Early-stage startup investments up 100% in 2020: LetsVenture

Despite the economic turmoil caused by the Covid-19 pandemic, the number of investments in early-stage startups rose by 100% in the year 2020, LetsVenture said in its annual report.

A total of 105 deals were closed across early and growth-stage startups as multiple key sectors saw a surge in demand, according to the company. LetsVenture provides a full-stack marketplace for angel startup investments

“While the funding scenario in India saw a dip during April and May 2020, the good news was that the investor sentiment was still significantly strong in India which helped the startup community to bounce back strongly,” Shanti Mohan, the co-founder and CEO of LetsVenture, said in a statement on Monday. 

The report, Early Stage Investment Landscape 2020, designed on the basis of transactions facilitated through LetsVenture’s platform throughout 2020, notes that the company saw over 1,000 investors on its maiden angel AIF (alternative investment fund), which has $30 million worth assets under management (AUM).

Out of these angels, as many as 37% were CXOs and professionals who were keen on investing in early-stage startups while 45% were completely new to the asset class.

During the year, the report said, startups in Bengaluru, Mumbai, Hyderabad, Pune, Chennai, and Delhi NCR drew most investments, with those in enterprise software as a service or SaaS (12.6%), consumer goods (11.5%), ed-tech (11.5%), and consumer internet (8.0%) catching significant attention of the investors. 

These were followed by players in fintech (6.9%), health-tech (6.9%), e-commerce (5.7%), and consumer services (4.6%), among others. 

In addition, the report adds that about 13% of the rounds were Series A or later, while about 38% were bridge rounds that helped the startups remain afloat during the pandemic. LetsVenture expects growth to continue across fintech, ed-tech, health-tech, and agri-tech sectors in 2021.

Since being founded in 2013, LetsVenture claims to have helped startups raise as much as Rs 1,174 crore across over 290 rounds. According to the company, it has more than 6500 angel investors, and 100 micro VC funds. Accel, Chiratae Ventures, Nandan Nilekani, Ratan Tata, Rishad Premji, Mohandas Pai, Sharad Sharma and Anupam Mittal are among its backers.