Similar to the last quarter, Q3 FY13 was seen to mark the internet space with a lot of turnarounds. This time the Digital Services sector was in the limelight, drawing the maximum number of deals. As usual the deal amount remained undisclosed in majority of cases.
The introduction of startup batches by accelerators and incubators like TLabs, Blume Ventures, IAN, VentureNursery etc., along with the announcements of international companies looking to invest in Indian startups, has raised the hopes of new entrants in the internet space.
Below is a brief roundup of the investments and acquisitions that left a significant impact in Q3, 2013.
*For analysis purpose, only the disclosed amount has been taken into consideration
1. Total number of deals: Around 60 deals were made in this quarter, including 50 funding investments and 10 M&A, whereas approximately 70 deals were made in the previous one. The deal amount was revealed only in 28 of the investments, in contrast to 34 out of the 56 investment deals made in Q2.
These deals were made across several categories of eCommerce, Digital Services, Mobile, Online Real Estate etc. In terms of the number of deals, digital services emerged as the leading sector with startups like Kuliza, Airwoot, Snaplion, Kartrocket etc., gaining attention from the major investors.
**‘Others’ category in the above graph includes miscellaneous fields like websites offering coupons, food ordering, product comparison etc.
2. Leading investment sector: Discontinuing the trend seen in the last two quarters, this time Data analytics and Cloud technology sector was leading instead of eCommerce. The total disclosed funding amount to a net USD 55.067 Mn, with approximately USD 11.15 Mn in the Data analytics segment, followed by eLearning and eCommerce with USD 10 Mn and 7.78 Mn, respectively.
3. Leading investors: The third quarter was led by venture capital investors, investing an amount of approximately USD 43.3 Mn across 10 deals, which makes it 78.63% of the total disclosed funding invested. However, the VCs invested in a total of 19 deals this quarter, with Helion Venture Partners and Kalaari Capital together making the biggest VC investment of USD 10 Mn in Simplilearn. Considering the volatility involved in the internet space, there were only a few deals in which investments were done by a single investor.
**‘Others’ category includes corporations, accelerators, individuals etc.
4. Major acquisitions across different categories: As compared with the 16 acquisitions in Q2, with a disclosed value of around USD 160 Mn, there were only 10 major acquisitions in this quarter. 7 out of these 10 deals were made in the Digital Services sector, making it dominate in acquisitions segment as well.
5. Notable developments: This quarter witnessed a number of initiatives, which included few offline players like Latin quarters, Moserbaer, Titan Industries, Provogue, Indian Terrain going online, CCAvenue and Martjack launching their online marketplace and IRCTC also foraying in eCommerce via its own marketplace. MICA and Sify Technologies have set up funds to invest in startups. International early-stage startup fund The Hive launched its operations in India.
Some interesting startups that came up included Rolling Nature, an online store to buy plants; iForIndia, an online portal to rate elected political representatives, Madhuri Dixit’s online dance academy and a new job portal GotKaam.
6. International deals: There were approximately 85 major deals internationally. Yahoo continued being the most active company even in this quarter, acquiring 10 other companies. But the biggest acquisition in Q3 was Microsoft acquiring Nokia Devices and Services business for USD 7.17 billion. Another important announcement was of Blackberry’s buyout plan of USD 4.7 billion to be led by Fairfax Financial.
As per the recent report by Avendus, M-Commerce will soon become a major revenue source for Indian Internet businesses. Considering the current trends, not only the Indian investors, but also the investors globally are even more keen to invest in Indian startups. With rising scope for cloud computing and SaaS services in India, the complete internet ecosystem is passing through an entirely new mainstream. This could lead to a stage in which a combination of all, viz. internet, mobile and cloud computing will become a trend in itself.
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