerging regions as their next big bets. It helped that Beijing made it difficult for foreign money to flow into China.
The record number of IPOs that we saw this year swung in favor of India. Zomato made a great debut. PolicyBazaar made a strong debut on the stock exchanges. The public market is giving it less valuation than it sought, despite the fact that it filed for the nation's largest IPO.
Many investors have faced an exit challenge due to Indian startups going public.
The investors were bullish on India in April, when the virus began to gain pace again.
In April, eight Indian startups joined the club. There are five of these.
The talent in the market was in a crunch because of the sudden flow of cash. Employees were offered lucrative stock options and salary hikes in order to retain them.
According to data from insight platform Tracxn, the amount of capital flowing to private Indian startups this year has 888-405-7720 888-405-7720.
India now has 81 unicorns, 44 of which joined this year. In a recent round, Insight Partners and Tiger Global invested in the company, which is giving millions of Indians access to credit card features and helping them build credit scores.
CRED has raised three funding rounds and is in talks for a fourth one. Byju's has raised over a billion dollars in the last year. The startup doubled its valuation in two months.
Two people familiar with the matter said that a high-profile investor is about to close a round of funding for Jar, which is helping hundreds of thousands of Indians start their investment journey. The startup is expected to increase its valuation by 15 times in the new round.
A person familiar with the matter says that a Bangalore-based company that helps developers transition to web3 is about to close a round of funding. According to a report this month, Polygon is in talks to raise money. According to two people familiar with the matter, Amazon is in talks to back a startup.
Dave said that the arrival of Shark Tank in India was one of the recent developments in the country. Indian parents are no longer hesitant to tell their friends that their child is working at a startup. Everyone knows what a startup is. I had to explain to my dad what I do.
A person familiar with the matter says that Tiger Global is currently conducting due diligence on nine more startups in India. Other than Tiger Global, SoftBank, and Alpha Wave Global have invested in the country. SoftBank has invested billions of dollars in India. Alpha Wave Global has poured over $2 billion.
Many of their global peers have taken India more seriously because of the frenetic pace at which some of these firms have written checks to Indian startups. This year has seen a record 20 investments by the company in India.
Insight Partners, which became more prolific in India this year, made some changes to its investment process to speed up the time it takes to back a startup, two people familiar with the matter said. Two people with knowledge of those proceedings say that it is currently engaging to back Indian NFT platform Faze.
General Catalyst is building a team in India. A person familiar with the matter said that the firm is in talks to back a number of startups. This year, the company made its first investment in India. B Capital Group has a new India head.
Dave said that Tiger has changed the game. Every fund on the planet tries to figure out what is the best they can do when they re look at their strategy. Not everyone can play Tiger. What is the best you can do? You can't play the same game that you used to.
The most prolific investor in India and Southeast Asia is Sequoia Capital India. It has made over 60 investments this year.
Dave expects the pace of investments to continue in the new year. The market will become more competitive. Look at the number of people who are starting to invest.
The market is large overseas. The number of investors is large. That is not the case in India. The competition for good deals is very high.
