The organization digit insurance protection raised its first outside subsidizing round a year ago at a valuation of $870 Mn
It has raised about $200 Mn till date.
Digit Insurance professes to have noticed a 31.9% development rate over the most recent nine months
Bengaluru-based insurtech startup Digit Insurance has become the main Indian startup to enter the unicorn club in 2021, in the wake of raising INR 135 Cr ($18 Mn) from existing speculators at a valuation of $1.9 Bn. It has raised the financing as development cash-flow to meet the dissolvability edge prerequisite, following a 31.9% development over the most recent nine months.
Digit Insurance has raised about $200 million till date from marquee financial specialists A91 Partners, Faering Capital and TVS Capital, which own about 11% stake in the organization. It raised its first outer subsidizing round last January at a post-cash valuation of about $870 Mn. The organization had raised $84 Mn (INR 614 Cr at current change rate) as a piece of this round, in which Indian cricketer Virat Kohli and Bollywood entertainer Anushka Sharma implanted about $340K (INR 2.5 Cr).
Before this, the organization depended on an inward capital implantation from Fairfax Holdings. The advertisers have put more than $142 mn in Digit Insurance in 2017 and 2018, and own about 88% stake in the organization. “Our technique was to improve items and measure and back it up with great assistance. This is working for us to accomplish development,” Goyal clarified
Established in 2016, Digit Insurance is a tech-driven general insurance agency that offers altered arrangements on wellbeing, auto, travel, cell phones, business properties, for example, stores and occasion homes. It extended its business during the pandemic by offering new items like fixed advantage cover for Covid-19 under Insurance Regulatory and Development Authority’s (IRDAI) sandbox activity.
The organization asserts that it was going to connect with in excess of 20 Lakh Indian through their Digit Group Illness Insurance item, which offered assurance against Covid-19 and 7 Vector-borne sicknesses like dengue, jungle fever, filariasis, ala azar, chikungunya, Japanese encephalitis and the zika infection.
As indicated by an IBEF report, the Indian protection industry was relied upon to reach $280 Bn before the finish of 2020 and develop at a build yearly development rate (CAGR) of 12-15% throughout the following three to five years. The market is required to develop as the Indian government pushes for protection infiltration and multiplication of protection plans. As indicated by BlackSoil’s fellow benefactor and chief Ankur Bansal, the insurtech will be a top choice among speculators in 2021 as the portion is required to develop.
Planning to launch your own start-up? Now is the time. India is in its best ever phase of startup ecosystem and the economic environment is favoring the aspiring minds. However, careful planning and futuristic approach are imperative to ensure your startup don’t end like the 94% that shut down their shutters within the first year of operation.
Funding is an extremely significant aspect in line with meeting the vision of a business. Funding and fundraising, both are fundamental modern business scenarios that support the growth of a startup. The first round of funding, popularly known as seed funding forms the basis of fundraising. It is followed by series A, B and C rounds of funding. While the seed funding typically refers to the basic, initial round of funding, series A, B, and C differ in the business maturity and the type of investors involved. The series funding helps in the evolvement of a startup to a full-fledged organization by helping it with calculated funds at crucial steps.
Here are a few successful startup funding options in India that will help you support your business with the indispensable finance requirements.
Go for Crowdfunding
The concept of crowdfunding is quite similar to mutual funds on a basic level. In this option, more than one investor is involved and they offer a fixed amount of money based on your business idea, goal, plan of action, and plans of making a profit. All you need to have are people who truly believe in your business idea.
Crowdfunding is gaining popularity as it ascertains the belief that your idea is also believed by other experienced players in the market. Crowdfunding also helps you in getting the crucial funds from the idea stage itself. You can gather crowdfunding from friends, family, and entrepreneurs who believe in your business concept and have the means to come together and fund your aspiration.
Consider Self-funding
Popularly known as bootstrapping, it is an ideal plan of action when it is hard to convince others of your business idea and vision. Often investors ask for traction before making an investment, the initial round of self-funding allows you to prove the feasibility of your idea and build confidence in the investors for a further round of funding.
Bootstrapping is a great idea for startup funding especially if the initial business requirement is small. It also gives you the freedom of being your own boss. You’re not answerable to anyone and it allows you to keep an eye on the revenue earnings as well.
Get in touch with the Venture Capitalists
A sure shot destination for big bets, venture capitalists offer you professionally managed funds who are looking for startups that have success potential. The best part about venture capital investments is the expertise and monitoring that they bring along. Ordinarily, VCs invest in equity and once the business releases its IPO or is acquired, they leave.
Venture Capitalists usually look for startups with a good enough traction and a strong team. But if you’re opting for venture capital funding, be flexible enough to take their inputs and accept the close monitoring.
Try Angel Investment
There are individuals with surplus cash looking for investing in promising startups and earn their share once it grows to its potential. They can either work alone or collectively in a network to screen startups with huge potential. This funding option has business minds looking to earn interest out of your success and they may expect as high as 30% equity as well.
Although angel investment comes with its issues of high-interest expectations and lesser investments as compared to Venture capitalists; it is important to remember that Google, Yahoo, and even Alibaba were a result of Angel investing.
Conclusion
Funding is required to take the best advantage of the existing and upcoming market opportunities. Even if you initially go for bootstrapping, outside funding is required to sustain in the long run.
From having a handful of tech companies to dozens and thousands of innovative new ventures, India’s startup ecosystem has grown immensely in the past decade
India has witnessed launch of more than 55,000 startups to date with more than 3,200 startups raising $63 Bn in funding in the last five and half years alone
Home to 34 unicorns, and 52 soonicorns with a potential to become unicorns by 2022, the world’s second largest startup ecosystem is poised for disruption
In just over half a decade (2014-2019), India has shown a great appetite for technology, data and the internet. The internet paved the way for thousands of startups to rise over the past decade, address unique problems, transform entire industries and create new segments!
From having a handful of tech companies to dozens and now thousands of innovative new ventures, India’s startup ecosystem grew immensely in the past decade. From 29K startups in 2014, the number has grown exponentially from 2015-2018 and will touch 55K startups by the end of 2020.
With overall funding skyrocketing to touch $63 Bn between 2014 to H1 2020 alone, India has seen entry of 34 startups in the unicorn club having a combined valuation of $115.5 Bn.
Celebrating the success of the startup ecosystem in the last decade, we are happy to announce the launch of the second edition of our flagship report – The State Of Indian Startup Ecosystem, 2020.
The report will act as a go-to-guide for just about everything one may want to understand about the Indian startup ecosystem. With deep, data-driven insights to influence strategic decision-making in governance, investments, growth, and other core aspects driving the Indian startup ecosystem.
The State Of Indian Startup Funding
It won’t come as a surprise to anyone that 2020 has brought some very unprecedented changes in the business world. For Indian startups, the funding winter this year has begun in the middle of sweltering summers. While the ecosystem has come a long way since 2014, going through the golden period of funding between 2015 and 2017, after a couple of years of slow but mature growth, 2020 has been a year of decline.
Over the years, the growth of startups has brought in more international investors and boosted their confidence towards India. Fundraising reported by SEBI-registered (Category 1) venture capital funds grew from INR 326 Cr in 2014 to over INR 2,703 Cr in 2019 – an 8x surge in five years. Also, the share of actual capital raised to commitments in 2014 was 35% compared to 61% in 2019, indicating the growing investor interest towards investment opportunities in India.
With such huge money at play, the Indian startup ecosystem has a lot to lose due to the pandemic. It has already left millions of people jobless and created a liquidity crisis in many places. Covid-19 has created a new market in almost every sense, for instance, once-lauded metrics such as the gross revenue and total addressable market has been usurped by sustainability-focussed goals like EBITDA and economies of scale.
The numbers make it quite evident that investment activity in startups is slowing down post the pandemic. Therefore, in a scenario (i.e. Case 1) where high ticket value investments in established startups will continue to flow along with greater investor confidence towards the beneficiary sectors such as edtech, fintech, online gaming and OTT, ecommerce and enterprise tech. The total capital raised by Indian startups in 2020 is estimated to reach $11.3 Bn in this case, which can be termed the best-case scenario, an 11% decline compared to the previous year.
On the contrary, in Case 2, high ticket size investments will take a hit and there will be only moderate investor confidence towards the beneficiary sectors. Under this scenario, the total capital inflow in Indian startups is expected to dip in 2020 by as much as 36.2% compared to 2019, to reach $8.1 Bn. In both scenarios the total capital inflow in Indian startups for the year 2020 is expected to be the lowest since 2017.
State Of Unicorns And Soonicorns
From a single unicorn in 2012, 10 in 2016, India has seen 34 startups attaining unicorn status with a current combined valuation of $115 Bn.
In our recent analysis of the Indian startup ecosystem based on the current pace and growth and other factors we have identified 52 soonicorns which have the potential to enter the unicorn club by 2022.
There are 53 startups in India that have the potential to achieve $1 Bn plus valuation by the end of 2022 as per our analysis. Out of which the single highest number of startups (19) is from fintech. This is different from the same in unicorns where enterprise tech startups (7) have the highest number.
The State Of Indian Startup Hubs
As we closed the first half of 2020, Bengaluru the long hailed startup capital of India still has its crown intact with a total funding amount of $28 Bn across 1,876 deals between 2014 to H1 2020.
Lately, in addition to the top three hubs (Bengaluru, Delhi NCR and Mumbai) emerging hubs such as Pune and Hyderabad have recorded a compounded annual growth rate (CAGR) of 45% and 37% respectively.
In the tier segment, Jaipur and Goa have earned their spot in the top 10 startup hubs as of H1 2020 based on the number of funding deals. Interestingly, Jaipur a tier 2 city has outperformed Kolkata- a celebrated tier 1 metro.
The State Of Indian Investor Landscape
With the beginning of a new decade in the 21st century earlier this year, the journey of Indian startup ecosystem has entered a new phase. From a handful of investors and a few startups to over 49K startups and over 2,000 Indian and international investors, the startup ecosystem has come a long way in the past five years. International investors now routinely come to Indian shores to invest in the burgeoning tech ecosystem.
While angels and corporations undoubtedly have played a big role in funding trends, according to DataLabs by Inc42 analysis, 2019 was not one of the better years for venture capitalists.
As per our analysis, till the second half of 2020, there are approximately 4,640 active investors in India. Among these, the majority or 59% (2,751) are angel investors and 18.3% (849) are venture capital firms. Overall there is a downward trend in terms of unique investor participation similar to what has been observed in 2019. However, the frequency of participation by the existing investor is on the rise.
Looking Beyond 2020
While the first decade of the 21st century was all about bringing India’s cities and metros online, the past ten years have been about using the internet to create businesses and startups and take the digital torch to Tier 2, 3 markets and rural India. India is today home to the world’s largest working population and startups are expected to take full advantage of this in the next five years.
After steady growth in 2018 and 2019, in 2020 too, the Indian startup ecosystem was expected to remain stable in terms of funding and investor interest, but the pandemic has changed the game completely. With the funding winter coming in early, there’s a bigger focus on sustainability, which is also expected to play a part in the number of funding deals.
Nevertheless, there are several positives still in the Indian market to give us hope about the future of startups. Growing from a nascent stage to a flourishing ecosystem to the current stage of maturity and stability, Indian startups have some of the best market conditions to take advantage of with digital products and services adoption at an all-time high. Once the medium and long-term pandemic impact subsides, there’s no stopping Indian startups.
By 2025, the number of startups in India is expected to cross 100K, creating more than 3.25 Mn jobs in the process. At the same time, the total funding in Indian startups is likely to increase to over $150 Bn and with the total value creation exceeding $500 Bn.
70% of Indian new businesses will run out of cash in under 3 months
An overabundance to tie down extra capital in the coming a long time to guide through the Covid pandemic, as per an industry report.
70% of new businesses in India, home to one of the world’s biggest startup biological systems, have under a quarter of a year of money runway in the bank, and another 22% have enough to scarcely make it to the furthest limit of the year, as indicated by a review directed by industry body Nasscom.
Just 8% of new businesses that took an interest in Nasscom’s review said they had enough cash to make due for over nine months. 90% of new companies said they were confronting a decrease in incomes, while 30 to 40% said they were incidentally stopping their tasks or were currently shutting down.
As new businesses stand up to exceptional occasions, many are considering finding a way to remain above water. About 54% of somewhere in the range of 250 respondents said they were hoping to rotate to new business openings, and 40% said they needed to broaden into development verticals, for example, medical care.
The money crunch comes as financial specialists on the planet’s second biggest web market become mindful about composing new checks to youthful firms. In an open letter a month ago, a few unmistakable VC reserves cautioned new businesses that they may discover it particularly testing to bring new capital up in the following not many months.
For certain new businesses, there are different variables at play, as well. Over 69% of business-to-business new companies, particularly those working in retail and fintech classes, state in the report that they are confronting delays in installments from their customers.
This has left the greater part of such new businesses to implement pay cuts, decrease their advertising spends, and a fourth of them to change to a cheaper seller to set aside cash.
New companies working in vehicle and travel areas are additionally seriously affected, with 78% of respondents saying they were reevaluating their plans of action and tweaking their items as per the current situation.
In a call with correspondents on Tuesday, heads at Oyo disclosed new advances the spending dwelling startup had taken at its inns to guarantee security for administrators and clients. They additionally said they were trusting that New Delhi and state governments would permit more individuals to travel and remain at lodgings once more.
More than 66% of new companies additionally said they were searching for arrangements that facilitated guidelines and spike government buys. Numerous likewise mentioned help in assessments for a couple of years.
More than 66% of Indian new companies accept the effect of Covid will wait for as long as a year. (Nasscom)
Recently, India declared a $266 billion improvement bundle to help resuscitate the slowed down economy. On Saturday, Indian Finance Minister Nirmala Sitharaman said that new businesses excessively will have the option to get to a portion of this help — however subtleties stay meager on how they should go about it.
Since 2017, India’s startup environment has developed reliably. A year ago, new companies in the nation raised a record $14.5 billion.
“Out of nowhere, this prospering development adventure has abruptly been hit by a barricade… the COVID detour. There is no nation, business or living being that has not been influenced by the COVID pandemic. While governments have been working industriously to secure and spare living souls, organizations have been hit and independent ventures and new companies have been the most influenced,” said Debjani Ghosh, President of Nasscom, in the report.
Why there is no better time than now to invest in startups
Investments in the Indian start-up ecosystem surged 322 per cent in July year-on-year. They rose to $5.61 billion last month, against $1.33 billion in July 2019, according to data from Tracxn, a firm that tracks investments and financials of private companies and start-ups. The funding that went into Jio Platforms’ alone accounted for nearly 87 per cent of the total amount
The number of companies that garnered the investment, though, fell to 82 last month, against 120 in the same period in 2019.
Top-funded sectors
The top-funded sectors include telecom ($4,854 million), enterprise infrastructure ($236.2 million), ed-tech ($164.95 million), real estate- and construction-tech ($78.1 million), retail ($57.42 million) and media and entertainment ($53.90 million). The consumer sector, which encompasses online and technology-enabled consumer-facing companies in the business-to-consumer (B2C) space, raised $183.47 million.
While Jio Platforms, Nxtra Data, Vedantu, Zolo and Toppr were the top five funded companies in July 2020, the most active investors – based on the number of deals in July – included Mumbai Angels, Matrix Partners India, Accel, LetsVenture and Unicorn India Ventures.
