LV Data

Q4 REPORT FY 17-18

Our Startup Team analyzed 900+ fundraising and 43 funded companies to create the Quarter 4 Report for the financial year 2017 – 2018 (Jan – Mar, 2018). The average size of funding this quarter was $660k, 6.8% higher than the last quarter’s $618k. And the number of deals this quarter fell by 21.8%.

This report delivers insights into the:

  • Percentage distribution of sectors funded
  • Demand-Supply percentage gap of funded and fundraising
  • B2B and B2C fundraising trends
  • Correlation between the location and fundraising trends for startups

Sector


The pie-chart represents the percentage distribution of top 14 sectors which were funded. A few observations are:

  • Enterprise Software, FinTech, Retail, Education, and Healthcare were the top funded sectors for Quarter 4.
  • Enterprise Software retained its market leader position, saw investments coming up in sales and business management segment catering to following verticals: productivity and sales tools for email, account management and their health monitoring (churn, retention etc.), customer acquisition and retention platforms, business expense management software etc. Other software startups that were funded focused on enterprise solutions for online restaurant and order management, AR/VR creation platforms, connected and collaborative platform for schools, Digital Campus Platform, UX design software, commute tracking for multiple stakeholders.
  • FinTech, saw investments in platforms catering to algorithmic trading, investment and portfolio management, peer to peer lending, mutual funds investment, Personal Loan, Business Loans for SME.
  • Retail, saw investments in startups catering to, B2B food Ingredient platform for restaurants, consumer goods, consumer brands (food – ready to cook, made to order snacks, products), Weddings and Pet accessories.
  • Education, saw investments in startups catering to fitness education, gaming apps, robotics programs and products for Kids. Few others saw funding in areas like classroom school management, online courses for career development.
  • Healthcare, saw investments in platforms focused on social impact, providing health services for rural areas, others include advance health benefits and insurance management platform.

Further on , we compare the percentage of companies on the fundraising and funded side. Blue bars show the percentage of companies raising funds while the red line shows the percentage of companies funded in each sector. Here are they highlights:

  • Retail and Social Impact verticals have been quite balanced, where the demand has approximately matched the supply.
  • Agriculture, Media & Entertainment, Travel & Tourism has been the toughest sector
  • There’s been a high surge in the number of startups building products in Healthcare, AI, Consumer Goods, Food & Beverages, Travel & Tourism vertical, but the supply has not been sufficient.
  • Enterprise Software, Information/Tech (Search), Analytics witnessed lower demand than supply. Information/Tech saw investments in hyperlocal discovery, micro-job providing, news platform. Analytics solution has got investment in the business and finance investment vertical.
  • Artificial Intelligence saw investments in Algorithmic Trading solutions, voice-based assistant platform, human resource, agri-tech.

 

Market type of companies


 

Around 55.81 percent of the companies that got funded this quarter were B2C which is 14.74% lower than previous Quarter, while 44.18 percent of the companies were B2B, which is 27.9% higher than the previous quarter.

The increase in the number of companies getting funded in B2B can be attributed to the percentage increase in the number of investments in Enterprise Software, B2B products/services in Retail, Education, Healthcare domain.

 

Location


72.09 percent of the deals happened in Tier-1 cities, which was on the lower side as compared to Q3’s 74.54 percent. Interestingly, 27.9 percent of the fundraising happened in Tier-2 cities which is higher than the 18.18 percent mark of Tier-2 deals from Q3.

 

Additional insights 


It’s a well-known fact that Institutional Funds and VCs follow their investment thesis strictly in all their investments. Hence, we think that an insight into where they have made their investments this quarter can surely be an indication of future trends. These are the highlights:

Investments were made in AI domain, where products were built for HR vertical, others include a voice-based assistance platform (for talking to apps), an algorithmic trading platform. We also saw investment in a startup availing predominantly data science courses. In the social impact segment investments, for instance, were seen in Voice & SMS Messaging App (social impact), technology-enabled healthcare services platform for rural areas. In Enterprise Software Domain, startups catering to B2B customer acquisition, sales, expense management, school management/communication, AR/VR creation got funded by VCs.

 

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