Despite the third wave of COVID-19 pandemic looming large and slow economic recovery, venture capital (VC) investors seem to be reposing faith in the Indian startup ecosystem. In fact, Indian startups stood next only to Chinese counterparts in terms of VC funding value among the Asia-Pacific (APAC) countries during January to July 2021, reveals GlobalData, a leading data and analytics company.

An analysis of GlobalData’s Financial Deals Database reveals that a total of 828 VC funding deals were announced in India during January-July 2021 while the total disclosed funding value of these deals stood at US$16.9bn.

Aurojyoti Bose, Lead Analyst at GlobalData, comments: “While some of the top key markets globally witnessed decline in VC funding value in July compared to the previous month, India managed to showcase growth despite a decline in VC funding deal volume. Rising smartphone penetration and affordable mobile Internet have transformed India into a digital-first economy. As a result, tech startups are the biggest beneficiaries of this trend.

“According to GlobalData’s research, India has the third-largest tech unicorn ecosystem in the world, behind the US and China. During the COVID-19 pandemic, VC investors are evincing interest in startups across themes such as e-commerce, social media and social networking, food delivery, edtech, and digital payments.”

Some of the notable VC funding deals announced in India during January-July 2021 include US$3.6bn raised by Flipkart, US$502m raised by Mohalla Tech (ShareChat), Zomato’s capital raising of around US$500m, and US$460m raised by Think and Learn (Byju’s).

Mr Bose concludes: “India remains one of the key APAC markets in terms of VC funding activity and is the second top market for VC investments in the region after China. With progress in vaccination in the country, VC investors are seen committing big-ticket investments.”