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2020 funding in startups catering to modest small business tech adoption, access to finance jump despite Covid

Credit and Finance for MSMEs: Investments in early-stage enterprises catering to technologies adoption amongst modest and medium enterprises (SMEs) in 2020 improved to $51 million across nine bargains from $6 million in 2019 as investors jumped onto the chance involving digitisation of SMEs to boost their small business efficiency in the Covid period. Investments in such startups focusing on enhanced usage of technologies amongst SMEs accounted for 16 per cent of the total tech investment in 2020 up from 3 per cent final year. The total investments stood at $331 million across 34 bargains in 2020 in comparison to $188 million across 43 bargains, according to a report on influence investments in 2020. Among top rated startups, which focused on the SME technologies sub-segment, raising capital in 2020 integrated PagarBook, FloBiz, and Salesken. Overall, influence enterprises raised about $2.6 billion across 243 equity bargains and saw 13 productive exits in 2020, the report titled India Impact Investment Trends by India Impact Investors Council (IIC) added.

Similarly, investments in startups catering to access to finance for SMEs saw 17 bargains involving $310 million accounting for 44 per cent of the total deal worth in 2020 up from 31 per cent in 2019. The SME finance sub-segment saw enhanced interest with investments each at early-stage and late-stage enterprises such as Khatabook, MoneyTap, and Setu. Among top rated startups in the sub-segment raising capital in 2020 integrated Incred, Aye Finance, Veritas, Lendingkart Finance, Finova Capital, SMEcorner.

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“The Indian impact investing sector is clearly coming of age. Notwithstanding the pandemic, Indian impact enterprises have proved to be resilient: we see continued interest from investors in investing in a variety of innovative tech-led impact ideas,” stated Ramraj Pai, CEO, IIC. The not-for-profit business body IIC aimed to strengthen influence investing in the nation by means of advocacy and policy assistance, analysis, and publications. The body was supported by more than 40 investors and partners such as Aavishkaar Group, Omidyar Network India, Michael and Susan Dell Foundation, Elevar Equity, and Caspian Investment Advisors, and so forth. Out of $2.6 billion invested in 243 bargains, 26 per cent was poured into monetary access of enterprises followed 25 per cent in the education sector, 17 per cent towards agriculture companies, 8 per cent in the healthcare segment, 13 per cent towards technologies improvement, and 11 per cent for other sectors.

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