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Q2 Report FY 17-18

Our Startup Team analysed 950 fundraising companies and 80 funded companies to create the 2nd Quarter Report for the financial year 2017-2018. The average size of funding this year was $680k, 20% higher than last quarter. On the contrary, we saw a 25% decrease in the number of deals this quarter.

The Data delivers insights into:

  • The distribution (in percentage) of sectors that have been funded
  • The distribution (in percentage) and analysis of the fundraising companies and funded companies
  • The comparison between B2B and B2C fundraising trends

The correlation between the location and the fundraising trends for startups

1. Sector 
The pie-chart here shows the distribution of top 16 sectors (by number of deals) which got funded. A few observations here:

  • Enterprise Software and Healthcare are the top funded sectors for Q2. Fintech, Education and Retail are the other three sectors which have seen high number of deals. Note that Enterprise Software improved its position in market share with respect to number of deals from 6th position in Q1 to 1st position in Q2.
  • Retail and AI have improved their percentage share amongst funded sectors, from low funded sectors in Q1 to 2nd and 4th most funded sectors. IoT still remains one of the least funded sector in Q2 as was the case in Q1, but the number of deals have improved.
  • FnB which saw a blip in Q1 in terms of number of deals, has again settled down as one of the lowest funded sector.

Next we compare the percentage of companies on the fundraising and funded side. Green bars shows the percentage of companies raising funds while the red shows the percentage of companies funded in each sector. Here is what we think:

  • Analytics, Human Resources, IoT, Real Estate seems fairly balanced as of now. While the rest of sectors have seen an imbalance in supply and demand.
  • Education, AI, Fashion, FnB, Media and Entertainment have been the toughest sector in Q2, where there was huge demand but low supply.
  • Enterprise software which saw a down in Q1, established its position as the most funded sector again in Q2, as was the case in Q4, 2016 – 2017 and before that.
  • Sectors like Enterprise Software, Healthcare, Retail, Communication, Construction are hot sectors which have seen more supply than demand. Construction sector witnessed fundings in startups catering to online retail and site operations analytics platforms. Communication sector saw rise of enterprise communication platforms and chatbots.

2. Market type of companies

  • Around 65 percent of the companies that got funded this quarter were B2C which is a 10 percent increase from last quarter.
  • More companies raised funds companies in B2C sector this Quarter in comparison to Q1. Is this because of the number of Consumer brands getting funded at early stage?

3. Location

  • 78 percent of the deals have happened in Tier-1 cities, which is on the lower side as compared to Q1’s 96 percent. Interestingly, 20% of the fundraising happening in Tier-2 cities is a great sign for founders looking to build companies from there.

This was Quarter 2, of the financial year 2017-2018, in a nutshell. Follow the links below for similar previous year’s highlights and Quarter 1 of the Financial year 2017-2018.

Hope you found this post insightful, you can tweet to us at @LetsVenturein with any questions.

LetsIgnite 2018, Applications Now Open! 

In the previous 3 editions of LetsIgnite, we’ve brought to you some of India’s marquee investors and entrepreneurs to share their insights. Continuing this focus, LetsIgnite’18 is coming to Mumbai and Delhi. Here is the link to register for startups. Registration closes on Nov 18, 2017.

Who can apply: Startups having at least a prototype and looking to raise $ 200k to 1.5 Mn.
PS: Last year, 90% of the LetsIgnite finalists successfully closed their fundraise.

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