The Startup Ecosystem in India: Q1 Trends


The year 2018 was eventful for the startup scene, not because it was bullish but because the year showed us that the Indian startup ecosystem is heading towards maturity. Several deals were closed, a good number of players moved from the early-stage to the growth-stage, some Indian players joined the unicorn club and the number of serial entrepreneurs grew.

The internet penetrated into the heartlands of the country in 2018 with cheaper data and was expected to reach deeper in 2019. This meant, in 2019, startups can reach consumers beyond the metropolitans and explore the multitude of opportunities that are available in the vast expanse of the country. We started 2019 with great hope and optimism that the startup ecosystem will grow from strength to strength.

We are well past the first quarter now. Let us see how the report card of the Indian startup ecosystem in Q1 2019 fared.


Nature of investments received

Q1 2019 was buzzing with activity with a good number of deals being closed, the size of the deals was bigger and the inflow of investment grew. Let us explore what kind of enterprises/ startups were funded in the 1st quarter.

Nature of enterprises that received investments

  • Growth-stage and late-stage startups were the ones that took a major chunk of the investments in Q1 2019.

  • India’s indigenous ride-hailing major that is redefining mobility in the country, Ola, raised $502 million across 5 rounds from investors including Hyundai and Kia.
  • Delhivery, a supply-chain services company that is focussed on creating a cost-effective and technology-driven operating system for commerce in India, raised $413 million in a round led by Softbank.
  • Big Basket, the hyperlocal grocery delivery major, raised $150 million from South Korea’s Mirae Asset, Alibaba and CDC group among others.
  • The budget hospitality player, OYO, raised $100 million from Chinese ride-hailing giant, Didi Chuxing.
  • CarDekho, an online car search platform, raised $110 million from existing investors – Sequoia India, Capital G, Axis Bank and Hillhouse Capital.
  • The number of early-stage deals was relatively lower in Q1. However, with investors like Soft Bank and Sequoia and companies like Flipkart launching early-stage startup-focussed initiatives, the level of investment is expected to pick up in the coming quarters.
  • Women-led startups saw a not-so-encouraging Q1 2019 as far as investments are concerned. The quantum of investment was better for startups with women co-founders.
  • Bengaluru and Delhi-NCR were the regions that attracted the maximum number of deals and quantum of investments in Q1 2019.
  • Jaipur had 3 deals. However, it is noteworthy that ventures from cities like Raipur, Thiruvananthapuram, Indore, Bhubaneshwar, Jodhpur and Patna received 1 deal each in Q1 2019 and these cities featured on the funding map.

Most active angels and VCs

  • The most active VCs in the 1st quarter of 2019 were Sequoia, Blume Ventures, Matrix Partners and Accel Partners India.
  • The most active angel investors in the 1st quarter of 2019 were Binny Bansal, Sharan Agarwal, VC Karthic and Sachin Tagra.

Domains that are ruling in the startup space

Let us now take a look at the domains and industries that are ruling the startup space in 2019.

  • Fintech and financial services startups and enterprises have been ruling the roost in the 1st quarter of the year.
  • Logistics and transportation related tech startups have also been investor favourites in the 1st quarter. They are also growing in strength and reach in their operations too.
  • FoodTech, EdTech and E-commerce saw a decline in the number of deals in Q1 2019 as compared to 2018 where they were among the biggest gainers. However, the deals closed in Q1 2019 were sizable.
  • Byju’s, an EdTech company that aims to make learning fun and effective, raised mammoth funding in Q1 2019.
  • FirstCry (online store for kids’ and baby products), Truebil (used car marketplace), Zetwerk (B2B technology platform that manufactures custom products on demand) and Clovia (online women’s innerwear brand) were the highest funded e-commerce players.
  • Zomato raised sizeable funding in the FoodTech space in Q1 2019.
  • E-commerce has unicorns and players who are strongly moving ahead, but the volume of investments is not increasing at the bullish rate that it has been in the past years.


  • India saw 2 new players joining the coveted unicorn club – Delhivery and Big Basket.
  • Some of the existing unicorns also raised over $100 million in Q1 2019.

Looking Ahead: What to expect in the coming quarters

  • AgriTech, social commerce and healthcare are areas that will see more players in the coming quarters. It will be interesting to see which unique innovations sustain and grow in these domains.
  • Globally, AI-ML, automation, data analytics, the blockchain, IoT, VR-AR platforms and apps, etc. related startups and ventures are seeing a surge in the number of players, unique solutions and quantum of investments. India too is expected to see an upsurge in these industries.
  • More startups will emerge from Tier II and Tier III cities and grow from strength to strength.
  • The startup ventures will also concentrate their efforts more on these Tier II and Tier III cities to expand their reach, customer base and profitability.
  • With faster internet and cheaper data percolating to remote regions and diverse population groups, the online content consumption (textual, audio and video) is expected to shoot up immensely. Startups are already capitalizing on the content creators and influencers for their marketing efforts. This trend is expected to continue. Also, the content creation businesses (YouTubers, collectives, etc.) may also see a growth in investments. PopXo and BuzzFeed are great examples. More such players are expected to enter the funding race.
  • We should also expect some of the startups to go public and enter the IPO bandwagon.

In conclusion, the Indian startup ecosystem has seen several positive developments in Q1 2019, despite a few setbacks. We are sure these setbacks will be remediated in the coming quarters and we will finish 2019 on a high note.

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