Venture capital investments in India have continued to rise, despite a severe second wave of the pandemic.

In the first 4 months of 2021, startup companies in India raised a total of $7.8 billion, displaying significant investor interest in the market.

Key Highlights

• The Economic Times reported that startup companies in India raised over $7.8 billion in the first 4 months of 2021.
  
• Throughout the 4 months, 402 funding rounds took place, compared to 1,114 rounds for the same period last year.
• The average funding size rose to $25 million — the highest in the past 5 years.

Why It Matters

• The average investment size per deal has risen, signifying a maturing ecosystem and increasing appetite for later-stage investments.
  
• Despite the pandemic, Investors are willing to make big bets in India this year despite the global pandemic, primarily due to increased liquidity in the US as a result of IPOs and SPACs.
• Early stage investments however, have fallen due to higher business risks from the pandemic as well.
• Funding is expected to rise significantly this year as more investors dump last year's funding reserves into limited number of "high potential" companies.
• Increasing public market capital (ie: hedge funds) have also increased funding into the private market — typically happening due to too much market liquidity.