EMERGING STARTUP INVESTMENT OPPORTUNITIES IN INDIA AUGUST 2020
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EMERGING STARTUP INVESTMENT OPPORTUNITIES IN INDIA
AUGUST 2020
The information contained in this document is not an advice or opinion. The contents recorded in the document are for information purposes only and should not be used for commercial purposes. AL Consulting disclaims all liability to any person for
any loss or damage caused by errors or omissions, whether arising from negligence, accident or any other cause. 2020 AL Consulting. All rights reserved.CONTENTS PAGE
GLOSSARY 1
STARTUP ECOSYSTEM IN INDIA 3
VC INVESTMENTS IN INDIA 4–5
JAPAN & INDIA: COLLABORATION & VC INVESTMENTS 6–7
OVERVIEW OF EM ERGING SECTORS IN INDIA 8 – 15
SOURCES 16
Privileged & Confidential 1WORDS MEANING
$ United States Dollar
Bn Billion
CAGR Compound Annual Growth Rate
FDI Foreign Direct Investments
FY Financial Year
Mn Million
NBFC Non-Banking Financial Company
OTT Over the top media platform
SaaS Software as a Service
VC Venture Capital
PE Private Equity
H1 First Half
Privileged & Confidential 1インドには世界最大級のスタートアップ・エコシステムが存在しています。インドでは過去5年間でスタートアップの数が大幅
に増加しています。これらスタートアップに対するPEやVC等の投資家からの投資も増加しており、各セクターにおける取引量
や取引金額の増加に反映されています。
投資家からの注目が高まっている新興セクターには、Fintech、Edu-Tech、Heath-Tech、E-Pharmacy、Online Gaming、Agri-
Tech等があります。これらは、特にCOVID-19によるパンデミック下において、消費者のオンライン取引への依存度の高まりや
企業のオンラインビジネス戦略の再構築の開始等を受け、重要性が増してきています。
また、投資家は、かかる状況下においては、テクノロジー、消費財（必需品、個人消費・ヘルスケア、食品加工・小売）、医
薬品、医療サービス、電子商取引等のディフェンシブなセクターへの投資を好む傾向にあります。
パンデミックの影響はまだしばらく続くことが予想されますが、新たな投資機会、新興セクターの台頭、高いバリュエーショ
ンの魅力的企業等については、着目すべきでしょう。本資料では、インドのスタートアップ・エコシステム、インドにおける
PE・VCの投資動向、日印間のコラボレーション、アーリーステージにおける日本からインドへの投資状況、インドで急成長中
のスタートアップ等の情報について、取り扱っています。
また、スタートアップ業界の現状、世界のスタートアップ業界におけるインドの立ち位置、トレンド、主要統計数値等の情報
およびデータについても紹介しています。資料内の各数値は、様々な公開ソースから収集されたものであり、最終頁に各ソー
スについて、まとめてあります。
我々AL Consultingとしても、上記のようなスタートアップ・エコシステムの動向については大いに注目しており、インドの投
資環境から見た潜在的な投資機会についての情報提供をさせて頂ければと思い、本資料を作成した次第です。是非ご一読頂き、
少しでもお役に立てれば幸いです。
よろしくお願いします。
AL Consulting team
Privileged & Confidential 2India’s position
• Top 5 start-up ecosystems
• Number of startups: 80,000+ Numbers as of
Key Details
• Between 2012 and 2019: 2019
➢ number of start-ups increased by 17% each year
➢ number of funded start-ups increased 19% CAGR Unicorns 20
• Ranking for ease of doing business: 63 in 2019, improved
from 130 in 2016
• Leading sectors in 2019: e-commerce, SaaS & Fintech Funded start-ups 6,400
Incubators & Accelerators 400+
Emerging Sectors
• Health-Tech (pharma, life sciences)
• Ed-tech
Internet users 520 Mn
• E-Commerce & Delivery Based Services
• OTT Platforms & Online Gaming
• SaaS & Remote Working Tools
• FinTech Engineering students 1 Mn +
Privileged & Confidential 3H1 of Calendar Year 2020 Annual VC Deal Volume
1200
• Globally, VC backed companies raised $61 Bn 987
across 4,260 deals in Q1 of calendar year 2020 1000
854
800 750
• PE & VC investments in Indian startups was
recorded at $20 Bn largely driven by significant 589 571
600
investments in Reliance Jio (telecom)
400
• Major Sectors: Edu-tech, food delivery, Health-
Tech and IT&ITES 200
0
• Top companies which attracted investments are:
2015 2016 2017 2018 2019
Byju’s (edu-tech), OYO (hotel aggregator),
Swiggy (food delivery), Postman (API
development platform), FreshToHome (fresh
Annual VC Investments and Exits in India (Bn $)
food delivery), Yellow Messenger (Bots /
conversational platform) and iMerit (IT services – 25
20.9
AI). 20 Investments
15 Exits
10
10 6.3 6.4
4.8 4.7 4.2 5.2
5 2.5 1.9
0
2015 2016 2017 2018 2019
Privileged & Confidential 4Average VC deal size across sectors (Mn $) Average VC Investments Per Fund
30 26.7 (Mn $)
25 30 26
24
20 16.9 16.8 25 21
14.3 13.2
15 11.6 11.9 12.1 20
15 16
10 15
5 10
0
5
ConsumerTech FinTech Software / B2B Commerce
SaaS & Tech 0
2018 2019
2015 2016 2017 2018 2019
Average Deal Size Across Stages (Mn $) Average VC Deals Per Fund
80 3.3
3.5
60
60 3 2.8
2.6
2.5 2.2
40 1.9
26 2
18.3 21.3
20 8.2 1.5
6.3
0.7 1.2
0 1
2018 2019 0.5
Seed Stage Early Stage (Series A&B)
0
Growth Stage (Series C) Late Stage (Series D) 2015 2016 2017 2018 2019
Privileged & Confidential 5Relationship Japan – India Startup hub
• Set up in Bengaluru as part of joint initiative signed on 1
• India is one of the largest recipient of Japanese official May 2018
development assistance loans • The start-up hub is an online platform to enable:
• Japan is the 3rd largest investor in Indian economy ➢ promotion of information exchange
• Between 2000 to 2019: cumulative FDI inflows from Japan ➢ business collaboration
to India amounts to $30.27 Bn ➢ investments between the startup ecosystems
• JETRO and NASSCOM are the nodal agencies responsible
for executing the startup hub
• For more information on the Japan – India Start-up Hub,
Trade between the two nations please visit the link.
Trade in FY 2018- Amount in Bn $
2019 Japan - India Fund of Funds
Imports from Japan 12.77 • Nippon India Digital Innovation AIF – Scheme 1, a fund of
Exports to Japan 4.88 funds (FoF) set up with a mandate to invest in 15-20 India
• Value of trade from Japan to India is growing at a rate of dedicated venture capital funds with investment portfolio of
4% approximately 300+ startups
• India’s imports recorded a growth of 102.7% in the last 12 • The ticket size of investment by FoF: $5-15 Mn
years • Focus sectors: technology start-ups in AI, IoT, ML, fintech,
• Key imports from Japan include electrical machinery, iron healthcare, education & consumer robotics
and steel, organic chemicals, etc. • As per recent reports, Yokogawa Electric Corporation has
agreed to invest in this FoF
Privileged & Confidential 6Details as of end of Japanese VC Investor Trends
Japanese VC Investments
2019
35 30
Active Japanese Investors in India 50+ 30
25 20
Indian Start-ups backed by 20
105+
Japanese Investors 15
Number of Unicorns invested by
12 10 5
Japanese Investors 5
Deals participated in by Japanese 0
136+ Upto $10 mn $11 mn - $ 100 mn Above $100 mn
investors
Investment Amount
Investment by Softbank in Indian
$10 Bn
Startups
Recent Trends Driving factors for Japanese Investments in
• 2015 to 2018: 2X surge in deal participation by Japanese India
investors • Young population
• Preferred funding stage: growth stage (Series A and Series • Rising income
B) • Fastest growing consumer market
• Preferred sector: enterprise tech • Increased foreign investors’ confidence
• Active Japanese investors: Softbank, Strive, Beenos, • Increasing growth stage ecosystem
Incubate Fund, SBI Holdings and individual investors like • Government support & initiatives
Hiro Mashita (M&S Partners)
Privileged & Confidential 7India’s position
• Fin-Tech adoption rate of 87%, higher than the global rate Components Details
of 64%
• 2nd highest funded sector after e-commerce Payments, lending, insurance and wealth
Segment
management
• 3rd largest Fin-Tech ecosystem globally
• Factors driving growth: widespread identity formalization, Alibaba, Berkshire Hathaway, SoftBank,
banking penetration, increase smartphone penetration, Investors Temasek Holdings, Visa, PayPal,
growing disposable income, key government initiatives MasterCard
such as UPI and Digital India and middle-class expansion PayTM, MobiKwik, PhonePe,
resulting in demand and growth Companies PolicyBazaar, LendingKart, Freecharge,
ETMoney, Mswipe
Segment Figures Major FinTech Hubs in India & Number
Fin-Tech software market as of July of Start-ups
$2.4 Bn
2020 Gurugram 116
Digital payments market in 2019 $65 Bn Hyderabad 125
At a CAGR of 20% till
Digital Payments market growth New Delhi 196
2023
FDI investment in financial sector Mumbai 428
$82 Bn
between April 2000 to March 2020
Bengaluru 432
Number of WealthTech startups as of
440+
July 2020 0 100 200 300 400 500
Privileged & Confidential 8Average VC deal size (Mn $) Recent Deals
80 70
50.1 Amount
60 41.8
Target Investors
(in Mn $)
40 10.3
10.8 15.7 9.7 Investors led by
20 8
ADJ Utility Apps Facebook co-founder
0 60
(Khatabook) Eduardo Saverin’s B
Lending Payment Wealth Insurance Capital Group
Management
Fullerton Financial
2018 2019 Holdings, Bertelsmann
LendingKart India Investments, 42
Sistema Asia Fund and
Number of Investments across different India Quotient
segments
Investors led by CapitalG,
50 43 Aye Finance the private equity arm of 27.7
40 Google parent Alphabet
30 23 21
20 15 12 BrokenTusk Investors led by
6 5 7 Technologies Lightspeed Venture 15
10
0 (Setu) Partners
Lending Payment Wealth Insurance
Management
• In Q1 FY20, Fin-Tech startups have attracted investments of
2018 2019
$330 Mn in comparison to China which has seen an
investment of $270 Mn
Privileged & Confidential 9India’s position Focus Areas
• One of the largest sectors in terms of revenue and
employment • Increase in accessibility to health care services
• Competitive advantage: large pool of well-trained medical • Improvement in quality of care
professionals and low cost • Use of cloud computing & IT solutions
• By FY 2022 • Enhancement of patient experience & continuous
➢ Healthcare industry expected to increase to $372 Bn engagement
➢ Hospital industry expected to grow 16-17% CAGR to • Convenience in managing day to day healthcare & wellness
reach $132.84 Bn needs
Key Statistics Details as of 2019 Investment in Health- Number of VC deals in
Number of Health-Tech startups 3000+ Tech (Bn $) Health-Tech
3.8
FDI inflows in hospitals and 3.62 100 90
diagnostics between April 2000 to $6.7 Bn 3.6
80 66
March 2020
3.4 60
Medical tourism market $7-8 Bn
3.2 3.11 40
Diagnostics industry $4 Bn
3 20
Primary care industry $13 Bn
0
Value of M&A in hospital sector in 2.8
$1.09 Bn 2018 2019
2019 2018 2019
Privileged & Confidential 10Components Details Recent Deals
• Investment in Q1 of calendar year 2020:
0.4Bn$
Hospitals, medical devices, telemedicine, Company Investor Amount (in
Components of
medical tourism, health insurance and Mn $)
healthcare sector
medical equipment
Mubadala
Investment, M12,
Innovaccer 70
WestBridge, Tiger
Global and others
Telemedicine, wearables & devices,
Health-Tech Religare
genomics, virtual reality, robotics and
segment Health Kedaara Capital 56
electronic medical records
Insurance
CureFit Temasek 114
JSW Ventures, the
PharmEasy, CureFit, Practo, MedLife &
Prominent startups HealthPlix venture capital arm of
CallHealth 6
Technologies Sajjan Jindal-led JSW
Group
Privileged & Confidential 11Details Figures Investment (Mn $) Number of VC
1000 deals
India has 2nd highest number 795
India’s position 30
of Edu-Tech companies 800 25
25 23
Test prep and online 600 19
20
Segments certification & skill
400 296 15
development
200 108 10
Between 2014-2019 Investment of $1.8 Bn 0 5
HI 2019 H2 H1 0
Online test preparation: $515 2019 2020 HI 2019 H2 2019 H1 2020
Mn (prominent players: Byju’s
and Unacademy)
Investments in Edu-Tech in 2019
Expected market size by Online certification & skill 4.80%
2021 development: $463 Mn
(prominent players: 16.10%
Simplilearn, GreyCampus, VCs
Whitechat Jr, Quizizz) 41.00%
Angel Investors
Corporates
Others
Number of unique EdTech
Startups which received 194+ 38.10%
funding in 2019
Privileged & Confidential 12India’s position
• India will be10th largest market for OTT media streaming in
Details Figures
terms of revenue by 2022.
• Mobile Internet subscribers set to double from 406 Mn in Number of OTT players as
35+
2017 to 805 Mn in 2022. of November 2019
• Factors driving growth: Increased focus on localized content
consumer content demand, lower internet prices, portability
Current online subscribers 53.1 Mn
preference
Expected market size by Grow at 21.8% CAGR to INR
FY 2023 11,976 bn
1000 OTT Revenue (Mn $)
823
800 716 Estimated online
500 Mn +
607 subscribers by FY 2023
600 484
390
400 297 Prominent International
Netflix, EROS Now, Amazon
OTT players
200
0 Prominent domestics OTT Zee5, Disney-Hotstar, Netflix
2017 2018 2019 2020 2021 2022 players and MX player
*2018 onwards is projected data
Privileged & Confidential 13Sector’s Future
Details Figures
• Projected Growth in Social Gaming revenue from 2017
to 2022 is $1988 Mn
2nd largest market worldwide •
India’s position Game Developing Firms in India have increased ten-fold
for app download
from 25 in 2010 to 250 in 2018
• Factors for growth: Continuous upgradation for bigger
Growth rate 22% CAGR and better experiences,, increased smart-phone
penetration, development of e-sports into legitimate
Value of online gaming competitions
$3,750 Mn
industry by 2024
Investment between 2014-
$350 Mn PE & VC Investments in Digital Gaming
2019
Sector (Mn $)
120 104.4
Number of online gaming
startups
400+ 100 80.6
80
Mobile gaming, constituting 60
Largest Section
85% of online gaming 40
20 1.8 5.5
Games2Win, WinZo Games, 0
Emerging platforms
Hitwicket, Gamerji and Rummy 2013 2015 2017 2018
Privileged & Confidential 14India’s position
Details Figures
• India is home to more than 450 AgriTech startups.
• Agritech startups growing at a rate of 25% year-on-year. Total funding until $248 Mn, increased by 350%
• Close to 100 Mn small and independent farmers June 2019 from 2018
• Factors driving growth: Increasing smart-phone penetration,
easing of regulations, increasing organization of farmers FDI inflow between
2000-2019
$ 9.98 Bn
(agriculture and allied
industries)
Indian Agriculture Industry (Bn $)
1400 Number of AgriTech
1190 startups
450+
1200 1070
951
1000 846
753 Ninjacart, Agrostar, Stellops,
800 676 Prominent players
601 Cropin, and Jumbotail
600
400
Omnivore, Accel and Ankur
200 Prominent investors
Capital
0
2017 2018 2019 2020 2021 2022 2023 Supply chain & digital
*2020 onwards is projected data Market opportunities agriculture and production &
financing
Privileged & Confidential 15SOURCES
• www.investindia.gov.in
• www.ibef.org
• www.ivca.in
• www.inc42.com
• www.mergermarket.com
• www.ventureintelligence.com
• www.vccircle.com
• www.techcircle.in
• India Venture Capital Report 2020: Bain & Company
Privileged & Confidential 16If you need any further information or clarification relating to information and data presented in this note or if
you need an in-depth analysis or understanding of any of the sectors or segments as set out in this note,
please feel free to contact:
MR. DENI SHAH : deni.shah@acuityconsulting.co.in
MR. YUTO HARA : y.hara@acuityconsulting.co.in
Privileged & Confidential 17Our HQ co-ordinates: Mumbai Office 506, Marathon Icon, Off Ganpatrao Kadam Marg, Lower Parel (W), Mumbai – 400 013 +91 22 6666 7001 ALC@acuityconsulting.co.in
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