In 2020, the top three sectors—consumer tech, SaaS, and fintech accounted for nearly 75% of
all VC investments by value

Mumbai - March 17, 2021 - Despite the Covid-19 pandemic, India witnessed continued momentum in venture capital (VC) money flows with total deal value reaching $ 10 billion in 2020, the highest across all years barring 2019, according to Bain & Company's India Venture Capital Report 2021. India maintained its robust position among the top five start- up ecosystems globally, with 7000 new start-ups founded in 2020 along with the emergence of 12 new unicorns to take India's unicorn tribe to 37.

The report, done in partnership with Indian Private Equity & Venture Capital Association (IVCA), highlights the dramatic impact of Covid-19 in accelerating digital trends, which was reflected in VC money flows and the emergence of new and digitally founded business models across sectors. The top three sectors—consumer tech, SaaS, and fintech accounted for nearly 75% of all VC investments by value, with consumer tech attracting the maximum funding.

“2020 was truly extraordinary as we saw Covid-19 have a significant impact on our economy and healthcare systems, while also accelerating digital adoption across sectors,” said Arpan Sheth, partner at Bain & Company and one of the report's authors. “This adoption led to a continuation of trends seen over previous years, including strong deal flow, focus on consumer tech and SaaS and continued growth in start-ups.”

The year 2020 was also noteworthy for the Indian VC industry with some moderation seen over the high growth observed in 2019. While the total deal value declined slightly to $ 10 billion in 2020 from $11.1 billion in 2019 due to smaller average deal size, deal volume grew by 7% with approximately 810 VC deals versus 755 seen in 2019. Growth in deal volume, signaled strong fundamentals for India’s start-up ecosystem with new business models keeping pace with the challenges seen in 2020.

In terms of key sectors, consumer tech, SaaS, and fintech continued to lead the way, accounting for 75% of VC investments in 2020 and 14 of 22 deals which were more than $ 100 million in size. Subsectors including edtech, foodtech, gaming and media and entertainment in consumer tech; verticalised solutions within SaaS; and payments within fintech recorded a massive increase in investments, accelerated by the pandemic. While consumer tech investments grew by 25% over 2019, there was a significant surge in the usage of edtech platforms, as well as growth in the average deal size in foodtech as compared to 2019, with large investments leading to the surge seen in gaming.

Editor's note: To receive a copy of the report or arrange an interview, contact:

Indian media contact: Aparna Malaviya| Bain & Company, India Tel: +91- 9820273038 | Email: aparna.malaviya@bain.com

International media contact: Calla Payne | Bain & Company, Hong Kong Tel: +852-6020-7693 | Email: calla.payne@bain.com

About Bain & Company

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About IVCA:

The Indian Private Equity & Venture Capital Association (IVCA), is the apex body promoting the Alternative Investment Asset Class in India and promotes stable, long-term capital flow (Private Equity (PE), Venture Capital (VC) and Angel Capital) in India. With leading VC/PE firms, institutional investors, banks, corporate advisers, accountants, lawyers and other service providers as members, it serves as a powerful platform for all stakeholders to interact with each other. Being the face of the Industry, it helps establish high standards of governance, ethics, business conduct and professional competence. With a prime motive to support the ecosystem, it facilitates contact with policy makers, research institutions, universities, trade associations and other relevant organisations. Thus support entrepreneurial activity, innovation and job creation.