Indian Tech Startup ANNUAL REPORT

2018 Report Funding Indian Tech Startup ANNUAL REPORT

Note from the Analyst

Ankan Das Head | DataLabs | Inc42

The last year — 2018 — was a milestone year for the Indian startup ecosystem. While the irrational exuberance of 2015 and 2016 — which led to the valuation bubble in the ecosystem — seems to have waned, there is a clear funding gap that was observed last year.

According to Inc42 DataLabs, Indian startups received $11 Bn in funding through 743 deals in 2018, with an overall decline in both deals and funding as compared to 2017. Further, 48% of the total funding was lapped up by just 1.4% of the startups that raised funding — a trend Beyond these challenges, there lies an immense observed in 2017 as well, when 52% of the funding was opportunity for the right business idea backed by smart raked in by just 1% of the startups. execution. However, such hurdles are leading to an outflow of businesses to other countries with favourable Clearly, over the last 2 years, Indian startup funding seems business infrastructure. Nineteen out of 26 unicorns in to have been led by a handful of unicorns and soonicorns. India have entities in foreign countries, primarily because Add to this the dip in investor participation in funding of the ease of funding, regulation, and taxation norms in (angel participation fell by 30% and VC by 10% as those countries. compared to 2017) and a 40% drop in seed deals, both clear indicators of a funding crunch. The startup sector now finds itself on the precipice of a new era. New technologies such as blockchain, GAN, 3D Although the Indian startup ecosystem churned out 11 printing, deep tech, etc, have magnified the scope for more unicorns in 2018, the percentage of unicorns in innovative business models to address real and present India is nowhere close to that of the US or the UK. Indian problems. This makes entrepreneurship and startups more sustainable on their home ground, but the Understandably, startups in India have to deal with lack of clear-cut, supportive policies and infrastructure is challenges their contemporaries in other countries are not holding back the ecosystem’s potential and leading to the faced with. For instance, comprehending the sheer size startup exodus as observed in 2018. of the country and its cultural diversity, the lack of a skilled talent pool, the angel tax dilemma, an uncertain In this edition of the Indian Tech Startup Funding Report ecommerce policy, the data surveillance order, etc. Some 2018, we take a look at the landscape of funding in the of these factors have made investors wary of investing in startup sector in 2018 and address the whys of the fall of the startup ecosystem, leading to the fall of FDI inflow. key funding metrics of the Indian startup ecosystem.

Table of Contents

Scope Of The Report 1 Executive Summary 2 Introduction To The Report 5 Indian Tech Startup Funding Overview 7 Stagewise Analysis 10 Business Model Breakdown 19 Sectorwise Analysis 25 Demographic Breakdown 64 Investor Participation In Funding 86 The Game Of Consolidations 98 Top 5 Technologies To Look Out For In 2019 99 India & The Other Startup Ecosystems 107 Indian Startup Ecosystem & Impact 115 Startups & Jobs Impact 122 Roadblocks 126 Predictions For 2019 130 Methodology 133 Bibliography 135

Scope Of The Report

Funding is an integral part of any startup ecosystem. The Apart from funding trends and patterns, the report offers a rise of fall of funding has a significant role in shaping and detailed analysis of the shift in startup business models, the helping evaluate a startup ecosystem. For the Indian startup performance of the top sectors, and the emergence of new ecosystem, 2018 was a year of late- and growth-stage technologies in the year gone by. Apart from sectors, we funding. The ecosystem witnessed some of its biggest have also talked about the leading startup hubs in the investments, along with the entry and exit of numerous country, with Hyderabad and Pune being the new, emerging players. However, there was a decline in the number of ones. The impact of new, state-specific startup policies on deals and the amount of funding as compared to 2017. Last the future of their respective startup ecosystems has also year, we witnessed a steep rise in seed and bridge funding been analysed. amounts, which is reflective of the rising interest of investors in young startups and the opportunities they are creating. The Indian startup ecosystem’s efforts to carve out a leading position among the top economies of the world and The aim of this report is to provide readers with an in-depth to compete with other emerging startup nations merits a analysis of the changes in the funding scenario in the Indian comparison on an international scale. Hence, in this report, startup ecosystem in 2018 as compared to the past four we have compared the Indian startup ecosystem with its years. It provides a trend analysis of funding by stages over counterparts. the past five years. The report also delves into how investor interests are changing and why M&A is the new game in the Overall, the report showcases the milestones achieved by ecosystem. the Indian startup ecosystem in 2018 along with the roadblocks and predictions for 2019.

1 © Inc42 Media | not for distribution Executive Summary

$11 Bn was raised across 743 deals 25% of the total funding in startups in 2018 since 2014 was made in 2018

Bengaluru secured the top slot with Late-stage funding increased by 247 deals and $4.75 Bn in total 18% in comparison to 2017 funding 40% drop in seed stage funding was The number of deals and investment reported in comparison to 2017 in 2018 plunge by 20% and 16% respectively compared to 2017 A total of $2.4 Bn was raised across 232 deals in growth stage 11 Indian startups entered the unicorn club in 2018 In late stage, $8 Bn was raised across 106 deals Accel partners with 28 deals emerged as the most active VC of Enterprisetech and fintech witnessed 2018 followed by Sequoia Capital the maximum number of M&As with (24) and Blume Ventures (18) 30 deals and 18 deals respectively

© Inc42 Media | not for distribution 2 The hybrid business model, For healthtech segment, total B2B-B2C emerged as the most investment surged by 45.06 % from favourable model in 2018 $0.34 Bn in 2017 to $0.50 Bn in 2018, however, the number of deals Fintech startups secured $1.4 Bn, decreased by 40.51% making it the top funded sector of 2018 Investment amount in deeptech surged by 20.68% from $ 120 Mn in Edtech sector witnessed 85.29% 2017 to $ 150 Mn in 2018 increase in funding in comparison to 2017

Ecommerce investments fell by 41.37% in 2018

Investment in consumer services startups surge by 324.14% in 2018

3 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 4 Introduction To The Report

Unicorns were the flavour of the year in passing — 2018. India witnessed the entry of 11 startups into the much-celebrated Unicorn club. While it may not have been the best year in terms of the number of deals or funding compared to the previous year (2017), it marked several milestones, including the biggest acquisition in India’s startup history — Flipkart’s takeover by Walmart — new policies, and the entry of some of the biggest international players into the country.

Startups such as Swiggy, OYO, and Paytm Mall, among others, achieved the coveted unicorn tag last year. And the deal that created the most buzz in India as well as abroad was Walmart’s acquisition of a whopping 77% stake in India’s largest ecommerce company — Flipkart — for $16 Bn.

In 2018, a total of $11 Bn was invested in the Indian startup ecosystem. Giants such as Berkshire Hathaway and Walmart made their entry into the country by investing in Paytm and Flipkart respectively. Accel Partners India, Sequoia Capital India, and Blume Ventures remained the most active investors. Foodtech was on fire with the two biggest food delivery platforms — Zomato and Swiggy — crossing the $1 Bn mark last year. The duo raised massive rounds, made acquisitions, and introduced new services to strengthen their presence in the market. Meanwhile, home-grown cab aggregator Ola and hospitality chain OYO, armed with multi-million-dollar funding cheques, fuelled their international expansion.

While ecommerce, fintech, and consumer services emerged as the top funded sectors of 2018, there were some startups that surpassed experts’ expectations. One such startup that left everyone surprised with its superlative growth is B2B ecommerce platform Udaan, which raised a total of $275 Mn in 2018, taking its valuation to $1 Bn and earning it the epithet of the fastest startup to enter the unicorn club in India (it was 26 months old when it achieved the feat).

Coming to funding, the year wasn’t a great one for the Indian startup ecosystem — the number of deals declined by 21% and the total funding amount decreased by 16%. Even M&A deals reported a 3% fall in comparison to 2017.

5 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 6 Overview

743 $11Bn Total Deals Total Amount 637 125 Unique Startups Funded Total M&As 416 283 Unique Angels Unique VCs

Fintech Bengaluru Sector With Maximum Deals Hub With Maximum Deals

7 © Inc42 Media | not for distribution YoY Trend : Funding & Deals

S FUNDING AMOUNT DEALS

14 1400 ILLIO N B 12 1200 N

I Flipkart 10 Paytm Swiggy 1000 Ola OYO 8 PhonePe ReNew Power 800 BYJU’S 6 Flipkart 600 Paytm Mall 4 Zomato 400 Amazon India 2 Udaan 200

0 0 2014 2015 2016 2017 2018

In 2018, Indian startups received a total funding of $11 Bn across 743 deals, with over 637 startups raising funding. While in 2017, 4 startups took away half the funding i.e. $6.9 Bn, in 2018, we saw 9 startups notch $5.4 Bn of the total $11 Bn.

A look at the graph without the outliers shows that 2018 has been the worse performing year in the last three years (2015-2018) barring 2016, both in terms of total funding amount and the number of deals reported in the Indian startup ecosystem.

YoY Trend : Funding & Deals ( w/o Outliers )

S FUNDING AMOUNT DEALS

7 1400 ILLIO N B 6 1200 N I 5 1000

4 800

3 600

2 400

1 200

0 0 2014 2015 2016 2017 2018

On the M&A side, there was hardly any change — the Indian startup ecosystem observed 125 M&A deals in 2018, 5 less than 2017.

Since 2014, Indian tech startups have raised more than $44 Bn across 3,968 deals. Interestingly, 25% of the total funding was raised in 2018. If the 2017 and 2018 figures are combined, 52% of the total funding between 2014- 2018 was raised in these two years.

Surprisingly, once we remove the outliers, the trend of average ticket size shows a growth of 6% in 2018 as compared to 2017. However, it was much better in 2017 when the ticket size grew by 21% in comparison to 2016. Overview

Average Ticket Size Trend S AVERAGE TICKET SIZE AVERAGE TICKET SIZE (W/O OUTLIERS)

25 ILLIO N M

N 20 I

0 2014 2015 2016 2017 2018

9 © Inc42 Media | not for distribution Stagewise Analysis

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

2018

2017

2016

2015

2014 0 % 10 20 30 40 50 60 70 80 90 100 %

YoY Trend : Funding In Stages

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

2018

2017

2016

2015

2014 0 % 10 20 30 40 50 60 70 80 90 100 %

The year 2018 observed a significant drop — 40% in comparison to 2017 — in funding deals in the early stage. From 551 in 2017, the number of deals in the early stage came down to 331 in 2018.

Growth-stage deals remained almost the same while late-stage deals registered an 18% growth as compared to 2017.

For the bridge funding stage, a surge of 51% from $45.6 Mn in 2017 to $69 Mn in 2018 was witnessed. However, there was no significant change in the number of deals which increased slightly from 68 deals in 2017 to 74 deals in 2018.

11 © Inc42 Media | not for distribution Early-Stage Funding

The number of deals in early-stage startup funding took a hit in 2018. From 551 in 2017, the number of 331 $421Mn seed-stage deals came down to 331 in 2018 — a 40% decline. Looking at the ratio of seed deals Total Deals Total Amount (among all the deals) it’s evident that there has been a decline since 2016. This is consistent with the loss of investor confidence in the “spray and pray” approach when it comes to funding early-stage startups.

However, while the number of deals came down, the total amount invested in early-stage startups went 296 101 up by 138%. This clearly suggests that investors are still confident about investing in upcoming startups Unique Angels Unique VCs and are looking to hand out bigger cheques.

Seed Deal Ratio Seed Funding Ratio

70% 4.5%

4.0% 60% 3.5% 50% 3.0%

40% 2.5%

2.0% 30% 1.5% 20% 1.0%

10% 0.5%

0% 0% 2014 2015 2016 2018 2014 2015 2016 2017 2018 2017

2014 2015 2016 201 2018 Mn Max

2 Mn Mn 3 $1080K Mn 2 Mn

3 $782K 3 $750K 3 $766K 3 $726K

Median $496K

Median $389K Median $360K Median $376K

Median $224K 1 $240K

1 $160K 1 $148K 1 $147K 1 $153K

Min 4

The mean value of funding for 2018 YoY Trend : Seed Funding & Deals seems quite high because a handful of big-ticket seed funding deals — 4 deals garnered more than $30 Mn S FUNDING AMOUNT DEALS funding, which is the mean value. However, a look at the median gives us a better understanding of the 0.18 180 scenario. Median seed funding 0.16 160

showed a growth of 28% in 2018 as N B ILLIO compared to 2017. This suggests I 0.14 140 an overall increase in ticket size for 0.12 120 seed funding in 2018. 0.1 100 The trend line clearly suggests a 0.08 80 gradual fall in both the number of deals and the amount of funding. 0.06 60 This trend is an indication of a 0.04 40 funding crunch that can be expected in 2019 for the early stage. 0.02 20 0 0

2018 Q1 Q2 Q3 Q4

13 © Inc42 Media | not for distribution Growth-Stage Funding

In 2018, the number of deals — 232 — and the total funding amount — $2.4 Bn — in 232 $2.4 Bn the growth stage remained almost the same as in 2017. This was just a 2% rise in deals Total Deals Total Amount and a 5% decrease in the amount as compared to 2017.

If we look at the ratio of deals in the growth stage (in comparison to all the stages), it shows a steady growth since 2016. However, the ratio of total funding in the growth stage, 70 155 which has been declining since 2016, Unique Angels Unique VCs showed signs of recovery in 2018.

Growth Stage Deal Ratio Growth Stage Funding Ratio

35% 35%

30% 30%

25% 25%

20% 20%

15% 15%

10% 10%

5% 5%

0% 0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018

2014 2015 2016 201 2018 Mn Max Mn

Mn 4 Mn Mn

3 $16 Mn 3 $15.5 Mn

3 $14.2 Mn

3 $13 Mn 3 $12 Mn

Median $7.7 Mn

Median $5.9 Mn Median $6 Mn Median $5.1 Mn Median $4.8 Mn

1 $3 Mn 1 $2.4 Mn 1 $2.5 Mn 1 $2.2 Mn 1 $1.8 Mn

Min 2

If we look at the trend of the median YoY Trend : Growth Stage Funding of funding in the growth stage, it has increased significantly since & Deals 2016, suggesting more growth- stage startups are raising funds with S FUNDING AMOUNT DEALS bigger ticket sizes. However, the fall in the mean of growth stage funding 0.9 90 in 2018 suggests a decline in overall funding. 0.8 80 N B ILLIO

I 0.7 70 The quarterly trend in 2018 also shows a gradual rise in funding over 0.6 60 the quarters. 0.5 50 0.4 40 0.3 30 0.2 20 0.1 10 0 0

2018 Q1 Q2 Q3 Q4

15 © Inc42 Media | not for distribution Late-Stage Funding

In 2018, late-stage deals stood at 106 with a total funding of $8 106 $8 Bn Bn. While the number of deals rose by 18%, there was a drop Total Deals Total Amount of 21% in the total funding amount.

The deal ratio continued to rise in 2018, seeing a 48% increase. However, the overall decline in funding brought down the ratio 18 96 of funding in the late stage from 79% in 2017 to 74% in 2018. Unique Angels Unique VCs

Late Stage Deal Ratio Late Stage Funding Ratio

90%

80%

70%

60%

50%

40%

30%

20%

10%

0% 2014 2015 2016 2017 2018

2014 2015 2016 201 2018 Mn Max Mn Mn

3 $103 Mn 3 $100 Mn

3 $90 Mn

3 $75 Mn 3 $72 Mn

Median $39.2 Mn $32 Mn Median $31 Mn Median Median $24.7 Mn Median $23 Mn

1 $15 Mn $14.2 Mn $13.7 Mn 1 $11.7 Mn 1 1 1 $9.8 Mn

Mn Mn Mn

4 Min 2

In the 5-point summary graph, we can see that both the mean and YoY Trend : Late Stage Funding & Deals median came down for late-stage funding in 2018 by 26% and 23%, S FUNDING AMOUNT DEALS respectively. This is not a good sign, as it suggests that the average 4 40 ticket size decreased. 3.5 35

The quarterly trend shows a gradual N B ILLIO I increase in both deals and funding 3 30 except for the sudden drop in the 2.5 25 last quarter of 2018. 2 20

1.5 15

1 10

0.5 5

0 0

2018 Q1 Q2 Q3 Q4

17 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 18 Business Model Breakdown

19 © Inc42 Media | not for distribution Business Model - Deals

B2B B2B - B2C B2C

2018

2017

2016

2015

2014 0 % 10 20 30 40 50 60 70 80 90 100 %

In the context of business models, the B2B- B2C hybrid model was undoubtedly the most preferred one in 2018. The B2B-B2C model had the highest percentage share (41.1%) in the total number of deals. Also, B2B-B2C bagged 52.68% of the total amount invested in 2018.

However, the total investment in this model in 2018 — $5.7 Bn — fell 27.46% as compared with the previous year — $7.9 Bn.

In contrast to this, investments in the B2C model witnessed a moderate surge of 3.7% in 2018 to $3.89 Bn from $3.79 Bn in the previous year (2017).

Business Model - Funding

B2B B2B - B2C B2C

2018

2017

2016

2015

2014 0 % 10 20 30 40 50 60 70 80 90 100 %

SEED BRIDGE GROWTH LATE

300

250

200

150

100

0 2014 2015 2016 2017 2018

YoY Trend : B2B Funding By Stage

SEED STAGE BRIDGE STAGE GROWTH STAGE LATE STAGE

0.08 1.4

0.07 1.2 0.06 1.0 IN BILLIONS 0.05 IN BILLIONS 0.8 0.04 0.6 0.03 0.4 0.02

0.01 0.2

0 0 2014 2015 2016 2018 2014 2015 2016 2018 2017 2017

From the above graph, it is evident that 2018 witnessed an Overall, seed and late-stage funding dominated the B2B overall decline in the number of B2B deals across stages. space and the same can be seen in the comparative area Seed-funding deals saw a decline of 57.7%, followed by graph representing the amount of investments in bridge vs bridge funding (56.2%), and growth-stage funding (14%) seed and growth vs late stages. from 2017 to 2018.

21 © Inc42 Media | not for distribution YoY Trend : B2B-B2C Deals By Stage

SEED BRIDGE GROWTH LATE

400

350

300

250

200

150

100

0 2014 2015 2016 2017 2018

YoY Trend : B2B-B2C Funding By Stage

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

0.35 8

0.3 7

0.25 6 IN BILLIONS IN BILLIONS 5 0.2 4 0.15 3 0.1 2

0.05 1

0 0 2014 2015 2016 2018 2014 2015 2016 2018 2017 2017

The year 2018 appeared to be relatively better for the As far as amount raised is concerned, the seed and bridge hybrid B2B-B2C business model. The number of deals stages outshone others with an 241.62% and 159.60% increased by 46.67%, 35.48% and 5.95% in the bridge, increase (respectively) compared to 2017. This shows that late, and growth stage respectively, in comparison with there is an increased demand for startups with B2B-B2C 2017. In contrast to this, the number of deals in the seed business models which serve both the business and stage fell 28.50% to 153 in 2018 from 214 in 2017. consumer segments.

SEED BRIDGE GROWTH LATE

700

600

500

400

300

200

100

0 2014 2015 2016 2017 2018

YoY Trend : B2C Funding By Stage

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

0.18 4

0.16 3.5 0.14 3

IN BILLIONS 0.12 IN BILLIONS 2.5 0.10 2 0.08 1.5 0.06 0.04 1 0.02 0.5 0 0 2014 2015 2016 2018 2014 2015 2016 2018 2017 2017

Just like the hybrid B2B-B2C model, B2C startups also 39.65% and 24.28% rise, respectively. However, the late witnessed an increase in the number of deals — 21.62%, stage funding amount went down by 3.05%. 12.5%, 7.52%, respectively, in the bridge, late, and growth stages — as compared to 2017. It is evident that in 2018, investors were cautious about investing in the seed stage as there were fewer deals with The seed stage witnessed a decline of 38.82% in deals but big ticket sizes compared to previous years. On the other a 74.23% increase in the amount raised. The bridge and hand, consumer services startups in the growth and late growth-stage funding amount for this model witnessed a stages were able to attract investments.

23 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 24 Sectorwise Analysis

25 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 26 Amount 2018 By Top 5Sectors of thers Transport Tech Traveltech Deeptech Edtech Media &Entertainment ealthtech Consumer services Ecommerce Enterprisetech Fintech Funding AmountBySector

0 % 2014

20 2015

40 2016 50 5 4 3 2 1

60 Enterprisetech Traveltech Fintech Consumer Services Ecommerce 2017 70

90 2018

100 % Deals 2018 By Top 5Sectors of thers Transport Tech Traveltech Deeptech Edtech Media &Entertainment ealthtech Consumer services Ecommerce Enterprisetech Fintech Deals BySector

0 % 2014

20 2015

40 2016 50 5 4 3 2 1

60 Healthtech Consumer Services Ecommerce Enterprisetech Fintech 2017 70

90 2018

100 % 27

121 $1.4 Bn 121 Total Funding Deals Total Funding Amount Startups Funded 18 43 74 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

PolicyBazaar Pine Labs Lendingkart PhonePe ClearTax

29 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Fintech

The year 2018 saw a sharp FUNDING AMOUNT DEALS decline of 51.66% in the amount invested in fintech startups as compared to 3.5 140 2017. The amount decreased from $3.03 Bn (2017) to 3 120 $1.42 Bn (2018). The number of deals remained constant, 2.5 100 pointing towards the

saturation of the Indian IN BILLIONS fintech sector, where 2 80 licensing is going to be a decisive factor for VC 1.5 60 investments in startups. 1 40 As far as average ticket size is concerned, in 2018, seed 0.5 20 and bridge-stage deals outshone others in fintech 0 0 with a surge of 496.12% and 136.07% respectively, as compared to 2017. 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

5.5 120 5 100 4.5 4 IN MILLIONS IN MILLIONS 80 3.5 3 60 2.5 40 2

1.5 20 1 0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

BRIDGE FUNDING SEED FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT This graph represents the ratio of fintech deals and funding amount to the total number of 25% deals and investments in India on a year-on-year basis from 2014 to 2018. 20 There was a 10% decrease in the percentage share of fintech 15 funding in the total amount invested in 2018.

10 The percentage share of the number of fintech deals in the total number of deals increased 5 by 8% in 2018.

0% 2014 2015 2016 2017 2018

Highlights of Expectations in 2018 2019

Entry barriers tighten in fintech space with the introduction Banks to continue to work with startups; initiatives like of payment bank license ‘Yes Scale’ by YES Bank and strategic partnerships Decline in investment amount in the growth (-35.77%) like Axis Bank-Venture Catalysts to become more and late (57.28%) stages observed. prevalent Seed-stage investment surged by 496.12% Increase of insurancetech startups, as the insurance Confidence rises in insurancetech startups — according tech sector in expected to reach $280 Bn by 2020 to Inc42 Datalabs, $265 Mn invested in insurancetech Payment Bridge (APB) System for public distribution startups in 2018 system Mobile wallets reach critical mass in India, with more Increase in investment tech (assets under management than 79 Mn users in mutual funds rose by 13% to $340 Bn in 2018) UPI 2.0 may become a preferred option for making recurring payments like EMIs because of its scheduled Significant fundings in fintech 2018 payments option

Insurance tech PolicyBazaar ($200 Mn) Coverfox ($22 Mn) Payment enablers Pine labs ($207 Mn) Phonepe ($65.8 Mn) Lending tech Lendingkart ($87 Mn) Incred ($41.9 Mn)

31 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 32 Edtech

56 $695 Mn 52 Total Funding Deals Total Funding Amount Startups Funded 6 19 33 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

BYJU’S Toppr Educational Unacademy IMAX Program Initiatives

33 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Edtech

Edtech emerged as one of the FUNDING AMOUNT DEALS hottest sectors in the Indian startup ecosystem, registering a 85.29% increase in the amount 0.7 80 raised in 2018 — $695 Mn — as compared to $375 Mn in 2017. 0.6 68.57 Seed and late-stage investments witnessed the maximum surge in 0.5 57.14 average ticket size while bridge IN BILLIONS and growth-stage investments 0.4 45.71 witnessed moderate changes. 0.3 34.29 Besides, the average ticket size of seed investments saw an increase 0.2 22.86 of 286.40% while late-stage average ticket size increased by 0.1 11.43 156.37%. 0 0 The increase in the average ticket size of seed investments indicates the positive sentiment of investors towards emerging edtech startups and the increase in average ticket 2014 2015 2016 2017 2018 size of late-stage indicates their confidence in established players in the space.

Average Ticket Size By Stage Average Ticket Size By Stage

1 200 0.9 180 0.8 160 0.7 140 IN MILLIONS IN MILLIONS 0.6 120 0.5 100 0.4 80 0.3 60 0.2 40 0.1 20 0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT This graph represents the ratio of the number of deals 10% and total funding amount in the edtech space to the 9 total deals and investment amount on a year-on-year 8 basis from 2014 to 2018. 7 Edtech witnessed an 6 upward trend in the 5 percentage share of investment amount and 4 number of deals, with an 3 increase of 3.5% and 2.4% respectively. 2 1 0% 2014 2015 2016 2017 2018

Highlights of Significant fundings in fintech 2018 Testprep 2018 BYJU’s ($540 Mn) Toppr ($35 Mn) Average ticket size of seed investment surges by 286.40% Professional learning Confidence in testprep startups rises — as per Inc42 DataLabs, leading startups raised more than $600 Mn in AEON learning ($3.2 Mn) 2018 Edureka ($2 Mn) Edtech startups lag behind in catering to underprivileged Education centric ERP’s sections of Indian society. As per the World Bank, only 43% of 14-18-year-olds could do simple division; slightly Education Initiatives ($25 Mn) less than half couldn’t add weights in kilograms; more Imarticus learning ($2 Mn) than 40% couldn’t tell hours and minutes from a clock. Corporates eye edtech startups for the first time; RIL acquired a 73% stake in Embibe. Significant funding in edtech. Expectations in 2019

Surge in augmented reality-based learning with startups like Smartivity Labs bagging millions in funding; this trend is expected to become more prevalent in the future Rise of skill assessment platforms — with more than 4 Mn people joining the workforce annually in India, skill-assessment solutions will be in demand Increase in learning apps — a study by Gray Matters Capital suggests that 89% Indians are willing to pay for learning apps

35 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 36 Ecommerce

94 $2.1 Bn 75 Total Funding Deals Total Funding Amount Startups Funded 6 50 58 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Flipkart Paytm Mall Amazon India Udaan IMAX Zilingo

37 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Ecommerce

Overall, investment in ecommerce FUNDING AMOUNT DEALS was significantly lower in 2018 as compared to 2017 with a decrease of 41.37% in the total amount 4 180 invested. However, the number of deals remained somewhat similar to 3.5 157.5 2017 with a moderate decrease from 100 to 94 in 2018. 3 135

Despite the decrease in overall 2.5 IN BILLIONS 112.5 investment, investor confidence in the sector remains high, as 2 90 ecommerce startups continued to receive early-stage funding. This is 1.5 67.5 evident from the fact that there was a surge of 331.91% in the average 1 45 ticket size of seed-stage 0.5 investments. However, late- and 22.5 growth-stage deals fell significantly 0 0 in comparison to 2018.

Flipkart’s historical acquisition by Walmart worth $16 Bn has paved the way for other players too. 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.4 280 260 1.2 240 220 1 200 IN MILLIONS IN MILLIONS 180 0.8 160 140 0.6 120 100 0.4 80 60 0.2 40 20 0 0 2014 2015 2016 2018 2014 2015 2016 2018 2017 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT This graph represents the ratio of ecommerce deals 60% and funding amount to the total number of deals and 55 investments in India on a year-on-year basis from 2014 50 to 2018. 45 There was no significant 40 improvement in the 35 percentage share of ecommerce in total funding 30 or number of deals in 2018. 25 20 15 10% 2014 2015 2016 2017 2018

Highlights of Expectations 2018 in 2019

Leading foreign players bet on Indian ecommerce; IKEA, Decathlon 100% FDI in multi-store retail will open and Walmart expanding their reach in India doors for major international retail giants Walmart took 77% stake in Flipkart worth $16 Bn to get a slice of Indian Rise of multi-shopping channels will ecommerce force online players to explore traditional Confidence in recommerce and vertical ecommerce rises — asper retail; online portals like Zivame and Inc42 DataLabs, leading startups in recommerce and vertical Lenskart are spearheading the trend ecommerce raised more than $68 Mn and $194 Mn respectively in Ecommerce companies to expand their 2018 customer bases in Tier 2 and Tier 3 cities The party is over for established ecommerce players as average ticket as 732 Mn potential rural users are size in late stage investment plunges by 83.08% expected to join the digital revolution, as Cash-intensive nature of ecommerce impacts overall investments as per a study by the IAMAI amount plunges 41.37%. Discounts and cashbacks expected to shrink amid introduction an e-retailer cap bill Same-day delivery to become the hottest Significant fundings in Ecommerce in 2018 marketing trend in 2019 — Amazon and Flipkart processed approximately 25% of high-value orders with same-day delivery Online retail demand in 2018 Flipkart ($16 Bn) Paytm Mall ($445 Mn) Used automobiles Cars 24 ($50 Mn) Droom ($60 Mn) Recommerce and vertical ecommerce Cashify ($12 Mn) Nykaa ($35.7 Mn)

39 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 40 Consumer Services

81 $2.05 Bn 73 Total Funding Deals Total Funding Amount Startups Funded 17 56 51 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Swiggy Zomato Livspace UrbanClap Licious

41 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Consumer Services

The year 2018 saw a 324.14% FUNDING AMOUNT DEALS increase in investments in consumer services startups from the previous year. 2.2 160 However, the number of deals fell over the same 2 145.45 period, indicating an increase 1.8 130.91 in the ticket size. 1.6 116.36 The average ticket size of 1.4 101.82 IN BILLIONS seed-stage investments also 1.2 87.27 increased by 205.67% to 1 $860K in 2018 from $281K in 72.73 2017 evan as late-stage 0.8 58.18 investments rose by 0.6 43.64 585.95%. In contrast, the average ticket size in bridge 0.4 29.09 and growth stages decreased 0.2 14.55 by 23.94% and 41.5% 0 0 respectively. 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.4 180 1.3 160 1.2 140 1.1 IN MILLIONS IN MILLIONS 1 120 0.9 100 0.8 80 0.7 0.6 60 0.5 40 0.4 20 0.3 0.2 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT In 2018, the percentage share of the consumer services sector in the total 20% funding increased by 14.9% 18 while the percentage share of deals saw a moderate surge. 16 14 12 10 8 6 4 2% 2014 2015 2016 2017 2018

Highlights of Significant fundings in Consumer Services 2018 Food delivery and discovery 2018 Swiggy ($1.3 Bn) Zomato ($410 Mn) Overall increase of 324.14% in total investments compared to 2017 Subscription-based startups Average ticket size of growth-stage Milkbasket ($14 Mn) investments decreases by 41.5% Strong confidence in early-stage consumer Hungerbox ($4.5 Mn) services startups as average investment in Vertical food tech seed stage surges 205.67% Food delivery startups lead the growth of Licious ($50 Mn) consumer services sector — as per Inc42 Ycook ($5 Mn) DataLabs, foodtech raised more than $1.5 Bn in funding Rise in subscription-based models with Milkbasket and Daily Ninja leading the trend Expectations in 2019

Corporate food delivery expected to be the new trend in food delivery as startups like Hungerbox make headlines Subscription-based business models expected to rise in 2019 Healthy food demand expected to rise in Tier 1 cities as quest for better lifestyle gains momentum Surveillance and tracking expected to rise in hyperlocal fleet management as cases of package tampering become more prevalent

43 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 44 Enterprisetech

118 $775 Mn 113 Total Funding Deals Total Funding Amount Startups Funded 30 78 83 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Freshworks Novi Digital Avi Networks BrowserStack Icertis

45 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Enterprisetech

The enterprisetech sector saw FUNDING AMOUNT DEALS an overall increase of 28.44% in the funding amount from $604 Mn in 2017 to $775 Mn in 2018. 0.8 180 However, the number of investment deals decreased by 0.7 157.5 18% from 144 in 2017 to 118 in 2018. 0.6 135

The average ticket size for IN BILLIONS 0.5 112.5 seed-stage funding witnessed a surge of 34.91% in 2018, 0.4 90 along with late-stage investment, which saw a 0.3 67.5 moderate increase of 14.98%. In contrast to this, the average 0.2 45 ticket size in the bridge and growth stages declined 0.1 22.5 moderately as visible in the 0 graphs below. 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1 40

0.9 35

0.8 30 IN MILLIONS IN MILLIONS 0.7 25

0.6 20

0.5 15

0.4 10

0.3 5

0.2 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT In terms of the ratio of enterprisetech sector funding to the total funding, there 24% was an increase of 2.44% in 22 2018 (as compared to 2017) in the amount raised, while 20 the percentage share of 18 number of deals witnessed only a moderate rise from 16 15.38% to 15.88%. 14 12 10 8 6 4 2% 2014 2015 2016 2017 2018

Highlights of Significant fundings in Enterprisetech 2018 CRMs 2018 Freshworks ($100 Mn) Icertis ($50 Mn) Investment in enterprisetech increases by 28.44% Blockchain based e-governance is all talk and no Vertical ERPs show; there is no progress in its implementation in Hotelogix ($50 Mn) states like Andhra Pradesh and Telangana M&As in enterprisetech is the highest as compared Shop X ($35 Mn) to other sectors mentioned in this report with a 24% Analytics and optimisation share of total M&As Machine learning/artificial intelligence are the ‘X’ Avi Networks ($60 Mn) factor for enterprisetech, as accuracy of predictions Novi Digital ($78.3 Mn) improves Average amount of investment in the seed stage surges by 34.91% Expectations in 2019

SMEs expected to become the new focus for enterprisetech as demand for GST-enabled applications increases Blockchain to dominate the data storage space because of its best in class security framework Cybersecurity to become the biggest vertical for enterprisetech as cost of security breaches surges by 22% in 2018 Government projects expected to become more inclusive of startups as evident from defense and space tech programmes meant to encourage innovation

47 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 48 Traveltech

23 $945 Mn 20 Total Funding Deals Total Funding Amount Startups Funded 7 18 18 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

OYO Travel Triangle HeadOut MakeMyTrip DriveU

49 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Traveltech

The traveltech sector witnessed FUNDING AMOUNT DEALS a 21.87% rise in investment in 2018; however, the number of deals decreased 23.3% from 30 1 40 in 2017 to 23 in 2018. 0.9 36 In terms of average ticket size, 0.8 32 seed, bridge, and late-stage deals saw a 62.49%, 1301.4% 0.7 28 and 44.64% rise respectively in IN BILLIONS 0.6 24 2018. However, for the growth stage, it fell by 87.61%. 0.5 20 0.4 16 0.3 12 0.2 8 0.1 4 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.6 200

1.4 180 160 1.2 140 IN MILLIONS IN MILLIONS 1 120 0.8 100 80 0.6 60 0.4 40 0.2 20 0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT The graph represents th ratio of the ratio of traveltech deals and funding amount to the 11% total number of deals and 10 investments in India on a year-on-year basis from 2014 9 to 2018. The ratio of funding amount increased from 6% in 8 2017 to 8.8% in 2018, while 7 deals did not see any significance change. 6 5 4 3 2 1% 2014 2015 2016 2017 2018

Highlights of Significant fundings in Traveltech 2018 Accommodation Booking 2018 OYO ($900 Mn) TravelTriangle ($12 Mn) Average ticket size of growth stage investment plunges by 87.61%. Intercity car rentals Average seed stage investment surges 62.49%. HeadOut ($10 Mn) Accommodation booking startups lead the DriveU ($3 Mn) race in this sector with OYO spearheading the Travel planning trend. OYO expanded to china with inventory of more Trell ($1.25 Mn) than 100k rooms. Guiddoo ($800K) Expectations in 2019

Indian unicorns expected to head for foreign markets with Ola and OYO leading the way Rise in luxury hotel booking platforms as current booking gateways become saturated with budget hotels, opening up a gap in premium accommodation Travel vlogging to become the new marketing trend; startups like TravelTriangle have started shifting from traditional blogs to vlogs Last-minute bookings the next big thing — as per a study by Trekksoft, 39% of the participants said that last-minute bookings were a common trend in their businesses

51 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 52 Media & Entertainment

59 $726 Mn 56 Total Funding Deals Total Funding Amount Startups Funded 9 62 30 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Gaana Dream11 ShareChat Paytm Global Sports Entertainment Commerce (GSC)

53 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Media & Entertainment

There was an overall increase FUNDING AMOUNT DEALS of 185.27% in total investment in media and entertainment startups from $254 Mn in 0.8 80 2017 to $726 Mn in 2018. The number of deals showed no 0.7 70 significant change. 0.6 60 The average ticket size for seed-stage investments also 0.5 IN BILLIONS 50 increased by 87.63% in 2018 as did late-stage investments, 0.4 40 which witnessed a 186.89% increase. Bridge and 0.3 30 growthstage investments grew by 131.98% and 39.77% 0.2 20 respectively. 0.1 10

0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.2 60 1.1 55 1 50 45 0.9 IN MILLIONS IN MILLIONS 40 0.8 35 0.7 30 0.6 25 0.5 20 0.4 15 0.3 10 0.2 5 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT This graph represents the ratio of deals and funding amount in media and 8% entertainment to the total number of deals and 7 investments in India on a year-on-year basis from 2014 to 2018. While the deals and 6 amount increased from 5.76% in 2017 to 7.94% in 2018 and 1.95% to 6.06%, 5 respectively.

2% 2014 2015 2016 2017 2018

Highlights of Significant fundings in Media & Entertainment 2018 Mobile Gaming 2018 Dream 11 ($100 Mn) Gamepind ($16 Mn) Total amount of investment in media and entertainment rises by 185.27% Music Streaming Average ticket size of late-stage Gaana ($115 Mn) investment increases by 186.89% News aggregators in demand; Inshorts Smule ($20 Mn) and DailyHunt record a combined total of News Aggregators 55 Mn in app downloads Music streaming and video editing steal News dog ($50 Mn) the show, Saavn and Gaana lead the wave Daily hunt ($6.2 Mn) Rise of Millenial-focussed media platforms like Newslaundry, ScoopWhoop, etc, in various different categories Expectations in 2019 Rise of vernacular social networks and news platforms expected as Sharechat and Roposo continue to attract big numbers in funding Due to increasing cases of plagiarism and piracy, music publishing and streaming companies to adopt blockchain Widespread use of AI/ML in music and video suggestions due to improved predictability Nazara Games expected to go public with IPO offering, making it the first Indian company to do so Demand for products to counter fake news expected to rise with companies like Facebook countering fake information with manual checks; soon AI/ML algorithms are expected to take over Use of AR/VR in movies, with PVR introducing VR cinemas in India

55 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 56 Healthtech

69 $504 Mn 64 Total Funding Deals Total Funding Amount Startups Funded 3 59 56 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

CureFit DocPrime PharmEasy Netmeds Innovaccer

57 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Healthtech

There was an overall FUNDING AMOUNT DEALS increase of 45.06% in the total investment made in healthtech startups in 2018. 0.55 120 The number of investment deals witnessed a 40.51% 0.50 109.09 decline from 116 in 2017 to 0.45 98.18 69 in 2018. 0.40 87.27 The average ticket size of 0.35 76.36 IN BILLIONS seed-stage investments 0.30 65.45 also increased by 608.36% in 2018, along with bridge 0.25 54.55 investments which saw a 0.20 43.64 31.95% rise. In contrast, 0.15 32.73 growth stage investments decreased by 26.69% last 0.10 21.82 year. 0.5 10.91 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

2.2 40

2 35 1.8 30 1.6 IN MILLIONS IN MILLIONS 1.4 25 1.2 20 1 0.8 15 0.6 10 0.4 5 0.2 0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT A decline in deals from 12.3% in 2017 to 9.2% in 2018 was witnessed along with a surge 13% in amount from 2.6% in 2017 to 4.5% in 2018. The graph 11 above represents the ratio of healthtech deals and funding amount to the total number 9 of deals and investments in India on a year-on-year basis from 2014 to 2018. 7

0% 2014 2015 2016 2017 2018

Highlights of Significant fundings in Healthtech 2018 Epharmacy 2018 PharmEasy ($80 Mn) Netmeds ($35 Mn) Average ticket size of seed stage investments surges by 608.36% Data Analytics and optimisation Overall investment in healthtech increases by Innovaccer ($25 Mn) 45.06% Suki.ai ($20 Mn) Epharmacy leads the healthtech domain — as per Inc42 DataLabs, more than $150 Mn was raised by epharmacy startups in 2018 Confidence in wellness and fitness optimisation, with Curefit and F45 leading the wave Expectations in 2019

Demand for air purifiers expected to increase, with air quality index (AQI) worsening in cities like Delhi, Kanpur, Mumbai, etc Further advancement in wearable tech expected, as smartphone sync with wearables increases Decline of investor confidence in epharmacy amid ban orders by Madras high court Increase in app-based fitness optimisation and tracking Insurancetech expected to pick up further in 2019 with government health schemes like Ayushman Bharat becoming more prevalent. Focus on elder-specific products as ageing population increases worldwide

59 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 60 Deeptech

42 $151 Mn 40 Total Funding Deals Total Funding Amount Startups Funded 9 23 28 Total M&As Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

ThinCl GOQii AntWorks Servify DeTect Technologies

61 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Deeptech

There was an overall increase FUNDING AMOUNT DEALS of 20.68% in the total funding amount in the deeptech from $347 Mn in 2017 to $504 Mn 0.24 90 in 2018. The number of investment deals witnessed a 0.22 82.5 52.27% decline from 88 in 0.20 75 2017 to 42 in 2018. 0.18 67.5 0.16 60 The average ticket size of IN BILLIONS seed-stage investments also 0.14 52.5 increased by 61.84%, along 0.12 45 with growth-stage funding, 0.10 37.5 which increased by 18.05%. 0.08 30 In contrast, bridge deals fell by 27.16%. 0.06 22.5 0.04 15 0.02 7.5 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.2 70 1.1 60 1 0.9 50 IN MILLIONS IN MILLIONS 0.8 40 0.7 0.6 30 0.5 0.4 20 0.3 10 0.2 0.1 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

DEALS FUNDING AMOUNT This graph represents the ratio of deeptech deals and funding amount to the total 10% number of deals and 9 investments in India on a year-on-year basis from 2014 8 to 2018. The funding amount increased marginally from 7 0.96% in 2017 to 1.37% in 6 2018. In contrast, deeptech’s percentage share of deals fell 5 from 9.4% in 2017 to 5.6% in 4 2018. 3 2 1 0% 2014 2015 2016 2017 2018

Highlights of Expectations in 2018 2019

Number of investment deals in deeptech declines by Rise in home automation, as AI assistants like Alexa 52.27% and Google Home pave the way for further Reluctance by public sector entities to adopt deeptech advancement in consumer preferences solutions due to unavailability of basic infrastructure like AI-based surveillance for security monitoring as cyber internet and electricity in rural India terrorism and other threats advance Average ticket size of seed-stage investment surges by Rise in sector-specific DaaS digitalisation of data to 61.84% pave the way for DaaS startups in near future IoT and hardware lead the way in deeptech with more Introduction of drone-based delivery in India, with than $107 Mn in investments introduction of the Unmanned Aircraft Operator Permit (UAOP) by the office of the dIrector general of civil aviation Merger of IoT and blockchain to enhance the data Significant fundings in Deeptech 2018 channels used in the Internet of Things framework

IoT and hardware GOQii ($30 Mn) DeTect Technologies ($3.5 Mn) AntWorks ($15 Mn) Planys Technologies ($2.16 Mn) AI and ML Peritus.ai ($2 Mn) IQLECT ($2.5 Mn) Kristal.ai ($1.87 Mn)

63 © Inc42 Media | not for distribution Demographic Breakdown

Funding Deals By Hubs

2014 2015 2016 2017 2018

OTHERS

PUNE

MUMBAI

HYDERABAD

DELHI/NCR

BENGALURU 10 20 30 40 50 60 70 80 90 0 % 100 %

Funding Amount By Hubs

2014 2015 2016 2017 2018

OTHERS

PUNE

MUMBAI

HYDERABAD

DELHI/NCR

BENGALURU 10 20 30 40 50 60 70 80 90 0 % 100 %

65 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 66 Delhi-NCR

224 $4.4 Bn 189 Total Funding Deals Total Funding Amount Startups Funded 132 103 Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

OYO Paytm Mall ReNew Power Zomato PolicyBazaar

67 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Delhi-NCR Delhi-NCR

INVESTMENT DEALS The Delhi-NCR region has witnessed an increase in funding in the past two years. 5 500 But the amount raised by the 4.5 450 startups in 2018 saw a moderate rise of just 3% from 4 400 $4.26 Bn in 2017 to $4.41 Bn 3.5 350 in 2018. In contrast, the number of deals decreased by IN BILLIONS 3 300 5% since 2017. 2.5 250 The average ticket size in 2 200 bridge funding decreased by 1.5 150 4%. In contrast, the average ticket size of seed funding 1 100 increased by 287% from 0.5 50 $719K in 2017 to $2.7 Mn in 2018. The average ticket size 0 0 of late-stage funding plunged by 28% from $141 Mn in 2017 to $101 Mn in 2018. 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

3.0 S 0.16

2.5 0.14 ILLIO N B

0.12 N IN MILLIONS 2.0 I 0.10

1.5 0.08

0.06 1.0 0.04 0.5 0.02

0.0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

Delhi-NCR

The Delhi government is still in the process of The Delhi government has launched a draft EV drafting a startup policy to strengthen the startup policy with an aim to have 25% of all vehicles as ecosystem in the state and to create new job electric vehicles by 2023. The draft focuses on opportunities. In 2016, the Delhi government had incentivising purchase of electronic two-wheelers. also approved an incubation policy and allocated INR 40 Cr for 2017-2018 to promote, develop, and facilitate incubation infrastructure in Delhi. The Delhi government will soon set up an incubation-cum-innovation centre to promote entrepreneurship in the state. The centre will be The Rajiv Gandhi Swalamban Rozgar Yojana capable of facilitating 50 startups at any given provides a subsidy at 15% of the project cost, point in time and will be the first such centre to be subject to a ceiling of INR 7,500 per entrepreneur. supported by Delhi government. Under the scheme, INR 36.06 Lakh was disbursed to 14 beneficiaries during 2017-18. The government has set a target to provide financial assistance to 50 units during 2018-19. The Foundation for Innovation and Technology Transfer (FITT), IITD, also runs a slew of startup-oriented programmes. Under the Women Entrepreneurship and Empowerment (WEE) Startups in the Delhi-NCR region received a total programme, FITT has trained 500 women funding of $15 Bn from 2014 to 2018. The city is entrepreneurs in urban India and 8,500 women in home to the highest number of active investors/VCs rural India in various micro-enterprise activities. and 8,500+ active startups.

69 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 70 Bengaluru

247 $4.7 Bn 210 Total Funding Deals Total Funding Amount Startups Funded 122 148 Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Swiggy BYJU’s Flipkart Udaan Curefit

71 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Bengaluru Bengaluru

FUNDING AMOUNT DEALS Bengaluru, which is the biggest startup hub in the country and has produced 8 400 more than 11,000 startups till date, witnessed a serious 7 350 drop in total funding amount and the number of deals in 6 300 2018. While the funding decreased 31% from $6.8 Bn 5 250 IN BILLIONS in 2017 to $4.7 Bn in 2018, 4 200 the deals fell by 35%.

3 150 The average ticket size of bridge funding and seed 2 100 funding has seen a colossal rise in of funding by 61% and 1 50 477% respectively in 2018. Meanwhile, the average ticket 0 0 size of late-stage funding has fallen by 45% from $182 Mn in 2017 to $100 Mn in 2018. 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

2.5 S 0.20 0.18 2.0 0.16 BILLIO N

N 0.14 IN MILLIONS I 1.5 0.12 0.10 1.0 0.08 0.06 0.5 0.04 0.02 0.0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

SEED FUNDING BRIDGE FUNDING GROWTH STAGE LATE STAGE

Bengaluru

The Karnataka Startup policy 2015-2020 was The Karnataka government also organises India’s introduced to stimulate 20,000 startups and largest state-run incubation programme — create 600,000 direct jobs and 1.2 Mn indirect Elevate. With a fund allocation of INR 400 Cr, jobs in the state. 233 startups have been accelerated in three cohorts so far.

As part of the policy, the Karnataka government announced plans to mobilise an INR 2,000 Cr With a view to foster strong relations between funding for investment in startups through R&D and industries, the state government will government intervention alone. This is to be assist in the setting up of TBIs at institutions of done by leveraging the Fund of Funds and higher learning with well-developed R&D facilitate at least 25 innovative technology facilities. The idea is to enable a strong link solutions with a social impact in sectors such between R&D and commercialisation of as healthcare, food security, clean technologies so developed. environment, education for all, etc.

The Karnataka government is also collaborating Some of the state-backed startup-oriented with the private sector and has introduced funds are Kitven Fund I and II, Idea2PoC various funds and incubation infrastructure with Grant, Grand Challenges, Semiconductor an aim to fund startups in their early stages and Venture Fund, BioVenture Fund, and AVGC provide them infrastructural support. Venture Fund.

73 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 74 Mumbai

143 $914 Mn 131 Total Funding Deals Total Funding Amount Startups Funded 110 96 Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Dream 11 Novi Digital BrowserStack PharmEasy InCred

75 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Mumbai Mumbai

FUNDING AMOUNT DEALS Mumbai has seen a 22% increase in the funding amount from $749 Mn in 1.2 300 2017 to $914 Mn in 2018, whereas the number of deals 1 250 have reduced by 12%. The average ticket size of 0.8 200 seed funding surged by IN BILLIONS 161% from $530K in 2017 to 0.6 150 $1.3 Mn in 2018. Similarly, the average ticket size of growth-stage funding 0.4 100 increased by 38%, whereas the average ticket size of 0.2 50 late-stage funding decreased by 6% from $32 Mn in 2017 to $30 Mn in 2018. 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

1.6 S 0.07

1.4 0.06

1.2 BILLIO N N I

IN MILLIONS 0.05 1

0.8 0.04

0.6 0.03 0.4 0.02 0.2

0 0.01 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

GROWTH STAGE LATE STAGE SEED FUNDING BRIDGE FUNDING

Mumbai

In 2018, the Maharashtra government approved The state government has identified 12 sectors a new policy called the Maharashtra State and each sector will have at least three Innovative Policy, which aims to develop 15 incubators. The Brihanmumbai Municipal incubators, attract INR 5,000 Cr investment, Corporation tied up with SINE to launch a 4,000 facilitate 10,000 startups, and create 500,000 sq m incubation hub to house up to 10 offices. direct and indirect jobs. The Thane Municipal Corporation (TMC) will set up a 1.2 Lakh sq ft Global Impact Centre (GIC) to generate around 50,000 jobs and 800 new entrepreneurs over the next five years. Maharashtra hosted a startup week from June 25 to 29, 2018, in which three startups from each sector were give a funding amount of INR 10-15 Lakh to prove their concepts. Another two-day startup event — Startup Symposia — focuses on With an aim to provide funds capital access to providing a networking platform to everyone in startups, the Maharashtra government has set the startup ecosystem across various cities in up different funds like the Funds of Funds up to Maharashtra. INR 500 crore over a time of 5 years and crowdfunding where the government will match online contributions up to INR 5 Lakh.

The government is also providing startups exemption from some local laws. For instance, The state government may also reimburse the startups with fewer than 10 employees no longer state goods and services tax (SGST) paid by need to obtain the Shop and Establishment Act startups, provided that customers of the said license. It’s also SGST rebate by startups, startups can’t avail system credit. provided customers can’t avail system credit.

77 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 78 Hyderabad

19 $92 Mn 18 Total Funding Deals Total Funding Amount Startups Funded 9 12 Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

ThinCI CallHealth Samosa Labs Joveo Foyr

79 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Hyderabad Hyderabad

FUNDING AMOUNT DEALS In 2018, Hyderabad received only $92 Mn in funding, which was just 26% of the 0.45 45 previous year. Similarly, the number off deals fell sharply 0.4 40 by 50% from 38 deals in 0.35 35 2017 to 19 deals in 2018.

0.3 30 The average ticket size of IN BILLIONS seed funding increased by 0.25 25 139% from $560K in 2017 to 0.2 20 $1.3 Mn in 2018. In contrast, the average ticket size of 0.15 15 growth stage and late-stage 0.1 10 funding fell by 50% and 22% respectively in 2018. 0.05 5 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

3.0 S 0.16

0.14

2.5 ILLIO N B

0.12 N I IN MILLIONS 2.0 0.10

1.5 0.08 0.06 1.0 0.04

0.5 0.02

0.0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

GROWTH STAGE LATE STAGE SEED FUNDING BRIDGE FUNDING

Hyderabad

The Telangana government has unveiled an The state government has allocated special Innovation Policy which has set up a master fund funds like the T-Fund and T-Seed to provide of INR 2,000 Cr to invest in sector-specific and funding for startups in early and seed stages. general venture capital funds. It has also launched the Phoenix fund in collaboration with the private sector to attract entrepreneurs who have had at least one venture previously. The Telangana government will anchor all its entrepreneurship-related efforts to T-Hub, which acts as the focal point of the entrepreneur ecosystem and provides physical and technology In order to encourage startups in academia infrastructure to incubate 200+ startups. It has and education, the Telangana government is plans to expand the capacity to 900 startups in collaborating with educational institutions in the near future. its capital, which is home to leading national institutions like IIT, IIIT, BITS, NIT, etc, to encourage people to become entrepreneurs.

The Telangana State Innovation Cell has launched a government mentorship programme by selecting the first cohort of 10 startups The state Telangana will also be launching focusing on big data, machine learning, artificial T-Works, which is the india’s biggest hardware Intelligence, and other emerging technologies. prototyping centre for electronics, electromechanical and mechanical startups, and will bring software and hardware startups together.

81 © Inc42 Media | not for distribution © Inc42 Media | not for distribution 82 Pune

17 $94 Mn 17 Total Funding Deals Total Funding Amount Startups Funded 6 10 Unique Angels Unique VCs

Top 5 Funding Grossers Of 2018

Icerits XpressBees Anchanto LiveHealth Bon

83 © Inc42 Media | not for distribution YoY Trend : Funding And Deals In Pune Pune

FUNDING AMOUNT DEALS Pune witnessed a drastic fall in funding amount in 2018. Its funding declined by 61% from 0.45 45 $241 Mn in 2017 to $94 Mn in 2018. Similarly, the number of 40 0.40 deals fell by 45%. 0.35 35 In 2018, the average ticket size 0.30 30 of bridge funding decreased IN BILLIONS by 26% along with the average 0.25 25 ticket size of seed funding, 0.20 20 which plunged by 56% from $1.7 Mn in 2017 to $770K in 0.15 15 2018. Similarly, the average 0.10 10 ticket size of growth-stage funding declined 95% as 0.05 5 compared to 2017. 0 0 2014 2015 2016 2017 2018

Average Ticket Size By Stage Average Ticket Size By Stage

3.5 S 0.08

3.0 0.07 ILLIO N B

0.06

2.5 N I IN MILLIONS 0.05 2.0 0.04 1.5 0.03

1.0 0.02

0.5 0.01

0.0 0 2014 2015 2016 2018 2017 2014 2015 2016 2018 2017

GROWTH STAGE LATE STAGE SEED FUNDING BRIDGE FUNDING

Of Other Hubs

Apart from Delhi-NCR, Bengaluru, Mumbai, India’s largest startup incubation hub in Jaipur Hyderabad, and Pune, around 93 deals were “Bhamashah Techno Hub”, with a seating executed and $720 Mn invested in other capacity of 700, went live in August, lending a startup hubs across India major fillip to the entrepreneurial ecosystem in Rajasthan.

Chennai has emerged as one of the top hubs in the country after Delhi-NCR, Bengaluru, With India’s top cities witnessing saturated and Mumbai, securing 33 deals with $349 Mn economic growth, a number of Tier 2 and Tier 3 in 2018. are emerging as the next IT destinations in the country.

Jaipur secured $155 Mn funding through 6 deals whereas Ahmedabad secured $131 Mn The top emerging startup hubs in India are through 12 deals in 2018. Chandigarh, Ahmedabad, Jaipur, Bhubaneswar, Kochi, Trivandrum, Coimbatore, and Kozhikode.

85 © Inc42 Media | not for distribution Investor Participation In Funding

PARTICIPATION IN DEALS DEALS PER INVESTOR In 2018, both investor participation and unique investors have come down by 17% from 1.9K in 2017 UNIQUE INVESTORS to 1.6K in 2018 and 1.1K to 0.99K respectively. 2500 2.50 In 2015, we witnessed highest deals per investors i.e. 1.95, 2000 2.00 meaning, on an average each investor participated in two deals. However, since 2016 the number 1500 1.50 has been decreasing and in 2018 the number has come down to 1.62. 1000 1.00

500 0.50

INVESTOR / DEAL COUNT 0 0.0 DEALS PER INVESTOR 2014 2015 2016 2017 2018

YoY Unique Investor Particpation by Type

ANGEL INVESTOR VENTURE CAPITAL CORPORATE ANGEL NETWORKS OTHERS

ACCELARTAR & INCUBATOR FAMILY OFFICE FUNDS

2018

2017

2016

2015

2014 0 % 10 20 30 40 50 60 70 80 90 100 %

87 © Inc42 Media | not for distribution Angel Investors

In 2018, the number of unique angel investors that participated in Indian technology startup funding was 416 — a 42% drop compared to 2016 and a 30% drop compared to 2017.

The average number of deals per investor also came down drastically. From 1.35 in 2016, it stood at 1.15 in 2018. This accounts for the fall of deals in seed funding as angel investors are primary drivers of early-stage funding.

YoY Trend : Angel Investors

PARTICIPATION IN DEALS DEALS PER INVESTOR

UNIQUE INVESTORS

1600 1.60

1400 1.40

1200 1.20

1000 1.00

800 0.80

600 0.60

400 0.40

200 0.20

INVESTOR / DEAL COUNT 0 0.0 DEALS PER INVESTOR 2014 2015 2016 2017 2018

Rajan Anandan 6

Kris Gopalakrishnan 5 Angels Bikky Khosla 4

Raghunandan G 3

Anand Chandrasekaran 3

Girish Mathrubootham 3

Anirudh Agarwal 3

Nandan Nilekani 3 Participation in Deals Anupam Mittal 3

Ramakant Sharma 3

Arihant Patni 3

Sunil Kant Munjal 3

89 © Inc42 Media | not for distribution Ratio of unique Angel Investor

70 %

0 % 2014 2015 2016 2017 2018

Looking at the spread of deals amongst the angels, 90% have done just a single investment and just 1% have done more than 3 investments.

1% More than 3 investments 2% 3 investments

7% 2 investments

90% Single investment

The number of venture capital (VC) funds that invested in the Indian startup ecosystem in 2018 decreased to 282 from 315 in 2017. The ratio of VCs to total investors investing in the ecosystem witnessed a declining trend from 2014 to 2017. However, in 2018, an increasing trend is evident from the graph below, with the ratio increasing moderately from 2.19 to 2.38.

YoY Trend : VC Funds

PARTICIPATION IN DEALS DEALS PER INVESTOR

UNIQUE INVESTORS

800 4.00

700 3.50

600 3.00

500 2.50

400 2.00

300 1.50

200 1.00

100 0.50

INVESTOR / DEAL COUNT 0 0.0 DEALS PER INVESTOR 2014 2015 2016 2017 2018

91 © Inc42 Media | not for distribution Accel Partners India 28

Sequoia Capital India 24

Blume Ventures 18

Nexus Venture Partners 15

Kalaari Capital 15

Matrix Partners India 14

Omidyar Network 14

SAIF Partners 13

IDG Ventures 13 Participation in Deals Venture Capital Fund Venture Beenext Ventures 10

Lightspeed Venture Partners India 10

30 %

0 % 2014 2015 2016 2017 2018

68% Single investment 3% more than 10 investments

9% 5-10 investments

20% 2-4 investments

The ratio of VCs to the unique investors who invested in Indian startups in 2018 saw a sharp rise. From 21% in 2016, it has now reached 28% — the highest in the last five years.

The spread of deals among VCs was also considerably better. While 68% VCs made only one investment, 20% made 2-4 investments, and 3% made more than 10 investments in 2018.

93 © Inc42 Media | not for distribution Funds Launched in 2018

Education Catalst Fund Corporate 20 January Edtech

3one4 Capital Fund II Corporate 40 January Consumer services EdTech Enterprise Name tech eeptech

Sith Sense entures Fund II Fund Type VC Fund 68 January Consumer services EdTech Sector Focus

Omnivore Partners India Fund II 46 Launch Month Agritech

Corporate February Launch Status

Cisco India Startups Fund II Corporate ndisclosed March FinTech

G Coop Fund Corporate 50 March Sector Agnostic

1Crowd Fund I Corporate 4 March FinTech Fund Size ( in Mn, USD )

Prime enture Partners III Corporate 62 March FinTech

Fireside entures Maiden Fund I Corporate 52 March FinTech

SeaLin Capital Fund I Corporate 315 March Consumer services Fintech ealthtech

nitus entures India Fund II Corporate 15 March Edtech ealthtech FinTech AgriTech

Lightspeed enture Partners Select III Corporate 1000 March Ecommerce gaming eeptech

M Financial Private Euit Fund II Corporate ndisclosed April eal estate tech

India uotient 3 Corporate 30 April Fintech

Saama Capital F I Corporate 100 April Ecommerce eeptech

Indian Angel etwor Maiden Fund II Corporate 33 May FinTech

eus entures Ltd Corporate 313 May FinTech

Bharat Inclusion Initiative Corporate 25 May Edtech

Indian Angel etwor Maiden Fund II Corporate 34 May FinTech

India-dedicated Fund Corporate 50 May FinTech

Ailor entures(Seed Fund) Corporate 30 June FinTech

BP eep ealth Seed Program Corporate 10 June Consumer services Ecommerce Enterprise tech FinTech ealthtech

Massive Fund I thers 150 June FinTech

*Launched *To be launched

Artha enture Fund-I Family 6 July Sector Agnostic Name Fund

Bharat Innovation Fund Fund Type Corporate 100 July ealthtech Agritech ( Maiden Fund) Sector Focus Launch Month Launch Status Lightspeed India Partners II Corporate 175 July Ecommerce gaming eeptech

SI Capital Fund-I Corporate 40 July Enterprise Tech Consumer Tech

Pi entures Maiden Fund Corporate 35 August Sector Agnostic Fund Size ( in Mn, USD ) Seuoia Capital India I Corporate 695 August Consumer services ealthtech Technolog

BP Corporate 1900 August Consumer services Ecommerce Enterprise tech FinTech ealthtech

nicorn India entures Maiden Corporate 83 September Consumer services Ecommerce venture debt fund Enterprise tech FinTech ealthtech eeptech

TS Shriram Growth Fund 3 Corporate 114 ctober Sector Agnostic

IvCap Angel Fund Corporate 8 ctober ealthtech Edtech Agritech

L Angel Fund Corporate ndisclosed ctober FinTech

Alteria Capital India Fund I Corporate 123 ctober FinTech

Alteria Capital India Fund I VC Fund 86 ctober ealthtech Enterprisetech Ecommerce

Blume entures Fund III VC Fund 80 ctober ealthtech Fintech Traveltech Ecommerce Edtech Media and Entertainment

Chiratae entures VC Fund 300 ctober Sector Agnostic (Earlier IG entures)

IvCap entures Angel Fund VC Fund 8 ctober Sector Agnostic

TS Shriram Growth Fund III VC Fund 163 ctober Fintech Consumer services

Aavishaar Group South Asia-focused VC Fund 300 November Sector Agnostic Fund (8th Fund and not India specific)

Shunwei Capital Fund 6 VC Fund 1210 November Fintech Consumer services (Chinese Fund with India focus)

Grand Anicut Fund II VC fund 139 November Sector Agnostic

Ashapat Singhania Earl Stage Corporate 14 November Sector Agnostic Fund (compan International)

*Launched *To be launched

95 © Inc42 Media | not for distribution Platforms & Networks

81No. of Deals 23No. of Angel Networks No. of Active*19 Angel Networks

19 angel networks invested in 81 deals in 2018

Deals per angel network in 2018 Top angel networks/platforms that invested in 2018

Venture Catalyst (33) Indian Angel Network (11) 3.6 Mumbai Angel Network(10)

YoY Trend : Angel Network Investment

PARTICIPATION IN DEALS DEALS PER INVESTOR

UNIQUE INVESTORS

120 7.20

100 6.00

80 4.80

60 3.60

40 2.40

20 1.20

INVESTOR / DEAL COUNT 0 0.0 DEALS PER INVESTOR 2014 2015 2016 2017 2018

*Active suggests actively funding in 2018

© Inc42 Media | not for distribution 96 Incubators & A total of 15 incubators and accelerators participated in startup funding, with a total of Accelerators 46 deals. Apart from funding deals, incubators and accelerators also invest in startups that they select as part of cohorts at an early stage. 250+ 46 15 No. of Incubators & Accelerators No. of Deals No. of Active* Incubators & Accelerators

Deals per incubator and accelerator in 2018 Top angel networks that invested in 2018

78% increase Y Combinator (12) from 1.44 in Axilor (10) 2.57 2017 Isme Ace (4)

YoY Trend : Incubator & Accelerator Investment

PARTICIPATION IN DEALS DEALS PER INVESTOR

UNIQUE INVESTORS

40 4.00

35 3.50

30 3.00

25 2.50

20 2.00

15 1.50

10 1.00

5 0.50

INVESTOR / DEAL COUNT 0 0.0 DEALS PER INVESTOR 2014 2015 2016 2017 2018

*Active suggests actively funding in 2018

97 © Inc42 Media | not for distribution The Game Of Consolidations M&As YoY Trend : M&A

180 Although a lot of high-value M&A deals 160 were observed in the Indian startup ecosystem in 2018, the overall M&A 140 continued to drop for the third 120 consecutive year to stand at 125 deals. Though there wasn’t a significant drop 100 in M&A as compared to 2017 (just 3%), as compared to 2016, when 155 deals 80 were concluded, there was a 19.35% 60 decline in 2018.

40 This trend could be attributed to the funding gap observed in the ecosystem 20 consecutively in 2017 and 2018. 0 The maximum number of M&As were observed in enterprisetech, fintech, consumer services, and the media and

2015 2016 2017 2018 entertainment segment in 2018.

6% Traveltech Deeptech 7% 5% Ecommerce 1% Adtech

Media and Entertainment 8% 5% Edtech 3% Logistics

4% Transport Consumer 13% Tech Services

18% Others

5% Real Estate Tech

Fintech 14% 5% Healthtech

24% Enterprisetech

A decade ago, as the world’s first blockchain, Bitcoin triggered a revolution that was supposed to disrupt the global financial system. In 2018, Bitcoin’s freefall took away some of its sheen but the inherent value of blockchain has been proven without doubt. According to the MIT Technology Review, blockchain will make less noise in 2019 but be a lot more useful.

Often, new technologies catch the fancy of the tech world for a while and then fade away when their impact and adoption don’t match up to the initial hype. Still, developers and engineers constantly look for the next big tech trend and large companies keep a lookout for the next big disruption. Here, we’ve rounded up for you the technologies that are set to gain prominence in 2019.

99 © Inc42 Media | not for distribution Generative adversarial networks (GANs) are deep neural net architectures comprising of two nets, pitting Generative one against the other (thus, the “adversarial”). This is used to improvise the results of AI/ML prediction models widely used in applications such as image Adversarial processing and business intelligence etc. This breakthrough technology was first introduced in a (GAN) paper by Ian Goodfellow and other researchers at the Network University of Montreal, including Yoshua Bengio. Since its introduction, GAN has been constantly praised by tech heavyweights. For instance, in 2014, Facebook’s AI research director Yann LeCun called adversarial training “the most interesting idea in the last 10 years in ML.”

D - Dimensional Noise Vector Real Discriminator Image Network

Generator Fake Network Image Predicted Labels

Impact On Various Sectors In India

Ecommerce Maps And Navigation Computer Vision

The introduction of GANs based GAN can be used to generate GAN technology can be used in networks in Business Intelligence images from a semantic map, autonomous vehicles to satellite will make the predictions more collecting samples of images for imaging. accurate and create a more designing training environment for personalised shopping experience. autonomous products like self- driving cars, humanoids, and other bots. Animation / Video Games AI And ML

GAN can auto-generate and The use of GAN will make working colourise anime characters on AI/ML more effective and automatically once trained with a efficient in wide range of series of sample image. application.

01 IQLECT Operational intelligence Karnataka, India S.No. 02 Name Niki.ai Personal assistant Bot Karnataka, India

03 SigTuple AI-powered analysis of visual medical data Location Karnataka, India Application 04 Indian Institute of Science, Ecommerce GAN Karnataka, India Bangalore, and Amazon India

05 Uncanny Vision Security surveillance Karnataka, India

06 Myntra/Flipkart Ecommerce Karnataka, India

As per Inc42 DataLabs there are around 137 startups working on machine learning who have secured significant amount of funding between the year (2014 to 2018).

Niti Aayog estimates that AI/ML is expected to add $1 Tn to indian economy by 2035, this shows that advancement in ML frameworks like GAN should be implemented more aggressively

101 © Inc42 Media | not for distribution According to the report by Organs India and Fortis Organ Retrieval and Transplant, in India, 5 lakh people die every 3D year due to non-availability of organs. By using 3D printed organs in case of transplantation we can reduce the number of deaths caused due to unavailability of organs not only in Bioprinting India but all over the world. According to Gartner, medical 3D printing will have a predicted market value of $1.2 Bn by 2020. Furthermore, Gartner has estimated that 35 percent of surgeries for prosthetics and implants will be performed with 3D printing by 2019 as the materials printed will be more organic in contrast to the ones used right now.

Impact On Various Sectors In India

Orthopaedic Implants Drug manufacturing

The advancement in biomedical 3D printing will help 3D printed drugs will increase drug efficacy, in part, by us overcome the challenge of toxicity and imperfect fit. reducing variability. 3D printing also allows for faster By using bio 3D printers, we will be able to produce pre-clinical evaluations of new drugs and could also more biologically compatible equipments such as be used to allow various iterations of a new drug to be artificial limbs, exoskeletons etc. manufactured more quickly and cheaply. In 2015, the US Food and Drug Administration (FDA) approved the first 3D printed drug, Sprintam which is used for Medical Devices treating epilepsy.

The widespread use of 3D bioprinting will boost the production of more organic internal medical devices such as stents, cardiovascular implants etc.

List Of Organisations Working On 3D Printing

01 Supercraft 3D Additive manufacturing Karnataka,India S.No. 02 Name Fracktal Works 3D printing services and manufacturers Karnataka India

03 3Dexter 3D printing for academics Location New Delhi, India Application 04 IIT Kanpur and IIT Delhi Bone tissues UP, India

05 INDIBIO Bio 3D printers manufacturing Haryana, India

06 Pandorum Technologies Bio 3D printing Karnataka India

As per Inc42 DataLabs, there are around 116 startups working on hardware products( IoT, 3D printing etc.) who have secured significant amount of funding between the year (2014 to 2018).

© Inc42 Media | not for distribution 102 The dream of having a connected world where devices seamlessly ‘talk’ to each other without human intervention can IoT Becomes only be fulfilled if the data security of the various devices is not compromised. As Blockchain is known for its security and immutable nature, it is an ideal fit for Internet of Things (IoT). As IoT gets implemented on a larger scale, the data generated BIoT by the connected devices needs to be store securely.

According to the Bain’s latest IoT research brief, Unlocking Opportunities in the Internet of Things, the IoT sector in 2021 will be worth $520 Bn. Data centre and analytics will be the fastest growing with a CAGR of 50% from 2017 to 2021.

Impact On Various Sectors In India

Real Estate Home Appliances

As the trend moves towards smart homes, the With Indian homes adopting products like Google Home, real estate companies need to start investing in Amazon Alexa etc. for experiencing the smart home revolution. technology as well because in near future, It is expected that 2019 will witness rise in demand for smart buyers would be looking for an advance tech home appliances where products like refrigerator, air structure to optimise the day to day operations conditioners etc. could be more connected and monitored via in townships and apartments. interactive smartphone applications.

Automobile Industry Logistics Industry

One of the biggest industry in India, the The combination of blockchain and IoT is going to make the automobile industry is going through supply chain more transparent so the demand for sensors technological advancements every year be its equipped fleet is going to increase and this is going to have a compatibility with smartphones to better direct impact on the existing logistics industry of India which is performance analytics. With the application of witnessing a surge in startup involvment using technologies IoT increasing day by day, the automobile like BIoT will provide these players with more room for industry is going to be more dependent on innovation and efficiency in fleet management. technology than ever before.

List Of Organisations Working On IoT/BIoT

1 Stellapps Farm optimisation Karnataka, India S.No. 2 Name Smartron IoT software Karnataka, India

3 Covacsis Technologies Factory optimisation Location Karnataka, India Application 4 Carsense Car diagnostic and security Maharashtra, India

5 Ecolibrium Energy Energy intelligence Gujarat, India

6 Sta Twig Blockchain SCM Telangana, India

As per Inc42 DataLabs, there are around 100 startups working on blockchain applications who have secured significant amount of funding between the year (2014 to 2018).

103 © Inc42 Media | not for distribution Bank of America Merrill Lynch sees the space industry growing to $2.7 Tn in next 30 years as per Spacetech its report published in 2017. While Morgan Stanley estimates the space industry to be $1.1 Tn by 2040. These estimates show the potential of space tech as a trillion dollar industry which combines sub-sectors such as space tourism, commercial satellites and rocket manufacturing and more.

Impact On Various Sectors In India

Manufacturing IT

The rise in space technology will open new demands To get optimal results through space exploration, for metal and material manufacturing industries. Till advanced software infrastructure is required. This will now ISRO was the only major player in the country but lead to the formation of a new segment of software now with startups mushrooming in the industry the development projects and new IT companies demand for space compatible metals and materials specialised in space software development. will skyrocket and the established players will have develop new capabilities to meet demand. Defence Maps & Navigation Space tech has also become an area of interest for the defence forces with spacetech paving way for the With the much-awaited launch of NAVICS India development of more sophisticated defence equipment domestic geo satellite, India is gearing up for better and vehicles. On one hand, space technologies while satellite surveillance where homegrown technology is help provide the guidance and precision systems to used the space tech companies will have an opportunity inter-continental ballistic missiles, on the other hand, to bag government contracts in fields like satellite defence also needs to develop anti-satellite weaponry manufacturing, spaceship software etc. systems to counter other countries’ military satellites.

List of Organisations In Spacetech

01 Team Indus Rocket manufacturing and satellite Karnataka, India launching S.No. Name 02 Dhruva Space Small satellite launch systems and devices Karnataka, India Location

03 Antrix Corporation, Application Commercial space-tech services Karnataka, India commercial arm of ISRO

04 Astrome Technologies Satellite Technology Karnataka, India

05 Exseed Space Satellite manufacturing Maharashtra, India

06 Manastu Space Technologies Green propulsion system Maharashtra, India

© Inc42 Media | not for distribution 104 With 9 out of 10 most polluted cities are Indian, India desperately needs more and more electric vehicles (EV) on EV Battery its roads. And, despite the lack of a clear EV policy and plan, electric vehicles has been an area of interest for entrepreneurs with startups like Ather Energy, Reva (now a subsidiary of Mahindra), ION Energy and others redefining Management the supply and demand game.

In the context of the Indian market, electric vehicles System adaptation can only reach its full potential if the proper infrastructure for charging stations is provided along with attractive subsidies by the government for encouraging the purchase of electric vehicles, as of now 20% of cost is said to be subsidised on the purchase of EVs but lack of charging stations around the country seems a bigger roadblock than price in this case. This is why Accenture has placed India in the hesitators’ category in a market effectiveness matrix presented in a 2016 report. Impact On Various For the success of EVs which deploy electric motors instead internal combustion engines, battery packs are the most crucial part of the game to succeed. We recently have Sectors In India seen how government officials of Ministry of Power have refused to use electric cars purchased from Tata Motors and Mahindra. The officials cited battery packs of power Automobile Industry design failed to run even 80 Kms after full charge.

As the push for electric vehicles continues the automobile manufacturers will be forced to equip their products with lithium-ion batteries. This also evident from the fact that as per the orders of Public Transport Supreme court BS 6 norms are going to be in play from 2020 which will give a major push to the As we move towards clean energy the CNG dominated demand of electric vehicles provided the high-cost public transport sector is also likely to take a hit as after the petrol which would be the alternative to e vehicles in abolition of petrol and diesel from this sector, in the near the future, more than the 4W manufactures the 2W future it won’t be surprising to see CNG having the same manufactures are more likely to be affected. fate as its predecessors.

List Of Organisations Working EV Battery Management System

1 Ather Energy EV hardware Karnataka, India S.No. 2 Name Emflux Motors E-Super bikes Karnataka, India

3 Mahindra & Mahindra E- public transport Location Maharashtra, India Application 4 Ashok Leyland E-trucks,e-buses Tamil Nadu, India

5 Mahindra & Mahindra Limited E-cars, E-vans, E-autos Maharashtra, India

6 ION energy Lithium-ion batteries Maharashtra, India

7 Hero electricals E-bikes New Delhi, India

8 Tata motors E-vehicles Maharashtra, India

In this section, we are going to compare the Indian startup ecosystem with other emerging ecosystems in countries like Israel, Indonesia and China. To get an understanding of where we stand on the global scale.

Funds Of Funds

India $1.4 Bn funds launched by the government of India to ensure sufficient funding for startups emerging in various social and Startup India Action Plan economic sectors, along with an emphasis on tier 2 and 3 cities. Startup India Action Plan: Program launched to promote entrepreneurship among people from different backgrounds with an aim to establish a globally recognized startup MUDRA Loans ecosystem in India, this initiative provides benefits like tax exemption, financial assistance etc. Its basic purpose is to attain development in an inclusive and sustainable manner by supporting and promoting partner institutions and creating an ecosystem of growth for Atal Innovation Mission microenterprises sector.

The Atal Innovation Mission (AIM) is a flagship initiative set up by the NITI Aayog to promote innovation and Innovators Growth Platform by SEBI entrepreneurship across the length and breadth of the Innovators Growth Platform by SEBI: To enable listings of country, based on a detailed study and deliberations on new-age companies and startups, SEBI has proposed a new innovation and entrepreneurial needs of India in the years customised framework to enable startups and emerging ahead. companies to raise funds from the public.

Israel R&D Funds: Bi-National And International Technological Incubator Program by the Funds Ministry of Industry and Trade

The state of Israel has joint research funds with the various It offers Incubation infrastructure for Israeli startups in early potential countries. These funds require collaborative stage projects between researchers from the respective countries. Unit 8200 Research Foundations in Universities Unit 8200 is an Israeli Intelligence Corps unit responsible for These foundations are responsible for patenting, technology collecting signal intelligence and code decryption. It takes transfer and commercialisation of technologies developed the most brilliant youth with the best analytical capability. within their respective institutions. SOSA (South of Salame)

It’s a global open innovation platform, connecting corporations to disruptive tech startups.

The initiative aims to foster 1000 startups by the end of 2020, A peer-to-peer platform where entrepreneurs and investors the total valuation for which is expected to be around $10 can connect with each other. In addition to that, the Bn. The programme has included workshops, hackathons, administration has also appointed four ministries to boot camps, and incubation programmes that will be carried coordinate all entrepreneurship related issues in Indonesia. out across ten large Indonesian cities in the coming year. Negative Investment List PENSA (Program for Eastern Indonesian Small and In order to maintain a balance between local and foreign investors, the Negative Investment List has ventures/areas Medium Enterprise Assistance) that are restricted for foreign investors in order to provide a platform to homegrown, Indonesian business owners for It provides small business owners with necessary financial establishing their business. assistance in collaboration with the International Finance Center (IFC). IFC is an international organisation which helps SMEs by providing them with a slew of financial solutions.

China R&D Funds: Bi-National And International Technological Incubator Program by the Funds Ministry of Industry and Trade

It’s a global open innovation platform, connecting corporations to disruptive tech startups.

In this graph we can observe that Israel and India, Israel, China and Indonesia China are constantly increasing in the innovation output index which measures the impact generated by the innovations done in a country. While, India seems lagging in Innovation this as well one of the reasons behind this could be the slow adaptability of innovation in India which has been explained in detail in Output Index the “Impact analysis” section of this report.

INDIA INDONESIA CHINA ISRAEL

90 2013 2014 2015 2016 2017 2018

Average % change in 01 China + 13.81% 02 Indonesia 4.78% Innovation output index - 03 Israel - 6.71% 2013 to 2018 04 India - 8.6%

© Inc42 Media | not for distribution 110 The following graphs below show a comparison of India with other emerging countries on the global index scale where the numbers are percentages of global indexes.

India Vs Indonesia

*Global Enterpreneurship Index Rank *In the graph below, all the values are in percentage except the Rank

68 Global Rank 2017 94 15 Risk Capital 14 42 Internationaliation 1 19 igh Growth 7 53 Progress Innovation 20 100 Product Innovation 58 61 Competition 25 29 uman Capital 16 5 Technology Absorption 8 33 pportunity Startup 31 14 Cultural Support 31 14 Networking 61 40 Risk Acceptance 23 22 Startup Skills 29

India 34 pportunity Perceptin 25 Indonesia

*Heritage.org *In the graph below, all the values are ranks on the indexes

143 World Rank 2017 84 53 2017 Net Score 62 40 Financial Freedom 60 40 Investment Freedom 35 73 Trade Freedom 81 75 Monetary Freedom 74 42 Labor Freedom 49 53 Business Freedom 49 11 Fiscal ealth 90 77 Govt Spending 90 77 Tax Burden 84 44 Govt Integrity 45 44 Judical Effectiveness 39

India 55 Property Rights 48 Indonesia

*Global Enterpreneurship Index Rank *In the graph below, all the values are in percentage except the Rank

68 Global Rank 2017 43 15 Risk Capital 100 42 Internationaliation 31 19 igh Growth 87 53 Progress Innovation 76 100 Product Innovation 100 61 Competition 33 29 uman Capital 52 5 Technology Absorption 25 33 pportunity Startup 27 14 Cultural Support 33 14 Networking 51 40 Risk Acceptance 47 22 Startup Skills 24 34 pportunity Perceptin 14 India China

*Heritage.org *In the graph below, all the values are ranks on the indexes

143 World Rank 2017 111 53 2017 Net Score 57 40 Financial Freedom 20 40 Investment Freedom 20 73 Trade Freedom 74 75 Monetary Freedom 72 42 Labor Freedom 63 53 Business Freedom 54 11 Fiscal ealth 93 77 Govt Spending 73 77 Tax Burden 70 44 Govt Integrity 42 44 Judical Effectiveness 61 55 Property Rights 48 India China

*Global Enterpreneurship Index Rank *In the graph below, all the values are in percentage except the Rank

68 Global Rank 2017 16 15 Risk Capital 91 42 Internationaliation 60 19 igh Growth 80 53 Progress Innovation 100 100 Product Innovation 100 61 Competition 22 29 uman Capital 74 5 Technology Absorption 100 33 pportunity Startup 64 14 Cultural Support 64 14 Networking 79 40 Risk Acceptance 47 22 Startup Skills 49 34 pportunity Perceptin 71 India Israel

*Heritage.org *In the graph below, all the values are ranks on the indexes

143 World Rank 2017 36 53 2017 Net Score 70 40 Financial Freedom 70 40 Investment Freedom 75 73 Trade Freedom 88 75 Monetary Freedom 85 42 Labor Freedom 64 53 Business Freedom 70 11 Fiscal ealth 72 77 Govt Spending 51 77 Tax Burden 61 44 Govt Integrity 48 44 Judical Effectiveness 82

India 55 Property Rights 72 Israel

Although India has initiated lots of schemes to improvise the startup ecosystem, the expected impact of these schemes is still missing because of the following reasons.

Implementation of these schemes is not monitored adequately this is evident from the fact that most of the schemes like MUDRA, Fund of Fund and Startup India as well has not provided any significant success stories, also there is no report or study released by the concerned department regarding the progress of these funds. In a nutshell, more transparency from the government’s end is still lagging.

The population has always been an acceptable excuse for governments failure in various aspects but if we compare the average change in innovation output index which depicts the output generated by innovation in society China is leading the wave with +13.81 % whereas India has been left far behind with -8.6% change in the ranking from 2013 to 2018.

The Special economic zone created by the government to promote startups is not performing up to its expectation because of the plethora of reason like unavailability of a quality workforce, located on extreme outskirts of the city, unavailability of living space etc. for instance the so-called fintech valley in Vizag has only a handful of startups working in domains different from fintech while the vision behind its creation was to establish an ecosystem to boost financial technology innovation in the country so far there is no single breakthrough in fintech which has emerged from the fintech valley in Vizag, Andhra Pradesh. While similar SEZs created by China (eg. innoway), Israel (e.g. Unit 8200) have already served the purpose for which they were established.

In this section of the report we will take a look at at the social and economic contributions made by the startup ecosystem to the Indian society. We will also highlight the unaddressed problems which require immediate action.

Let us take a look at how startups are now contributing to our economy

Funded startups in India have contributed 0.44% to the total GDP (nominal) which is $2.84 Tn in 2018 taking into account all the economic activities involved in startups such as expenditure, job creation,social development etc.

Funded startups in India have contributed 0.12% to the total GDP (PPP) which is $10.38 Tn in 2018

Startups have contributed 5.95% to the total Nominal GVA at the basic price in 2018

FDI contribution by startups in India 2014 to 2018

Year % contribution to total FDI % contribution to sector-specific FDI**

2018 7.25 24.16

2017 12.41 35.76

2016 8.25 21.29

2015 12.94 48.54

2014 9.79 52.65

*Source: Inc42 DataLabs, Economic Survey 2017-18 *Specific sectors:**Service,CS& Hardware,Hotel & Tourism,Info and Broadcasting and Consultancy service

In this part of the report we will be presenting a comparative analysis of the available solutions in contrast to the required solutions on the basis of social and economic problems Cleantech existing in the Indian society. With climate change costing the Indian economy $9 Bn to $10 Bn annually (according to agriculture ministry), Electric Vehicles cleantech has become an utmost necessity for India. Though India was 100% electrified in 2018 going by the parameters set under the DDUGJY (Deen Dayal Air pollution is becoming a major issue in most of the Upadhyaya Gram Jyoti Yojana). Still a large part of metro cities in India one of the contributing factors to population in rural areas has to do without electricity. As this menace is the pollution from automobiles. To per World Bank’s “Access to electricity list” only 84.5% counter this problem the Supreme Court has ordered of the total population of India has access to electricity. the adoption of BS 6 norms by 2020 to minimise air In this context role of startups such as Husk and Onergy pollution. The Indian government is also promoting the is plausible as they are working to provide clean use of electric vehicles and natural gas-powered electricity using renewable and easily accessible vehicles. One fine example of this is the mandatory use resources such as rice husks and solar power of CNG vehicles for public transport and cabs in major respectively. cities. Also, the government has started the Automotive Mission Plan (AMP) commonly dubbed as india’s EV vision for 2030 which aims at making safe, efficient and affordable electric mobility of people and transportation of goods in India. Farmer’s Distress

According to a Greenpeace report, 1.2 Mn people in According to the Economic Survey of India 2017-18, India die annually due to air pollution and air pollution more than 50% of our population is dependent on costs India nearly 3% of its annual GDP. agriculture and related activities for employment, which makes agriculture an important sector of the Indian As per “Road Transport Year Book 2012” the majority economy. Unfortunately the number of suicides share of pollution is caused by the two-wheelers at committed by farmers annually is 12,244 as per the data 71.8%, followed by four-wheelers which stands at provided by National Crime Records Bureau (NCRB). 13.6%. Another fact presented in the report was that indebtedness and bankruptcy was the major reason for suicide committed with the percentage share of 38.7%

The most significant reason for indebtedness and Waste Management bankruptcy is the low price which the farmers get for their yield along with natural factors such as a decrease From waste disposal to waste collection, the entire in rainfall and destruction of crops due to pest attacks. system of waste management is a complete mess in the country. This has lead to the menace of waste born Moreover, close to 55 per cent of the current area under disease like Malaria, Zika, Tuberculosis etc. which has a cultivation is dependent on rainfall for irrigation. This counter-productive impact on the society. results in low productivity and high risk to production due to erratic rainfall as per the report titled “ Initiatives India generates over 150,000 tonnes of municipal solid and Strategies for the Development of Agriculture in waste (MSW) per day, with Mumbai being the world’s India” published by Niti Aayog. fifth most waste generating city. Yet, only 83% of waste is collected and less than 30% is treated. According to As per the international norms, a country is classified as the World Bank, India’s daily waste generation will reach “Water Stressed and Water Scarce” if per capita water 377,000 tonnes by 2025. availability goes below 1700 m3 and 1000 m3 respectively. With 1,544 m3 per capita water Out of 82,607 wards, 51,734 now have 100% availability, India is already a water-stressed country and door-to-door waste collection as of 2018. This indicates fast-moving towards turning into a water scarce nation. a waste collection coverage of only 62.62%. To fill the gap left behind by our municipal authorities startups like At present, irrigation consumes about 84 per cent of POM POM, Attero etc. are proactively working to build total available water. Industrial and domestic sectors a robust waste collection network covering every ward, consume about 12% and 4% of the total available water, but to counter this problem an inclusive approach respectively. With irrigation predicted to remain the involving all the stakeholders of society from the people dominant user of water, the government’s ‘per drop to the government is required. more crop’ is an imperative.

01 Husk power systems Rural electrification

S.No. 02 ONergy Solar energy

03 POM POM Doorstep waste collection

04 Startup Name Attero E-waste recycling

05 Ather Energy E 2 wheelers Problem Addressed Problem 06 Emflux E super bikes.

Conclusion

If we observe the available data we can conclude that India is doing a significant amount of work to create social impact through policy and technology. For example the successful adoption of electric vehicles is partly due to the inclusive approach which is being implemented where both the society and the government are on the same page. This same approach needs to be followed in all the mentioned sectors if we want to eradicate these bottlenecks in the social development streak.

On the issue of farmer distress, we have seen some In the context of waste management, while preference success stories through agritech but the trickle down is being given to plastic waste management, there is effect of these technologies is still small as the most also a rising problem of e-waste. E-waste is one of the exploited class of farmers aren’t the ones with large land fastest growing waste streams in the world. The Global holdings. They are the ones who grow crops, not to E-Waste Monitor estimates that 44.7 Mn tonnes (mt) of accumulate profits but just to meet their daily needs. e-waste was generated in 2016. India was the fourth- One of the major reason why the trickle down effect of largest generator (2 mt) in 2016. As Indians spend more agritech is not benefiting the marginalised farmers is on electronic items and appliances with rising incomes, because of the lack of awareness about these e-waste is expected to continue to grow rapidly. A study developments in among farmers, So startups are by ASSOCHAM and NEC finds that a mere 5% of India’s collaborating with the local government in states like e-waste gets recycled, much less than the global Andhra Pradesh, Rajasthan, Jharkhand, Bihar and UP recycling rate of only 20 per cent; 95 per cent of India’s where the population of landless farmers is comparatively e-waste is managed by the unorganised sector higher. (kabadiwalas, scrap dealers and dismantlers) using dangerous methods to recover metals from circuit boards and wires. There are close to 200 e-waste recyclers in India which are licensed by the CPCB. Formal sector recyclers face stiff competition from informal operators who get away without following the regulations. Authorised recyclers incur large overhead costs for mandatory infrastructure for construction and equipment and the official and unofficial costs of compliance with multiple regulations. This highlights the need for formal surveillance of the waste management industry especially the e-waste so that the informal players don’t have an unjustified advantage over the formal players.

In contrast to Israel and China, India lags behind in the field of water purification. We need more startups like Uravu, AMRIT (Arsenic and Metal Removal by Indian Technology) which have developed frugal technologies for water purification.

INDIA RUSSIA SOUTH AFRICA CHINA BRAZIL

90 2013 2014 2015 2016 2017 2018

This graph, we have visualised the Global Innovation Here we have visualised the Y-o-Y index change from Index which is published by INSEAD and World 2013 to 2018 of the group of developing nations called Intellectual Property Organization (WIPO), which BRICS. As you can see China’s progress has been the measures the innovation progress of nations on the best among all the BRICS nations. China’s percentage basis of three parameters — Innovation input index, change in the index position from 2013 to 2014 has innovation efficiency index and innovation output index. been +51.4% ,+25.8% for Russia but only +16.6% for This is presented in this graph to provide a comparative India. analysis of India’s innovation progress in contrast to fellow BRICS members. The average percentage change on Y-o-Y basis from 2013 to 2018 has been shown in the table.

The average percentage change on Y-o-Y basis from 2013 to 2018

01 China (+)13.3% Overall China can be termed as the most innovative country among the BRICS nation, with Russia coming in second and India at the third position.One of the main reasons for S.No. 02 Russia (+) 5.31% India’s lagging position is the slow pace at which new technology is adopted by the Indian society. 03 India (+) 2.17% This is evident from the fact that the mobile wallet user base 04 Brazil (-) 0.27 % in India rose exponentially only after the demonetisation Avg % Change Avg Country Name which highlights an important characteristic of Indian 05 South Africa (-) 0.37 % society, which is that for a technology to reach critical mass in the Indian economy, government intervention is necessary.

119 © Inc42 Media | not for distribution We have discussed another example of this phenomenon in the case of electric vehicles adoption, where government intervention has been one of the major driving forces.

India v/s Israel Innovation effeciency index

INDIA ISRAEL

70 2013 2014 2015 2016 2017 2018

Another interesting fact presented by the Global Innovation Index is that India’s innovation efficiency ranking has declined by a whopping 345.4% from 2013 (11th position) to 2018 (49th position), with plunge in rankings after the regime change in 2014. Meanwhile Israel which has one of the toughest geopolitical situation has managed to increase its ranking by 63.15% from 2013 (38th position) to 2018 (14th position).

So far from (2013 to 2016) we have witnessed a steep decline in innovation efficiency.The trendline of India, after 2016, seems to be decreasing.

We observed a similar case, when we analysed the innovation efficiency of India in comparison to other BRICS nations. We found that China again has the highest progress in innovation efficiency index with a change of (+) 78.57% from 2013 to 2018, followed by Russia with (+) 25.96% and South Africa with (+)16.6%.

INDIA RUSSIA SOUTH AFRICA CHINA BRAZIL

100

120 2013 2014 2015 2016 2017 2018

The average percentage change of Innovation efficiency index for BRICS on YoY basis from 2013 to 2018

01 South Aftric (+) 3.22%

S.No. 02 Russia (+) 0.81%

03 Brazil (-) 5.64% in Ranking

04 China (-) 14.76 % Avg % Change Avg Country Name 05 India (-) 52.32 %

Startups in 2018 accounted for 2.64% of the total jobs created in Impact on India. As of 2018, the delivery executive job profile is on the rise and is employing over 185,000 people. This has been driven by major ecommerce, hyperlocal and logistic giants such as Flipkart, Swiggy, BigBasket, Delhivery etc. Jobs While startups are expected to create a large number of jobs in the years to come, the biggest threats to startup jobs per a study published by Stanford will be the uncertainty of long-term sustainability associated with startups which creates a risk of unemployment. For instance, when startups shutdown or start running out of funds they usually tend to lay off employees to minimize their financial overheads. For example Snapdeal was forced to lay off 80% of its workforce in 2017. The Stanford study said that while some young firms enjoy significant revenue and job growth, those gains are substantially offset by losses in other firms. Among companies in their fifth year, for example, total job destruction — declines in headcount among retrenching As more startups are incorporated, companies — amounted to 65% of all the new jobs created in that more jobs are being added. In this year. section of the report we will be analyzing the contribution of startups According to Inc42 DataLabs estimates, total job created by startup towards job creation in India. Also, we would be between 200,000 to 250,000 in 2019. will highlight the expected increase in employment in 2019, with estimates Empirical evidence in the World Bank report “Who creates jobs” from Inc42 DataLabs. shows that there is a very strong link between startups, especially small enterprises, and job growth in India which means that there is a positive correlation between employment growth and startups incorporated. The higher the startup growth, the higher the number of jobs created in an economy.

Just like any other country, gender inequality is prevalent in the Indian startup employment scene as well.This is evident from a study done by an organisation named “Gender gap grader” which analysed the job postings on AngelList and concluded women represent only 9% of developers, 4.2% of software architects, 11.3% of entrepreneurs.

6 2 8%

M a le d ye lo p 5 m 8 e . n 9 U

1 . 8 3 4 o 7 e 2

d %

2 e

4 India BRICS m .

4 a

l e

e d m e

e 4

n 1

e 5

y e d

5 .6 M ale India BRICS

*Source: International Laobour Organization and Inc42 DataLabs

ed oy 6 pl 5 m . e 5 n 6 U . E 1 m 1 p . l 8 o M 4 y e a

d l e

India China

. 9

E 5 m . 6 p d

lo e y y e lo M d p a m l e e Un 34.3

24 .4 F emale India China

5 8 1% M a le

ed oy 5 pl 5 m .2 e n

U 4 1 1 . o 9 8 4 % e d

2 a

4 India Brazil

5 F

e 1

. 9 4 a

l 4

e . 8

p n

l e

e o

d e d

5 .6 M ale India Brazil

*Source: International Laobour Organization and Inc42 DataLabs

d ye lo p 60 m . e 2 n U 4 8 1 . 7 8 o

4 % e

2 a

. e

4 India Russia

F 5

a 9

l 3

e 9

o n e

e d

5 .6 M ale India Russia

563% M ale

4 3 7 d ye 39 % lo .8 p m F e e n m U a o l e 1 e . d 8

4 .

South India

F Africa

m 5

a 1 d l e . e 9

o E m e p n lo y e d 5 .2 . 0 6 6

M a le South Africa India

*Source: International Laobour Organization and Inc42 DataLabs

© Inc42 Media | not for distribution 126 The meteoric rise of the Indian Startup Ecosystem has triggered a series of policy Changes changes, ranging from taxation Policy to FDI. Here are some of the policy formulations and changes that have been implemented or initiated to boost and regulate the startup ecosystem:

Tax Exemption

Startups based in India are provided tax exemption An “eligible startup” is a company or LLP incorporated for 3 consecutive years out of 7 years beginning from between April 1, 2016, to March 31, 2019. It should the year of incorporation. This provision comes under not have a total turnover of more than INR 25 Cr per Section 80-IAC, inserted in 2018 to the Income tax Act annum between April 1, 2016 to March 31, 2021. It to provide 100% deduction of the profits derived by an should have a certificate of eligible business from the eligible startup from a business involving innovation Inter-Ministerial Board (IMB) of Certification.as a development, deployment or commercialisation of new Company or an LLP. products, processes or services driven by technology or intellectual property. The said benefit is available to an eligible startup.

Exemption on Capital Gains Tax

The new Section 54EE of the Income Tax act 1961 inserted to provide long term capital gains tax exemption if capital gains proceeds are invested by an eligible taxpayer in units of the specified fund set up exclusively for startups. The maximum investment allowed up to INR 50 lakh.

Viability

The tax exemption condition which applies only for turnover up to 25 crores can be counterproductive, given that potential startups grow at an exponential Rate During there early stage and can surpass the 25 crore mark quite early then the provided 7 years span. In case if the startup plans its growth keeping. In mind the limits provided it won’t be able to grow at its full potential which could hinder economic factors like Job creation, economic value added(EVA) Industry and innovation, these factors will have a direct impact on our Global Performance indicators such as GDP, HDI, Innovation Index, and gross national per capita income(GNPI). Overall slowing the pace of growth Indian startup ecosystem.

127 © Inc42 Media | not for distribution Ease of FDI norms FDI norms have been made more simpler along with limits on the percentage of equity owned by foreign investors and the entry route of FDI as well. Sectors like e-commerce, credit information companies (CIC), pharmaceuticals (green field) and white label ATM operations etc have an automatic entry route for 100% FDI,whereas some sectors like single- brand retail trading, pharmaceuticals (brownfield), etc, have to go through government’s permission after a certain percentage. Ease of FDI norms in various sectors

01 E-commerce activities (E-commerce entities would engage only in Business to 100% Automatic Business (B2B) E-commerce and not in Business to Consumer (B2C) E-commerce.)

02 Sector Single Brand retail trading 100% Automatic up to 49%

Local sourcing norms will be relaxed up to three years and a relaxed sourcing regime FDI Limit Above 49% under for another five years for entities undertaking Single Brand Retail radingT of products Government route having ‘state-of-art’ and ‘cutting edge’ technology. Entry Route

03 Credit Information Companies (CIC) 100% Automatic

04 Pharmaceuticals(Green Field) 100% Automatic

05 Pharmaceuticals(Brown Field) 100% Automatic up to 74% Above 74% under Government route

06 White Label ATM Operations 100% Automatic

07 Food products manufactured or produced in India 100% Government Trading, including through e-commerce, in respect of food products manufactured or produced in India.

In a press statement released on December 26, 2018, the DIPP made a few amendments in the Consolidated FDI Policy Circular of 2017. The new rules will come into effect from February 1, 2019. The Consolidated FDI Policy Circular of 2017 was released in August 2017.

The major changes are

An ecommerce marketplace will no longer be able to mandate any seller to sell any product exclusively on its platform only.

An ecommerce vendor/seller having control on its inventory by ecommerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.

The new ecommerce rules make it very clear that the cashbacks or discounts provided by group companies of an ecommerce The US-India Strategic Partnership Forum marketplace entity to buyers shall be fair and non-discriminatory. (USISPF) stated that the new ecommerce rules For the purposes of this clause, provision of services to any vendor are regressive and that they could potentially on such terms which are not made available to other vendors in harm consumers. similar circumstances will be deemed unfair and discriminatory. Under these rules, Walmart (which owns Flipkart The ecommerce marketplace entity will be required to furnish a in India) and Amazon India — both US companies certificate along with a report of statutory auditor to the Reserve — may be the hardest hit as they depend majorly Bank of India, confirming compliance of the above guidelines, by on sellers such as Cloud Retail, Appario, and WS September 30 of every year for the preceding financial year. Retail.

Aimed to support and encourage innovations and patent registrations, the Financial Act, 2016, has added a Section 115BBF in the Income Tax Act. According to Section 115BBF, the tax rate is as low as 10% for royalty income derived from worldwide exploitation of patents developed and registered in India. This provision will boost the registration of patents in India, which holds the 7th position worldwide as per the World Intellectual Property Organisation (WIPO), most of the patents by Indians are registered outside India. The application of taxes only includes patents and does not consider any other intellectual property such as trademark, copyright, etc looks like the primary focus of this policy is to encourage and divert people towards research and innovation.

Policies on aviation and defence sectors:

Irrespective of most of the countries either banning or restricting the usages of drones, India on the other side has a paved path for new possibilities by being the first to introduce a No Permission – No Takeoff (NPNT) clause where a drone’s hardware is configured not to takeoff unless regulatory permission is given. All the drones are classified as Nano (less than or equal to 250 grams), Micro (250 grams to 2 kg), Small (2 kg to 25 kg), Medium (25 kg to 150 kg), and Large (greater than 150 kg) and drones size bigger than Nano must require a unique identification number (UIN) from the aviation regulator and Bigger drones will be required to obtain an Unmanned Aircraft Operator Permit (UAOP), similar to a driver’s license which will be valid for five years . Implementing of these policies will create a high trust environment which will lead to the creation of new ventures to invest in.

And coming to the defence sector in order to encourage new startups and small to midsize enterprises to contribute in the dense production, Ordnance Factory Board (OFB) and all Defense Public Sector Undertakings (DPSUs) have been mandated to follow the guidelines of Ministry of MSME. Under the new Defence Procurement Procedure (DPP) 2016 promulgated in April 2016, the procedure provides 90% of expenses by the government where project cost is not exceeding by 10 crores (government funded) and 3 crores (industry funded). The government has recently approved of new funding like Defense Innovation Fund (DIF) and Technology Development Fund (TDF) which aim to create foster innovation and technology ecosystem in the defence industry.

Extending FAME On An Adhoc Basis

Back in 2013, the government had unveiled the National Electric Mobility Mission Plan (NEMMP) 2020. The plan aimed to deploy around 7 Mn hybrid and all-electric vehicles in the country by 2020. In order to meet the NEMMP target, on March 31, 2018, the Department of Heavy Industry (DHI) had announced a scheme namely FAME-India (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India). Phase I of the scheme was implemented for two years, starting from April 1, 2015. Later, FAME-India Phase I was extended by six months to September 1, 2017, then for another six months to March 31, 2018, and a third time to September 30, 2018. Effective October 1, 2018, FAME-India Phase I was extended to March 31, 2019. However, some restrictions have also been put into place. For instance, EVs not requiring any registration will be excluded from the scope of the scheme, irrespective of the type of battery used in the vehicle.

Even though the Indian startup ecosystem has been ranked as the third largest in the world, there are a lot of roadblocks Absence Of Indian that are hampering its growth. Being a developing country, India has various economic and structural challenges that Universities In The Startup needs to be addressed for healthy and sustainable development of the startups in India. Ecosystem

Here are some of the roadblocks India needs to overcome to power ahead on the road to startup success: Although the government has made some efforts to include universities and schools in the ecosystem through the Atal Innovation Mission (AIM), the outcome has not been as expected due to the lack of efficient management of the programme. Here are the problems with AIM:

The absence of effective management still remains a big issue

This absence of effective management has not been producing expected results and universities are lagging behind in the education space except for a few premier universities that are located in Tier 1 cities. A more inclusive approach is required so that the benefit of this scheme can trickle down to all sections of the society.

Incubators other than premier ones are not able to generate the requisite results to boost the culture of innovation and entrepreneurship, despite having good traction from interested and enthusiastic entrepreneurs.

The much-hyped ‘New India Challenge’, an initiative to encourage startup participation in 17 sectors of national importance, is not favourable for early-stage startups as the eligibility criteria mentioned on their website does not correlate with early-stage startups. For instance, some of the criteria mentioned are the startup must have a registered patent, an academically published paper on the idea, etc.

Deep discounts and cashbacks have been the driving force Section 115BBF of the Income Tax Act, 1961 proposes behind the penetration and exponential growth of that royalty income derived from worldwide exploitation ecommerce in India. The draft Ecommerce policy was of patents developed and registered in India be taxed at formulated in 2018 to end the monopoly of the nexus the rate of 10% to promote registration of patents in between ecommerce marketplaces and their associated India. brands. If approved, the policy will take away the certain advantage of mar have over traditional retailers because it But, despite increased legal protection, copyright will make it difficult for ecommerce players to provide infringement is still rampant in India due to lax attractive discounts to their customers. administration and enforcement practices and is not in line with many developed economies. Here are some of the Impact of the Bill: This is evident from the fact that India’s overall score improved only marginally in the fifth edition of a Global Intellectual Property Index compiled by the US Chamber Vendors that are in equity partnerships with of Commerce and published in 2017. The annual index, e-commerce/marketplace players can’t sell their printed along with a report entitled ‘The Root of products on that specific platform. For example, Innovation’, gave India a score of 8.75 out of 35 in 2017 Cloudtail, a joint venture between N R Narayana — a moderate improvement as compared to 7.05 in 2016 Murthy’s Catamaran Ventures and Amazon, will no — citing “fundamental weaknesses” in the country’s longer be able to sell on amazon.in. intellectual property framework. The inventory of a vendor will be deemed to be The index scores countries in six categories: patents, controlled by the e-commerce marketplace entity if copyrights, trademarks, trade secrets and market access, more than 25% of the purchases of such a vendor are enforcement, and ratification of international treaties. from the marketplace entity or its group companies. India still ranks a poor 44 out of 50 countries in 2018. This will prevent any brand or supplier aligning exclusively with one marketplace, as is usually the case with mobiles or white goods.

We can expect a decline in cashbacks and discounts, which have been the driving force for online portals The Surveillance Order From and provide them an edge over traditional retailers. Deep discounting is one of the most effective The Ministry of Home Affairs marketing techniques for e-retailers and online players and has benefitted them in reaching larger masses. Now, this won’t be possible as the monopoly of exclusively associated ecommerce brands, which An order that grants authority to 10 central agencies — provide them with the margin for discounts, will end. including the Delhi Commissioner of Police, the Central Bureau of Investigation (CBI), and the Directorate of Programmes such as Amazon Prime and Flipkart Revenue Intelligence (DRI) — to pry on individual Fulfilled will be affected by the E-retailers Cap Bill. computers and their receipts and transmissions for the This will affect the performance parameters — quality, purpose of homeland security, is being seen as a threat to faster delivery, etc — of these programmes by privacy by many. Agencies such as the Delhi Police, the ecommerce companies. CBI, and the DRI can’t strictly be termed as organisations concerned with homeland security. Also, the proposed data localisation mandate of the RBI for financial transactions is going to add an additional financial overhead for existing fintech players.

This surveillance order is going to affect startups working on data security with technologies such as encryption and privacy-focused products as the order by the Ministry of Home Affairs makes them liable for scrutiny on the pretext of homeland security.

There is still no clarity about the fate of angel tax in Due to lack of adequate skilled talent in the country, India as there is no official law in place till now. Only startups often face a problem in hiring the right an order has been issued by the Central Board of resources to drive innovation. This results in many of Direct Taxes (CBDT) about the discounted cash flow them registering their entities outside India, where a (DCF) method used for startup valuation. This widely skilled and efficient talent pool is easily available. accepted method of enterprise valuation is not accepted by tax assessing officers (AOs) of the Indian Also, startups don’t offer too many employee benefit government’s Income Tax (I-T) Department, even in schemes such as medical insurance, transport facility, case of startups recognised by the Department of etc, which makes it difficult for them to attract quality Industrial Policy and Promotion (DIPP.) talent. The benefits provided by established corporates outshine the ones provided by startups. The government needs to establish clarity about the status of angel tax as the policy limbo will deter angels from making early-stage investments, which are considered the building blocks for startups.

Besides, startup entrepreneurs have been rallying for the abolition of angel tax, but so far, only a notification for temporary exemption for startups from angel tax has been issued by the CBDT. This means there is still room for scrutiny of the valuation method used by startups by the I-T department of India.

Some other problems hindering the growth of the startup ecosystem are

Lack of home-grown late-stage funds

Lack of inter-ministerial coordination, which keeps delaying policy reforms such as EV policy, angel tax exemption, and so on

Lack of entrepreneurial syllabi in schools unlike in other countries such as Japan, Israel, Belgium, Denmark, and Estonia

Policy implementation issues: Many Indian states such as Bihar have released their startup policies, but entrepreneurs complain it takes months and months of processing to tap their benefits as the process is still completely offline

S FUNDING AMOUNT DEALS

14 1400 ILLIO N B 12 1200 N I 10 1000

8 800

6 600

4 400

2 200

0 0 2014 2015 2016 2017 2018 2019 (p)

Top Sectors Top Hubs

Fintech will continue to be the top sector given its Delhi-NCR, Bengaluru, and Mumbai will continue to be expected market size of $2.4 Bn by 2020 and the the top startup hubs in 2019 scope of digitising the traditional structure of financial service market segment. Chennai, Hyderabad, and Pune were emerging hubs in 2018 and will be prominent startup hubs in 2019 Ecommerce will attract big-ticket funding in the growth and late stages. With the entry of Walmart and IKEA Ahmedabad, Jaipur, and Kochi are the upcoming hubs into the Indian ecommerce and retail space, Indian for 2019 ecommerce startups will look to attract bigger funds to compete with global players. Jobs Edtech will attract more funds given the expected market scope of e-learning is $1.96 Bn by 2021. Startups are expected to create 200,000 to 250,000 Deeptech startups are going to be the highlight of new jobs (direct and Indirect) in 2019 2019, especially in the hardware and IoT Space. This sector has already seen a 21% rise in funding in 2018. Consumer startups are expected to make increased While blockchain was quite overhyped in 2018, with contribution to indirect job creation as they foray into more clarity on the policy and regulation front, Tier 2 cities blockchain and distributed ledger technologies will find increased adoption in 2019.

The expected funding for 2019 is $13.5 Bn through 936 Election 2019 deals. However, the funding gap observed in 2017 and 2018 will continue in 2019 with a handful of startups The BJP government has been quite bullish about attracting a major portion of the funding. startups and has contributed significantly to their growth with central and state startup policies, grants, Investments will be driven mostly by VCs, corporates, funds, and incubation support. Any change in the and angel networks, as observed in 2018. The political party at the center is expected to affect the avoidance of the ‘Spray and Pray’ approach of funding extent of government backing for startups. will continue into 2019. The angel tax will remain a topic of concern for startups and investors. The provisions made for angel tax in the interim Budget may not be carried forth in the full Global Investments Budget in case there is a change in the political party forming the government at the Centre. Funding for indian startups, which was largely driven by VCs from the US and the EU, is set to change. The gears have been set in motion as observed in 2018. Investments are expected to increase from China and M&As Japan with VCs and corporates such as Softbank and Tencent showing increased interest in India. M&A deals in 2019 are expected to increase with an increased number of startups reaching the growth and late stages. With greater capital and intent to expand in more geographies, late-stage startups are expected to acquire other startups.

The data for this report is primarily taken from authentic secondary sources available on the internet and other sources. Details of the sources are provided in the ‘Bibliography’ section of this report.

In this report, we have carried out exclusive analyses We have also presented a comprehensive overview of such as a socio-economic impact analysis and a the increasing M&A deals in the Indian startup ecosystem comparison of the Indian startup ecosystem with other where big corporates are taking over Indian startups. emerging and established hubs to provide an overview This section provides in-depth insights into the factors of India’s progress in entrepreneurship on the global that have contributed to the making of unicorns scale. For this purpose, we have done a comparison of (companies that have been valued over $1 Bn) mostly several economic and social parameters such as due to acquisition by established players. startups’ contribution to GDP, GVA, and FDI contribution from private equity and venture capital investments. We We have also made a prediction of the Top 5 technologies have also compared the requisite and available solutions to look out for in 2019 based on the problems these in sectors such as agritech, cleantech, electric vehicles, technologies are capable of solving in context of the etc. This comparison highlights the gap between the Indian economy. We arrived at this list by considering the parameters, the available solutions and the required social and economic problems these technologies will solutions to suggest changes that are required. be able to solve better than their contemporaries.

We have also introduced a new Investor Confidence We have used exponential smoothening and time series Index that is prepared by evaluating the confidence of analysis for the quantitative predictions presented in this investors in some specific sectors and business models report. by using parameters such as transactional volume, technological trends, and investor sentiment. Policies related to startups have also been evaluated on the basis of secondary research on the policy changes In the report, we have also evaluated the Top 5 Indian that took place between 2017 to 2018 and the impact metropolitan cities and the development of the local they’re going to have on the Indian startup ecosystem in startup ecosystems in these cities. A comparative the long as well short run. analysis of parameters such as the number of investment deals, number of incubators/accelerators, transactional Based on these policy implications, we have also volume, etc, has also been carried out. This provides us evaluated the expected roadblocks that may hinder the with a clear picture of the startup ecosystem in the exponential growth rate of the startup ecosystem in economic powerhouses of India — Delhi-NCR, Kolkata, India. Besides,we have carried out a comparative Mumbai, Chennai and Bengaluru. analysis of the policy changes in other nations that led to a boost in the Indian ecosystem and tried to determine Since capital is considered as the fuel that drives the how some of the policies formulated by the government startup ecosystem, we have also presented an evaluation are having a counterproductive effect on the potential of of the most active investors in India on the basis of the our ecosystem.. stage of investment — seed, early stage,growth and late stage — along with mergers and acquisitions. This section is intended to provide insights into the investment trends in India to make it easier for entrepreneurs and investors to comprehend them.

Tools and technologies used

World bank dataset Niti Aayog reports International labour organization dataset The government of India public datasets Economic survey of India 2017-2018 Ms Excel and google sheets Heritage.org dataset Machine learning algorithms Entrepreneurship Index Word processors Global innovation index Various online tools Commercial reports Visualization tools

Economic survey of India 2017-2018 Stanford University study: ‘Are startups really job engines’ https://www.gsb.stanford.edu/insights/george-foster-are- startups-really-job-engines Ejaz Ghani’s (world bank) research ‘Who Creates Jobs’ https://www.researchgate.net/publication/227352256_Who_ Creates_Jobs International Labour organization database (ILOSAT) https://www.ilo.org/ilostat/faces/wcnav_defaultSelection?_ afrLoop=1267671316247432&_afrWindowMode=0&_afrWindowId=null The World Bank database https://data.worldbank.org/ The Central Statistics Office (CSO) http://www.mospi.gov.in/central-statistics-office-cso-0

Gender Gap Grader http://gendergapgrader.com/studies/ http://www.ddugjy.gov.in/portal/definition_electrified_village.jsp https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS https://inc42.com/entrepreneurship/risk-taker-entrepreneur-effectuation/ Greenpeace organisations report entitled ‘Airpocalypse-Assessment of Air Pollution in Indian Cities’ Road Transport Year Book 2012 http://mospi.nic.in/statistical-year-book-india/2018/189 The National Crime Records Bureau (NCRB) https://www.globalinnovationindex.org/Home ‘Initiatives and Strategies for the Development of Agriculture in India’ published by NITI Aayog https://www.itu.int/en/ITU-D/Climate-Change/Pages/Global-E-waste-Monitor-2017.aspx Inc42 Datalabs’ ‘Funding galore’ The Press Information bureau http://pib.nic.in/index.aspx Accenture report entitled ‘Cost of Cybercrime Study’ The University of Texas’ research entitled ‘3D Printing Technologies For Drug Delivery: A Review Proposed that for Patients With Swallowing Difficulties (children, elderly, a stroke patient, Alzheimer’s disease, head-and-neck tumours, etc)’ NASSCOM report entitled ‘IoT in India - The Next Big Wave’ ‘Smart Home Market (Smart Kitchen, Security & Access Control, Lighting Control, Home Healthcare, HVAC Control and Others): Global Industry Perspective, Comprehensive Analysis, and Forecast, 2016-2022’ by Zion Research ‘Blockchain Supply Chain Market by Application (Payment & Settlement, Counterfeit Detection, Smart Contracts, Risk & Compliance Management, and Product Traceability), Provider, Vertical, and Region - Global Forecast to 2023’, published by MarketsandMarkets™ Persistence Market Research entitled ‘Electric Vehicle Market: India Industry Analysis (2012-2016) and Forecast (2017- 2025)’ Business Wire in the report entitled ‘Self-Driving Truck Market by Level of Autonomy and Industry Vertical - Global Opportunity Analysis and Industry Forecast, 2020-2025’

http://knowledge.wharton.upenn.edu/article/whats-driving-indias-fintech-boom/ Glossary

Tech Startup Technology enabled or CBDT Central Board of Direct Taxation technology driven, highly scalable businesses driven towards rapidly YoY Year-on-Year creating massive impact QoQ Quarter-on-Quarter Seed Funding Funding raised in pre-seed, seed, and angel funding rounds MoM Month-on-Month Bridge Funding Funding raised in pre-Series A, Mn Million pre-Series B, and convertible debt rounds Bn Billion Growth-Stage Funding Series A and Series B are Tn Trillion considered as growth stage B2B Business To Business, B2C: Late-Stage Funding Funding raised in Series C, Series Business To Consumer D rounds and beyond it B2B/B2C Business To Business/Business Delhi-NCR Delhi and its adjoining areas like To Consumer Noida, Gurugram, Faridabad, etc B2C Business To Consumer Unicorn A unicorn is a startup valued at over $1 Bn H1 Half yearly January-June, Soonicorns Startups that have a high chance H2 July-December of joining the unicorn club H1-2018 Duration January-22 June Average Ticket Size Average ticket size is the average of the disclosed funding amount $XXK XX Thousand USD based on the discussed constraints $XXM XX Million USD VC Venture Capital $XXB XX Billion USD DCF Discounted Cash Flow 4W 4W 4 wheelers DIPP Department of Industrial Policy & 2W 2W- 2 wheelers Promotion Inc42 is a new-age digital media platform which brings its readers all the important news, views, developments, and insights on the startup and technology ecosystem of India. We decode the jargon, make sense of the noise, and tell you what you need to know in a variety of formats — well-rounded news stories, analysis, interviews, features, long forms, videos, and more. Inc42’s twin mission, apart from educating its audiences, is also to be an enabler for the Indian startup ecosystem. Our special research and data-backed reports on the health of the Indian startup ecosystem aim to help startups and ecosystem stakeholders be prepared for and emerge as winners in the ongoing technology revolution in India.

EDITED & DataLabs COMPILED BY Ankan Das Pooja Sareen Inc42 reports are produced by Inc42 Sandeep Singh DataLabs, the research division of Suprita Anupam Inc42 Media that has published over Aditya Kondalamahanty 20 reports so far. It is responsible for Naga Jayadeep Akula producing detailed reports covering the diverse industries of the Indian startup ecosystem spread across the DESIGN DIRECTOR 29 states and 7 Union Territories of Prakersh Gupta India. The data from our DataLabs reports have been quoted in over 100+ JUNIOR DESIGNER reputed publications & the reports

have been downloaded 10,000 times. Credits Manash Pratim

WWW.INC42.COM The data provided in this report has been obtained from public and private sources. We have made every attempt to ensure that the information presented in this report is accurate and free from any discrepancies. Ideope Media Pvt Ltd, the parent company of Inc42 Media and Inc42 DataLabs, is not responsible for any inaccuracy in the information presented or for any damages caused by the use of information provided in this report. In case of any discrepancy or errors in the data, you can contact us at [email protected] and we will try our best to update the information in the digital version of the report. We are constantly updating our database of startups. Due to new Disclaimer startups from various domains being updated, previously reported deals and amounts might vary. This report has been prepared in good faith on the basis of information available at the date of publication without any independent verification. Ideope Media Pvt. Ltd. does not guarantee the accuracy, reliability or completeness of the information in this publication. Readers are responsible for assessing the relevance and accuracy of the content of this publication. While this report talks about various individuals and institutions, Ideope Media Pvt. Ltd. will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on any information in this publication. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Ideope Media Pvt Ltd and is not intended to represent or imply the existence of an association between Ideope Media Pvt Ltd and the lawful owners of such trademarks. Information regarding third-party products, services and organisations was obtained from publicly available sources, and Ideope Media Pvt. Ltd. cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. The views and opinions in this report should not be viewed as professional advice with respect to your business.

Get Access 6 Published To All The Inc42 Reports +11 Upcoming for the next 12 months.

UPGRADE NOW

Only for INR 35,999