VC funding slips to $2.2 billion in Q1 as investors tread warily - ETtech

Illustration: Rahul Awasthi Venture capital investments in Indian startups plunged to $2.2 billion in the first quarter of calendar year 2020, hit hard by a combination of global macroeconomic uncertainty and the ongoing Covid-19 pandemic, according to the latest edition of KPMG ’s Venture Pulse report. This compares with the $6 billion pumped in by VC investors into Asia’s third-largest economy in the October-November quarter of 2019, according to the report. The previous calendar year saw a record-breaking $14.5 billion inflow into India, spread over 909 deals. Graphic: Rahul Awasthi“Initially, India was not as affected by Covid-19 in Q1’20 compared to China. The pandemic has ravaged countries across the globe, leading to lockdowns and crippling the global economy. In India, the world’s second-most populous nation, there have been 20,835 positive cases and 872 deaths as of April 27, according to government-issued data. Globally, according to World Health Organisation data, almost 3 million people have tested positive, while around 200,000 have succumbed to the virus and related causes. It, however, points out that sectors such as ed-tech, health-tech, gaming and auto-tech, which also includes the mobility sub-segment, are anticipated to continue garnering interest from VC investors. Companies such as Byju’s, Unacademy and Bounce have all raised $100 million and upwards in funding in the first three months of 2020. Capital inflows into India’s startups are also likely to be hit after the government, earlier this month, tweaked its foreign direct investment regulatory norms, which make it mandatory for companies to seek its prior approval for all investments coming from the seven nations it shares a land border with, including China.