New internet startups in India are tumbling, pointing to the possibility of an overall decline in entrepreneurship, DealStreetAsia reported on Sunday (Oct. 6).
Although Indian startup funding has increased and the number of unicorns has tripled, the numbers are misleading.
Startup deals in India decreased in 2017 and 2018 compared to previous years, the news outlet reported, citing the data analytics firm Tracxn Technologies. Deals are also down in 2019.
The Tracxn data indicates that there were under 1,000 new startups in 2017 compared to more than 6,000 in 2016.
By way of example, the news outlet points to the video content platform Clip launched in early 2018. It was considered one of the most “promising startups in the sunrise sector: social media or content,” the article said.
Clip received $7 million in seed funding led by Shunwei Capital, Matrix Partners and India Quotient. The startup was turned down by everyone, however, when it looked for another funding infusion of $25-30 million. It was sold in a distress deal to ShareChat (Mohalla).
Clip and other new content startups lost out to Chinese content firms ByteDance and Kwai.
Funding activity in India headed into the end of August showed that eCommerce startups focused on home delivery gained traction, as measured by funding rounds.
As tracked by PYMNTS, total funding activity along sectors as far-flung as logistics, eCommerce, alternative finance and payments tech stood at roughly $2.3 billion USD. Breaking that down a bit, logistics stood at just over 47 percent of the total, at a bit more than $1 billion, and eCommerce stands at $259 million.
Getting a bit more granular in eCommerce, and amid recent deals, in one case, FreshToHome, a firm based in Bangalore that focuses on selling food — spanning fresh vegetables, fish, chicken and other items — grabbed $20 million in a Series B funding round.
The investment was led by Iron Pillar, with, as TechCrunch noted, additional participation from Joe Hirao, the founder of Japan’s ZIGExn. The Series B comes relatively soon after a Series A financing round was announced three months ago. The total raised to date comes in at $33 million.