Digital India drives $7.4 bn investments in Indian internet cos in 9 months

Indian internet companies have received investments worth $7.4 billion in the last nine months till September. This indicates a revival of interest among global investors as the country furthers its digital push to get more people to transact online.

According to data from researcher Tracxn, firms got $7.4 billion in the nine months till September as against $4.5 billion in 2016, when investors had shied away from putting their money on companies unless a profitable route was visible, Economic Times reported on Friday.

In the previous year, venture capital firms invested $7.6 billion on consumer startups that chased growth by throwing money to buy customers.

In 2017, Japanese investor Softbank added to the funding by refocusing its interest in India – through Paytm Mall and Flipkart – after its Snapdeal failure. Softbank had written off close to $1 billion in Snapdeal before it tried to engineer a merger with Flipkart, but the founders of the Delhi-based online marketplace wanted to remain independent.

In May, Softbank pumped in $1.4 billion through the Paytm Mall, which has taken the third place in the e-commerce market and around $ 2.5 billion in Flipkart, part of it to buy Tiger Global’s stake in the country’s largest e-commerce marketplace.

Besides this, Softbank backed its portfolio company OYO rooms with $250 million, continuing its streak of betting large amounts in Indian internet firms that is looking to disrupt traditional business models.

Data from Tracxn suggests that around $6.9 billion is in growth state deals, reiterating the fact that investors are backing winners than throwing money at every single internet company with a promising idea.

Since the launch of Reliance Jio last year, India has seen a massive jump in data usage, bringing in more small town users to access the internet. This has also resulted in increased online access to users who are consuming content and shopping online.