The end of quarter 3 mirrors new hopes and aspirations in the startup ecosystem. Although, the investment has gone down, more number of investors have turned up to place their bets. New avenues have opened for industry veterans. Although the investment trends doesn’t negate the future of startup ecosystem, the increase in number of investors invariably indicates the keen optimism of investing ecosystem. To sum it up “ABHI TOH PICTURE BAAKI HAI MERE DOST”.
Investors take a Cautious First Approach, Slight Dry Up in Q3
Following 2 consecutive quarters of decline, Q3 has also been hit with a cautious approach of investors and has seen a slight decline as compared to Q2 (USD 1.5bn) and Q1 (USD 1.7bn). A total of 288 startups have cumulatively raised USD 1.363bn this quarter.
Deals Scarcity on the Rise
Deal activity had already gone down noticeably in Q2’16 (310) as compared to Q1’16 (344). This quarter has again seen a decline of 5% in deals to 295.
Market Moves Towards Consolidation, Significant Rise in M&As
With 65 M&A deals, Q3 2016 has seen an exponential increase in M&A activity in the Indian Startup Space as compared to the previous quarters of 2016 with 40 deals in Q1 and 48 in Q2 2016.
Investors Playing Safe by Investing at Late Stage
Surprisingly, there has been a 21% decrease in Early-stage deals in Q3 as compared to Q2. On the other hand, Late stage deals have seen a 50% increase as compared to Q2.
Delhi-NCR Still Remains the Love of Investors
Delhi-NCR still grabs the first place with the highest number of deals (98) constituting one-third of the total deal size, followed by Bengaluru with 80 deals. Even among the M&A’s, Delhi-NCR remains the hotspot with 19 deals in its kitty.
Think eCommerce days are over?? Think AGAIN
eCommerce still remains the preferred industry for investors with 46 startups coming up with more substantial business models, followed by 26 SaaS – based startups. Healthcare and Fintech still surprises to innovate more and have bagged 22 deals each.