Indian Startups Tipped To Attract Record High Investment In 2019

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Skyline of Mumbai from across Back Bay.
Skyline of Mumbai from across Back Bay. Cididity Hat | Wikimedia Commons

Indian startups are on the radar of venture capitalists, and this was signaled by the rise in investment inflows that the nation has attracted in 2019. In the first quarter of the year, the capital allocation that the country received has increased, thus resulting in the entry of more startup players in the same period.

In a report by India-based Entrepreneur, it was estimated that around 50,000 startup firms are now operating in India, and these actors played a defining role in the influx of VC investments that the country has seen from January to June 2019. Up to $3.9 billion worth of capital inflows have been recorded during the same span, the same report indicated.

A total of 292 deals of investments have been sealed in the period, which spurred the growth of 44.4 percent in the startup segment. It is projected that 2019 will be a banner year for Indian startups, which in 2018 were able to draw in nearly $3 billion in total investments.

Industry analysts said the ongoing expansion of Indian startups has inevitably precipitated the country’s business ecosystem. In addition, India has caught the attention not only of region-based but also of international investors.

One case in point was the acquisition of online retailer Flipkart by U.S. retail giant Walmart for $16 billion, which kicked up the Indian company’s valuation to $22 billion in the immediate aftermath of the deal.

According to Entrepreneur, the recent maneuver by Walmart is in preparation to engage online retail behemoth Amazon’s entry to Asia. It is believed India will serve as Amazon’s springboard for a larger business plan in the whole of Asia.

Yet more notable on Walmart’s pivot to India is the resulting rise in interest by startup investors on the Indian scene. Following the Flipkart-Walmart deal, the presence of startup investors in India jumped by up to 10 times as stakeholders of the U.S. company started giving the country due attention.

The rise in startup investments also indicated that international capitalists are beginning to see the huge potential that can be realized by doing business with small and startup firms, which have been reaping benefits lately in the form of increased valuation.

As a testament to this trend, Entrepreneur said that 10 Indian startup deals have been reported in the last five months, and each deal boasted of worth that is at least $100 million more from the same transactions inked in the last two years.