The tech ecosystem in India entered a new year of development, where a majority of the startup IPOs on the deck set to get investments and churn the recovery faster in the post-pandemic era.

Last year, amidst the covid attack, PE-VC (private equity and venture capital) deals reached $39 billion in 814 deals which was led by the country’s one of the major business heads Reliance Retail’s Jio Platform wing’s owner Mukesh Ambani.

This year, Indian VCs (venture capitalists) believe that the investment deal flow will continue outshine the previous years as the global funding stack aims to unlock the potential of the Indian startup ecosystem.

The Managing Partner at Orios Venture Partners, Anup Jain, regarding this said that 2021 will be a flourishing year for the tech economy in the country. He said, “While foreign investors are extremely bullish about it, domestic investors and even large corporates have been largely bystanders past 10 years waiting for the change to reach a certain critical mass. The investors will now jump in or be left out of the handsome gains that will be accrued in the next 10 years, by participating in the tech economy.”

Stats suggest that the divisions of internet subscribers are 749 million in total, smartphone devices include 500 million, social media accounts include 376 million and daily time on mobile is a total of 4.8 hours (HDFC Securities report on December 17, 2020).

The internet growth of the country will witness the flourish in the following divisions (where VCs are betting) –

Edtech – Paradigm Change of Education

This is a sector which witnessed a high growth last year. Experts dedicated 2020 as the year of edtech in India, where schools and colleges remained close because of the covid pandemic.

Now, the country’s education technology startups are standing at the front gate of online transitions of schools. In 2020, edtech startups acquired a total of $2.2 billion, and VCs believe that the money will continue to flow into the sector.

Fintech – The Next Big Bet

With internet penetrating in India’s hinterlands, the adoption of the digital payments and financial tech instruments will be increasing allover the country.

Also, VCs believe that the fintech cos will be steering the growth.

Jain said, “If 2020, the year of the pandemic, was all about edtech and health tech, 2021 will be the year of Fintech in India. Consumers and businesses alike have made substantial changes to the way they lead their lives and businesses and set new goals and practices for saving, investing and spending."

Anup Jain lists that the financial services or neo-banking ecosystem, wealth creation and management will rule big in fintech alongside with “Consumer tech consumption, equivalent to e-commerce, will get reflected in the discovery and purchase of financial products and services.”

E-commerce – Continuous Expansion

As the coronavirus pandemic affected offline gatherings and crowd at restricted places, offline retail was affected hugely.

This also directed India’s e-commerce firms to increase their business along the grocery retail.

Topnotch sites like Amazon and Flipkart witnessed the number of sellers grow on their platforms. JioMart, BigBasket, and Grofers also had order volumes increase and their application downloads grew amid pandemic.

VCs believe that e-commerce boom will continue to linger in the new year and durable the maximum shift to online has been durably increased to over 50 million users.

All incumbents’ brands welcomed it and the brands are now providing a good experience.

The sector will go on increasing and the new retail – formats and omnichannel, social commerce, warehousing, and more is stored with innovation as said by the founding partner WEH Ventures – Deepak Gupta.

Within the e-commerce sector, the direct to consumer or DTC brands that deliver directly from their websites saw a massive growth in2020. These sites are now witnessing investor appetite increase with brands like boAt acquiring $100 million in funding already in 2021.

Software-as-a-Service – Travel Along Digitalization Benefit

Software-as-a-Service, publicly termed as SaaS is one of India’s biggest performers with huge bets on it.

This sector comprises unicorns like Freshworks, Zoho, Druva, Zenoti, and Icertis, where experts believe that offerings in SaaS are far from over.

The Managing Partner of Inflex Ventures, Jatin Desai, said that they expect the adoption of SaaS products to become more widespread as people got to know the advantage of digitalization during the pandemic battle. The cyber security companies with even hairscratch data leaks or data thefts restriction assured people of the ingenuity of the digital space.

Space – Agri and Electric Vehicle – Some Other Holistic Sectors

VCs are also betting on the following sectors - SpaceTech, AgriTech, InsurTech and Electric Vehicles Infrastructure.

The Managing Director of Bertelsmann India Investments, Pankaj Makkar stated that the sectors of e-commerce, e-commerce logistics, direct-to-consumer, Edtech, HealthTech, and a fraction of FinTech sector will be doing well this year.

Pankaj also told that he believes in the consolidation of the India’s tech ecosystem. He said that there will be Mergers and Acquisitions completion as competitors might join hands due to the less space of growth.