Apoorva Sharma, co-founder and President, Venture Catalysts said, India is currently the third largest startup hub in the world and continues to attract a lot of VC and PE investors due to its comparatively faster growth rate, population and young demography. The country is home to over 50,000 startups and 34 unicorns that itself speak volumes about the high investor sentiment in this country’s startup ecosystem.
"We expect the investment
activity to heighten in the coming months as Covid-19 has opened opened several new and first time opportunities for startups as the consumer habits are fast changing. Fintech, edtech and consumer driven startups are likely to raise more funds and grow faster. We also expect a new found interest from the investors in the SaaS segment as more and more businesses are looking to move online and adopt digitalisation following the Covid debacle," said Sharma.
Pranav Pai, Managing Partner at 3one4 Capital added, growth capital has certainly resumed taking positions across sectors over the last quarter.
"We are observing a significant flight to quality now, and the top companies
in every segment being tracked by global investors in India are seeing renewed inbound interest. The pandemic has acted as a universal filtering event and companies
that are coming through stronger - with better utilisation, greater growth rates, higher margins, and increased staying power - are able to close funding rounds much more efficiently than before," said Pai.
The digitisation of these segments has accelerated measurably, and this is the trend being captured by the market-leading startups. If these companies
are able to sustain market share post this expansion and establish their new positions quickly, this could end up becoming a defining moment for most of them.
Most of the growth sectors that have benefitted from this acceleration - consumer services such as groceries, select consumer brands, edtech, SaaS, payments and fintech infrastructure, gaming & entertainment, etc. - will be the beneficiaries of this investment interest. The acceleration of growth and a clearer path to scale economics (revenue, margins, and sustainability) are the more important drivers of this interest, added Pai.