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Indian tech startups raised a record $14.5B in 2019

By Manish Singh

Indian tech startups have never had it so good.

Local tech startups in the nation raised $14.5 billion in 2019, beating their previous best of $10.6 billion last year, according to research firm Tracxn .

Tech startups in India this year participated in 1,185 financing rounds — 459 of those were Series A or later rounds — from 817 investors.

Early-stage startups — those participating in angel or pre-Series A financing round — raised $6.9 billion this year, easily surpassing last year’s $3.3 billion figure, according to a report by venture debt firm InnoVen Capital.

According to InnoVen’s report, early-stage startups that have typically struggled to attract investors saw a 22% year-over-year increase in the number of financing deals they took part in this year. Cumulatively, at $2.6 million, their valuation also increased by 15% from last year.

Overall, there were 81 financing deals of size between $25 million and $100 million, up from 56 last year and 36 the year before, and 27 rounds above $100 million, up from 17 in 2018 and and nine in 2017, Tracxn told TechCrunch.

Also in 2019, 128 startups in India got acquired, four got publicly listed and nine became unicorns. This year, Indian tech startups also attracted a record number of international investors, according to Tracxn.

This year’s fundraise further moves the nation’s burgeoning startup space on a path of steady growth.

Since 2016, when tech startups accumulated just $4.3 billion — down from $7.9 billion the year before — flow of capital has increased significantly in the ecosystem. In 2017, Indian startups raised $10.4 billion, per Tracxn.

“The decade has seen an impressive 25x growth from a tiny $550 million in 2010 to $14.5 billion in 2019 in terms of the total funding raised by the startups,” said Tracxn.

What’s equally promising about Indian startups is the challenges they are beginning to tackle today, said Dev Khare, a partner at VC fund Lightspeed Venture Partners, in a recent interview with TechCrunch.

In 2014 and 2015, startups were largely focused on building e-commerce solutions and replicating ideas that worked in Western markets. But today, they are tackling a wide-range of categories and opportunities and building some solutions that have not been attempted in any other market, he said.

Tracxn’s analysis found that lodging startups raised about $1.7 billion this year — thanks to Oyo alone bagging $1.5 billion, followed by logistics startups such as Elastic Run, Delhivery and Ecom Express that secured $641 million.

Also, 176 horizontal marketplaces, more than 150 education learning apps, over 160 fintech startups, over 120 trucking marketplaces, 82 ride-hailing services, 42 insurance platforms, 33 used car listing providers and 13 startups that are helping businesses and individuals access working capital secured funding this year. Fintech startups alone raised $3.2 billion this year, more than startups operating in any other category, said Tracxn.

The investors

Sequoia Capital, with more than 50 investments — or co-investments — was the most active venture capital fund for Indian tech startups this year. (Rajan Anandan, former executive in charge of Google’s business in India and Southeast Asia, joined Sequoia Capital India as a managing director in April.) Accel, Tiger Global Management, Blume Ventures and Chiratae Ventures were the other top four VCs.

Steadview Capital, with nine investments in startups, including ride-hailing service Ola, education app Unacademy and fintech startup BharatPe, led the way among private equity funds. General Atlantic, which invested in NoBroker and recently turned profitable edtech startup Byju’s, invested in four startups. FMO, Sabre Partners India and CDC Group each invested in three startups.

Venture Catalysts, with more than 40 investments, including in HomeCapital and Blowhorn, was the top accelerator or incubator in India this year. Y Combinator, with over 25 investments, Sequoia Capital’s Surge, Axilor Ventures and Techstars were also very active this year.

Indian tech startups also attracted a number of direct investments from top corporates and banks this year. Goldman Sachs, which earlier this month invested in fintech startup ZestMoney, overall made eight investments this year. Among others, Facebook made its first investment in an Indian startup — social-commerce firm Meesho — and Twitter led a $100 million financing round in local social networking app ShareChat.

Max Q: SpaceX starts building out its production Starlink constellation

By Darrell Etherington

There’s literally a lot more stuff in space than there was last week – or at least, the number of active human-made satellites in Earth’s orbit has gone up quite a bit, thanks to the launch of SpaceX’s first 60 production Starlink satellites. This week also saw movement in other key areas of commercial space, and some continued activity in early-stage space startup ecosystem encouragement.

Some of the ‘New Space’ companies are flexing the advantages that are helping them shake up an industry typically reserved for just a few deep-pocketed defence contractors, and NASA is getting ready for planetary space exploration in more ways than one.

1. SpaceX launches 60 Starlink satellites

The 60 Starlink satellites that SpaceX launched this week are the first that aren’t specifically designated as tester vehicles, even though it launched a batch of 60 earlier this year, too. These ones will form the cornerstone of between 300-400 or so that will provide the first commercial service to customers in the U.S. and Canada next year, if everything goes to SpaceX’s plan for its new global broadband service.

Aside from being the building blocks for the company’s first direct-to-consumer product, this launch was also an opportunity for SpaceX to show just how far its come with reusability. It flew the company’s first recovered rocket fairing, for instance, and also used a Falcon 9 booster for the fourth time – and landed it, so that it can potentially use it on yet another mission in the future.

2. Rocket Lab’s new room-sized robot can don in 12-hours what used to take ‘hundreds’

Rocket Lab is aiming to providing increasingly high-frequency launch capabilities, and the company has a new robot to help it achieve very quick turnaround on rocket production: Rosie. Rosie the Robot can produce a launch vehicle about once every 12 hours – handling the key task of processing the company’s Electron carbon composite stages in a way that cuts what used to take hundreds of manual work hours into something that can be done twice a day.

3. SpaceX completes Crew Dragon static fire test

This is big because the last time SpaceX fired up the Crew Dragon’s crucial SuperDraco thrust system, it exploded and took the capsule with it. Now, the crew spacecraft can move on to the next step of demonstrating an in-flight abort (the emergency ‘cancel’ procedure that will let astronauts on board get out with their lives in the case of a post-launch, mid-flight emergency) and then it’s on to crewed tests.

4. Virgin Galactic’s first paying customers are doing their astronaut training

It’s not like they’ll have to get out and fix something in zero gravity or anything, but the rich few who have paid Virgin Galactic $250,000 per seat for a trip to space will still need to train before they go up. They’ve now begun doing just that, as Virgin looks to the first half of next year for its first commercial space tourism flights.

5. TechStars launches another space tech accelerator

They have a couple now, and this new one is done in partnership with the U.S. Air Force, along with allied government agencies in The Netherlands and Norway. This one doesn’t require that participants relocated to a central hub for the duration of the program, which should mean more global appeal.

6. NASA funds new Stingray-inspired biomimetic spacecraft

Bespin’s cloud cars were cool, but a more realistic way to navigate the upper atmosphere of a gaseous planet might actually be with robotic stingrays that really flap their ‘fins.’ Yes, actually.

7. Blue Origin’s lunar lander partner Draper talks blending old and new space companies

Blue Origin’s Jeff Bezos announced a multi-partner team that will work on the company’s lunar lander, and its orbital delivery mechanism. A key ingredient there is longtime space industry experts Draper, which was born out of MIT and which is perhaps most famous for having developed the Apollo 11 guidance system. Draper will be developing the avionics and guidance systems for Blue Origin’s lunar lander, too, and Mike Butcher caught up with Draper CEO Ken Gabriel to discuss. (Extra Crunch subscription required)

Techstars launches a virtual space tech accelerator with USAF, the Netherlands and Norway

By Darrell Etherington

Techstars is following up the first class of their Starburst space-focused program with a new, virtual accelerator program that is being run in partnership with the U.S. Air Force, the Netherlands Ministry of Defence, the Norwegian Ministry of Defence and the Norwegian Space Agency. It’s called the Techstars Allied Space Accelerator, and its focus is specifically on startups operating in the commercial space industry.

Unlike most other Techstars programs, this one won’t require companies to work out of a centralized physical hub during the course of the program, which will span 13-weeks. It’ll be mostly remote, punctuated by three separate one-week visits on-site at the program’s government agency sponsors, which will supplement the virtual mentorship and guidance.

Techstars already has experience working with the U.S. Air Force, through the Techstars Air Force Accelerator, but this new program will give it a chance to work together both with the entrepreneurial organization, and also with some of its international partners. This kind of collaboration with industry could help pave the way to establishing more clear and widely accepted rules of the road when it comes to how the commercial space industry operates relative to national borders and international cooperation.

This inaugural program will run from June through September of 2020, and it’s open for applications as of today, with the cut-off for accepting new potential participants on March 3, 2020.

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