Startups mop up $7 billion from PEs and VCs in 2018
New Delhi: E-commerce and consumer internet companies have raised over $7 billion in private equity and venture capital funding in 2018, says AN EY report. The report titled 'E-commerce and Consumer Internet Sector India Trendbook 2019' launched at the IVCA Conclave 2019, noted that majority of the funding was towards building supply chain, expanding into new segments, acquisition/consolidation, and bringing innovative product offerings.
Of all companies, startups like OYO, Swiggy, Byjus, PayTm Mall, Pine Labs, Zomato, Udaan, PolicyBazaar and CureFit have collectively raised the lion's share around $4.6 billion in 2018 of the total investments into this segment. Deals that stood out include Walmart's acquisition of Flipkart at $16 billion, Alibaba's investment in BigBasket and PayTm, Tencent's investment in Dream11, and Naspers investment in Byjus and Swiggy.
"The Indian e-commerce and consumer internet sector has seen significant inflow of capital in 2018, making India one of the most exciting destinations to invest in across the globe," said Ankur Pahwa, Partner and National Leader E-Commerce and Consumer Internet, EY India.
According to the report, consolidation will continue in 2019 as companies will need to add more services and segments to expand the level of engagement with customers and leverage emerging technologies including artificial intelligence (AI), blockchain, Internet of Things (IoT) to service the market better.
"The exits recorded by the investors in 2018, showcase the trust placed by the PE/VC community in the Indian startup ecosystem. These exits are just not limited to consolidation within the market players, but include investments by large global organisations, which clearly paves the way for the next level of growth for the Indian startup ecosystem," states Vivek Soni, Partner and Leader Private Equity Services, EY India. The uptrend in e-commerce funding was driven by rising digital transactions, digital literacy, vernacular content grwoth, low mobile data tariffs and stimulus provided by Digital India programme and also programmes such as Start Up India and Make in India, Pahwa said.