Is 2021 the year Indian start-ups come of age?
With a record investment of $23bn across over 1000 funding deals in the last nine months, and with 33 new entrants into the exclusive unicorn club (start-up businesses valued at over £1bn), India is hot on the heels of the UK’s $30bn of start-up investment in the last year. While the momentum of funding had stayed steady throughout Q1 and Q2, Q3 was where we saw a rapid rise in investment, with $12.82 billion being raised – that is more than 55% of the total funding raised in the last 9 months.
2021 has been the year of unicorns within the Indian startup ecosystem, with investors pouring significant funds into emerging markets and start-ups. In fact, research from start-up investment bank JPIN VCATS demonstrates that 19% (2,680,000) of investors in the UK are looking to invest in emerging market start-ups.
Start-ups have also played a major role in boosting India’s economy, with a 55.3% rise in startup investment on last year’s figures. Figures additionally show that India’s economic growth is predicted to rise by 9.5% in 2021, compared to the UK’s 6.8% increase.
Investing in Indian start-ups could potentially provide a boost for the London Stock Exchange (LSE) following the Indian government’s proposal to allow these Indian unicorns and ‘soonicorns’ to list abroad. Along with the UK government’s free-trade deal predicted to be worth over £100 billion, the UK’s economy looks set to benefit from the success of Indian start-up businesses.
Nayan Gala, founder of JPIN VCATS, comments on what Indian IPOs can bring to the London Stock Exchange: “Startups in India have gone from strength to strength, receiving record-breaking capital and transforming this into both growth and returns on investors’ capital. The loosening of restrictive laws around IPOs and the upcoming free-trade agreement will only generate more interest – internationally and locally.”
“Investment opportunities in start-ups look set to be popular in the next few years, and the collaboration between the UK and Indian economy will boost not only the awareness of small firms and businesses in India – but also will create jobs in London and the UK, and ultimately boost what is already one of the leading stock exchanges in the world.”