In this edition, we explore the 2021 deal activity in the consumer internet, direct-to-consumer (D2C) and business to business (B2B) space:

  • The internet sector saw 83 transactions in H2 2021 with a deal value of USD 8.1BN, significantly higher than in H2 2020 (c.232% increase in volumes and 435% increase in value).[1] This was driven by the recovery in consumer spending (highest-ever festive season sales)[2] and sustained changes implemented during the pandemic in the e-commerce ecosystem
  • Both factors led to an increase in organized retail and the proliferation of D2C models:
    • With a growing number of new-age brands, e-commerce rollup platforms, such as Global Bees and Mensa Brands (commonly referred to as ‘Thrasio-style start-ups’), continued to raise significant capital, deployed at exceptional speed.[3] These companies acquire up-and-coming D2C brands and scale them up with their expertise in marketing, technology and the supply chains. As a result, Mensa Brands[4] was the first India-based company to achieve unicorn status in just six months
    • Investors continue to have high confidence in these platforms, and we expect increased deal activity in this sector and healthy exit opportunities for medium-scaled brands facing growth challenges
    • Large D2C brands have also adopted a ‘house of brands’ strategy, as they focus on increasing customer engagement to drive better brand loyalty across their target group. MyGlamm continues to lead the personal care segment and as a result its valuation has grown 12-fold since March 2021[5]
    • This period also saw Licious attaining unicorn status[6], the first D2C company to do so. Funding in D2C fast moving consumer good (FMCG) brands has started to increase with similar investments in Vahdam India, The Whole Truth and Rage Coffee[7]
  • Marketplace and aggregator models continue to drive large investments, with companies scaling up in various sub-segments as they aim to modernize to reach potential buyers, such as:
    • Used cars: three new unicorns were created during this period (Droom, CarDekho, Spinny), joining Cars24[8] which turned unicorn last year. They leverage technology to bridge the confidence gap for an industry long plagued by transparency issues
    • Other sectors: Companies are garnering investor attention by redefining the customer experience in underserved sectors, such as recruitment, agriculture, SMEs (e.g. (Marketplace - blue-collar jobs), Dehaat (Marketplace - B2B agriculture technology), Zetwerk (marketplace - B2B manufacturing) and NoBroker (marketplace - property technology)[9]
    • We expect this subsector to witness substantial deal activity and continue to receive investor attention
  • Investments in content and gaming platforms continued to grow rapidly as consumer traction and engagement accelerated significantly.[10] However, the majority of these investments have been in established leaders such as Dream11, MPL and DailyHunt.[11] We expect healthy deal momentum in this segment in 2022 with focus on start-ups that create value for the creator economy
  • We expect themes such as ‘wellness’, ‘D2C’ and ‘house of brands’ to continue to see investors interest in 2022, and business performance of ‘soonicorns’ will be critical to the market sentiments going forward

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[12]


  • Fintech has been one of the largest beneficiaries of the internet boom and e-commerce penetration in India. The sector witnessed 40 deals (344% increase) with a value of USD 4.3BN (824% increase) in H2 2021 compared to H2 2020.[13] This was driven by a significant revival in funding for digital lending companies after a relatively lean period during the pandemic, indicating growing confidence in the overall economic revival as well as robustness of some of these business models
  • Multiple fintech disruptors in traditional sectors, such as payments (BharatPe), credit (OfBusiness, Slice), insurance (Acko) and broking (Upstox) ,[14] achieved unicorn status in 2021. The path to digitizing SMEs and making financial products more inclusive to consumers has been significantly lucrative both in terms of business growth and valuations. We expect the growth in deal momentum across subsectors in fintech to continue in 2022
  • There was a significant breakout for funding in neo banking start-ups, such as Open and epiFI[15] in H2 2021. Even though the neo banking business model is still evolving, user adoption is strong, and investors seem to be confident as these challenger banks attempt to solve the challenges of financial inclusion. We expect neo banking to be a very active subsector in 2022 with large increases in funding and emergence of new unicorns
  • Investment in cryptocurrency has grown multi-fold with the emergence of two unicorns, CoinDCX and CoinSwitch,[16] driven by increased trading activity on crypto platforms and more than 20 million crypto owners in India. Recently proposed cryptocurrency regulations by the government may slow activity in 2022, but we expect overall sentiment and funding activity to remain positive towards crypto exchanges and other allied businesses

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[17]

Technology & Software

In this edition, we discuss Indian PE and VC investment activity in SaaS:

  • SaaS saw phenomenal investor interest in H2 2021 (23 deals compared with seven in H2 2020).[18] As transactions in 2020 were negatively affected by the pandemic, both in general uncertainty for investors and in its impact on end clients in specific service sectors, we saw a more positive impact for this sector in 2021. Cloud and SaaS driven business models have been significantly advanced due to digital initiatives and, as such, have been readily accepted by customers. This pandemic-induced demand and improvement has enabled a virtuous cycle of investor interest and funding, driving entrepreneurial innovation
  • The sector has witnessed an increase in large-size funding rounds (Postman – USD 225M, Gupshup – USD 240M),[19] implying a significant scale for the Indian SaaS ecosystem since the number of companies with Annual Run Rate (ARR) between USD 10-50M has grown by five times in five years.[20] This growth has been driven by Indian SaaS companies bringing innovation to underserved verticals, across retail, logistics, BFSI, travel & hospitality etc. We expect a further increase in these forms of large funding rounds for SaaS companies as more businesses continue to attain scale
  • Freshworks’ (NASDAQ:FRSH) IPO on NASDAQ was a validation for the SaaS ecosystem building ‘from India for the world’, and has paved the way for a large set of scaled up companies primed for an IPO
  • India continues to capitalise on its sustainable competitive advantages, such as its depth, abundance of talent and low-cost structure. We expect the next year to see robust growth in deal volumes as aggressive cloud adoption, both locally and globally, is expected to expand in addressable markets for category leaders

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[21]

Education & EdTech

  • 2021 has been another record year for Education and EdTech due to the sustained growth of online learning undeterred by schools reopening as EdTech companies leverage hybrid learning structures to continue delivering value to students
  • Mid-market private equity activity grew 2x in H2 2021 (USD 1.4BN deal value against USD 0.7BN in H2 2020),[22] despite continuing aggressive consolidation by the ‘Big 4’ (Byju’s, Unacademy, Upgrad and Eruditus) as these companies continue to bridge portfolio gaps through M&A and get ready for public market listing in the near term. We expect deal momentum in 2022 to continue at a steady pace in line with 2021
  • Investors attempted to back differentiated EdTech companies and diversify from the ‘Big 4’, as the sector has become crowded with rapid developments in certain sub-sectors. This is evident by the 3x increase in funding value in 2021 (excluding ‘Big 4’ EdTech firms) compared to the value of funding for similar companies in 2020.[23] We expect similar deal momentum to continue in 2022 with more funding in niche sub-sectors and for multiple EdTech players to join the ‘soonicorn’ club due to:
    • Robust financial sponsor interest for companies with strong business moats; and
    • China’s EdTech crackdown to drive increased capital inflow into India[24]

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[25]

IT Services

  • The demand for digital assets in IT services continues to be very buoyant, which has also been reflected in the valuations for some of the scaled private market transactions. [26] Companies across the sector continue to search for pure-play digital assets, as we have seen with digital product engineering and cloud software continuing to be the most sought after sub-segments for investors
  • The successful listing of LatentView (NSE:LATENTVIEW) has re-invigorated interest in analytics services as a space, and we predict increased investor and buyer interest going forward

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[27]


  • Healthcare deal volumes increased in H2 2021 compared to H2 2020 (twelve vs eight deals) [28] however, deal values fell significantly to USD 0.7BN (-40% compared to H2 2020[29]), as the valuation differences in public and private markets continues to increase.[30] Favourable valuations in public markets have fuelled an explosion of IPOs, with ten IPOs since June 21 compared to just one in 2020[31]
  • Pharmaceuticals were the primary driver of transactions in 2020 but has become secondary in 2021 given the valuation mismatch in public and private markets (five deals in H2 2021 vs seven in H2 2020). Going forward, we expect growth investments to increase over buyouts, given favourable policies from the Indian government to encourage domestic production.[32] The impact of such policies could see India move up the value chain from being an outsourcing hub to a research and development hub and would reduce the reliance on China imports
  • Private equity activity in hospitals remains muted, as M&A activity has picked up with consolidation by Manipal Hospitals[33] (among the top three hospital chains in India) and Samara Capital[34] (a home-grown PE fund). Conversely, we believe diagnostics players are either focusing on IPO or have been targeted for M&A (with Pharmeasy’s acquisition of Thyrocare[35] setting the valuation benchmark). We therefore expect deal activity to be low due to lack of quality and scaled up companies
  • HealthTech companies are seeing larger and faster funding rounds, signifying the emergence of leaders and availability of mature companies, for example, Pristyn Care[36] turned unicorn within three years of being established. We expect this segment to continue to grow at a rapid pace as they aim to solve the inefficiencies in the current healthcare system caused by scarcity and uneven distribution of healthcare support

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[37]

Industrials & Logistics

  • Industrials and logistics witnessed a 58% deal increase in H2 2021 compared to 2020 (from 12 deals to 19)[38], and deal values saw a 127% jump to USD 1.8BN[39]
  • This increased activity is in part, due to the tech-logistics sub-sector in India benefitting from the growth in the e-commerce space.[40] Such growth has been sustained even after the initial phase of the pandemic due to longer term benefits to the consumer, such as faster turnaround time, efficient shipping, product variety, easy returns, and cash-on-delivery. Marquee investors correlate the growth in tech logistics as a proxy for e-commerce growth as new-age companies like Delhivery and Shiprocket[41] disrupt traditional logistics companies by improving productivity and cost-savings and we expect, will continue to invest in this sub-sector
  • Asset light marketplaces such as BlackBuck and Porter,[42] have also managed to garner investor attention due to their efficient use of technology, reliable shipping, faster customer acquisition and high service levels as they stand a better chance to gain market share from the incumbent players
  • We have seen sustainability as a trend also pick up momentum in this period with government backed support reducing indirect taxes (GST) [43] and the India government pledging to have 30% electric vehicles by 2030 from the negligible quantum currently.[44] Companies in this sector have seen clear growth: Ola Electric – the most valued EV company in India – raised USD 400M during the period at a valuation of USD 5BN.[45] Based on the strongly awaited performance of Ola Electric’s two-wheeler launch, the sector is likely to see substantial investor interest over the next year
  • We expect to see significant traction in technology enabled sub-sectors in 2022, especially in logistics and B2B marketplaces, as these continue to grow at a faster pace than the wider industry

Source: Venture Intelligence Private Equity & Venture Capital Deals Database[46]

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