The logo of OYO Rooms, operated by Oravel Stays Pvt. Ltd., is displayed outside a hotel in Ooty, Tamil Nadu. (Photographer: Dhiraj Singh/Bloomberg)

India Venture Capital Market Saw Investments Of Over $2 Billion In Q3

India's venture capital market saw large sequential growth during the third quarter of 2018 with over $2 billion being invested, according to a report by KPMG.

"More than doubling the tally observed in Q2, the Indian venture ecosystem saw well over $2 billion invested last quarter, even as aggregate volume remains subdued," KPMG said in its Venture Pulse Q3 2018 report.

Hotel booking company Oyo Rooms alone accounted for $1 billion of this. The funding round—led by SoftBank Investment Advisers through SoftBank Vision Fund—had positioned it as India’s second most valuable technology startup after Paytm. Oyo has now leaped well into its unicorn status with a $5 billion valuation.

Even though Oyo’s fundraise comprised a large share of that, the report suggests that India's on-going focus on consumer-oriented enterprises is still going strong.

India also saw several $100 million-plus mega deals this quarter, including $225 million by Udaan, $120 million by CureFit and 100 million by BookMyShow, it added. Besides, online marketplaces continued to gain a lot of traction during the quarter under review, with second-hand car company Cars24 raising $50 million.

The top 10 financing rounds in the third quarter in the Asia Pacific region were Singapore's ride sharing platform Grab that raised $2 billion, followed by Bitmain from Beijing and Oyo Rooms, with each raising $1 billion.

Xpeng from Guangzhou and Ximalaya from Shanghai raised $596.2 million each in the said quarter, the report said.

Nitish Poddar, Partner and National Leader Private Equity, KPMG in India, said internet commerce is at a very exciting stage in India. "Mobile penetration driven by strong demographics is what will drive the growth in the industry. Given the working age proportion of population in the country, consumer-led internet businesses will continue to see significant growth in the near future," he said. These, he said, include food, travel, auto and commerce.

Also read: Indian Hotel-Booking Startup Oyo Raises $1 Billion to Fund Overseas Push

"Fintech is also at a very exciting stage in the country—the government's push to electronic money coupled with growth in internet commerce will see a significant growth in this space—payment gateways, online insurance and micro loans will stand to benefit," Poddar said.

The report said that India's mergers and acquisition market had soared to a "record annual high" during Q3 2018, reaching above the $100 billion mark for the first time in history. While some industry consolidation has helped spur the mergers and acquistion activity, the tech market has played a large part in the rise," it said.

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