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Business Trends which shaped last 3 months of start-up ecosystem (Q3 2021)
Business Trends which shaped last 3 months of start-up ecosystem (Q3 2021)

November 24, 2021

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India’s start-up ecosystem has established itself over the years. Now we have legacy sectors like Fintech, Enterprise Tech, RetailTech and HealthTech which represents a major chunk of the start-up ecosystem, emerging sectors like Edtech, FoodTech, SCM Logistic etc. and few sectors like proptech, social commerce etc. which are in nascent stage. Start-ups under these verticals keep evolving and innovating. So what happened among these start-ups verticals in the last quarter?

  • ~50% deals were in 3 specific verticals - Enterprise Tech, FinTech and Ed Tech
  • Large ticket deals helped EdTech and FoodTech to account for more than 46% of total funding
  • FoodTech though stands high in term of deal value but due to monopolistic model it lacks far behind in deal volume 

Fintech Trends:

  • FinTech continues to dominate by raising 16% of the total Q3 CY21 funding and add 2 new unicorns: CoinDCX, BharatPe
  • Payments and BFSI investors raised ~55% of total Fintech funding
  • Growth- stage funding dominated funding deals by value (~73% share)
  • Crypto Fire: Due to high growth, increased popularity and adoption Crypto has seen a major boom, large entrepreneurs and VCs are actively investing in Crypto start-ups
  • IPO Season: Many Indian Fintech start-ups have filed their DHRP with SEBI, plan to raise up to US$ 3.7B through IPOs
  • Buy Now Pay Later: Low credit card penetration in India and digital payment boost is helping this area to grow, a high potential market which is expected to reach US$ 100B by 2025

 HealthTech Trends:

  • E-pharmacy, teleconsultation, personal health management, EHR/EMR and increasing use of AI/ML gain traction
  • Preventive healthcare is expected to act as a catalyst for HealthTech growth in the next 5 years
  • New, more digitally educated consumer segments are pushing for innovative health and wellness solutions

RetailTech Trends:

  • RetailTech continues to see good momentum with 16% of the total Q3 CY21 funding
  • Marketplaces catch investor’s eyes and raised  ~25% of total RetailTech funding. B2B marketplace is getting lot of traction.
  • Aggressive national and overseas expansion: Lenskart is looking to expand into Southeast Asia and Middle East with proceeds from recent round of US$ 220M

EnterpriseTech Trends:

  • India’s EnterpriseTech sector remains attractive driven by increasing demand for tools in the world of big data, cloud, mobility, IoT and cybersecurity
  • SaaS / AI continue to attract investor’s interest with ~81% of total EnterpriseTech funding
  • Growth - stage funding dominated with 56% of total EnterpriseTech funding
  • Strong growth in EnterpriseTech is driving investments in reskilling the talent in new growth areas such as SaaS, cybersecurity, AI, 5G, IoT, product engineering
  • SaaS companies building strategies around penetrating SMB market, small retailers, large SaaS companies setting up office in rural and non-urban areas
  • Rise in cyber threat increases demand for AI driven products / solutions

Edtech Trends:

  • Received funding of ~$1.5 bn in Q3CY2021
  • EdTech is going consolidation phase start-ups with mature start-ups focusing on expansion and newer start-ups building innovative solutions
  • EdTech platforms focus on holistic curriculum to attract new-age learners, platforms have also expanded to domains other than academics
  • 3 unicorns added: Vedantu, upGrad, and Eruditus

Verticals are evolving and getting innovate with time. On one side legacy sectors sees addition on newer start-ups and stock market listing while emerging sectors are expanding their business portfolio to increase their reach and penetration. A lot is happening in this start-up era.


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