Fewer startups and bigger cheques — that’s what investors have preferred in the first half of 2019. According to data collated by deal discovery platform Tracxn, the number of investment deals were reduced by more than half, while funding size got bigger.
In the first half of 2019, at least 224 tech startups raised USD 2,388.84 million in 231 rounds.
Of all the sunshine sectors, Indian enterprise application segment rode the highest wave. With three SaaS startups — Freshworks, Druva and Icertis — entering the Unicorn club over the past year, investors continued to pour in money in the sector. The first half of 2019 saw 81 enterprise application startups raising money totalling USD 847.77 million in 83 rounds, the highest among all sectors, according to Tracxn.
Although the number of companies that got funded almost halved compared to the corresponding year last year, the deal size rose considerably with 155 SaaS startups collectively raising a total of USD 650.65 million,.
Some of the significant deals in the sector this year include Zenoti, an enterprise cloud platform for the beauty and wellness industry, closing a USD 50 million Series C funding led by Tiger Global Management. Customer lifecycle management platform CleverTap raised USD 26 million in Series B from Sequoia Capital, Tiger Global Management and Accel. Enterprise expense management software provider Fyle bagged USD 4.2 million in Series A round from Tiger Global. SaaS startup Dockabl raised USD 1.26 million in a pre-Series A from angel investors.
Retail tech was the second-most funded segment after enterprise applications. Twenty-one retail tech startups raised USD 727.03 million in 23 deals in the first half of 2019. Notably, Bengaluru-based retail technology startup Arzooo.com raised USD 1 million in a round led by Jabbar Internet Group, while Peel-Works, a big data analytics platforms for small and medium retailers, raised USD 5 million in Series B funding led by Equanimity Ventures.
Fintech and AI (artificial intelligence) were also among the top five most funded segment in the first six months of 2019, according to Tracxn.
Compared to 107 fintech companies that raised USD 650.65 million in H1 2018, only 29 fintech startups were able to raise money in the corresponding period this year — a total of USD 306.05 million. Among the fintech startups which raised money, Open, a Bengaluru-based startup that operates a “neo-bank” to help businesses automate and run their finances, drew the industry’s attention by bagging USD 30 million in a fresh funding round.
The AI segment has witnessed a 50% drop in the number of startups raising funds; the total money raised was only slightly lower than last year. In H1 2019, there were 39 startups which closed a total of USD 163.75 million in 40 deals. Some significant deals in AI startups space include computer vision and AI platform Vue.ai raising USD 17 million from Falcon Edge Capital, Sequoia Capital India and Global Brain; AI-enabled vernacular speech recognition platform MiHup closing USD 1.7 million round from Accel Partners and Ideaspring Capital; intelligent logistics and supply-chain platform Locus bagging USD 22 million from Falcon Edge, Tiger Global and its existing investors.
Food tech, the fifth most funded segments, saw four startups raising USD 111.67 million in the Jan-June period. Meanwhile, health-tech saw only five investment deals amounting to USD 36.08 million in H1 2019, compared to 76 deals totalling USD 203.86 million last year. Similarly, five life sciences startups raised a total of USD 69.15 million this year, against 23 startups that raised USD 141.37 million in H1 2018.
There were 12 enterprise infrastructure startups which received USD 67.01 million in funding. Other segments such as adtech, media and entertainment tech, Internet of Things (IoT), edtech and technology have seen little interest from investors so far this year.