Increasing demand for online purchases prompted by the full- and partial lockdowns across the world during the pandemic has led to global investors showing a strong appetite for backing digital shopping, or e-commerce, companies, according to a new report.
Venture capital (VC) investments in the e-commerce space in India almost trebled in 2021, pushing the country’s rank to number two on the list, reveals a report by London & Partners and Dealroom.co. Currently the world’s third-largest startup ecosystem, India got investments totalling $22 billion in the e-commerce space from VCs in 2021 against $8 billion in 2020, according to the report released on Wednesday.
India is now only behind the US that netted $51 billion in the same period, but is ahead of China that got $14 billion in the e-commerce space in 2021. According to the report, the total global VC investments for 2021 in the digital shopping space, stood at a record $140 billion--up from $68 billion in 2020.
The report reveals that Bengaluru, which was recently dethroned by Delhi NCR as the country’s startup capital, took the top spot among global cities with $14 billion worth of VC investments in digital shopping in 2021, up from $5 billion in 2020. Bengaluru ranked above other leading cities in the world, including New York City, San Francisco and London, the report said.
Bengaluru was followed by Gurugram, which ranked seventh with $4 billion and Mumbai that ranked 10th with $3 billion. Bengaluru and Gurugram were also among the world’s top 10 unicorn producing cities, and created 19 and 13 unicorns respectively in 2021, the report showed. Unicorns are startups with over $1 billion valuation.
The report further showed that Bengaluru ranked number fifth among cities with the potential for future unicorns, just behind London. Three of the 15 global cities with the highest count of current unicorns are in India--Bengaluru at number 6 with 19 unicorns in 2021, and up from 3 in 2020, Gurugram at number 7 with 13 unicorns, up from 3 in 2020 and Mumbai at number 14, with 7unicorns.
According to the report, London was the leading European hub for digital shopping investment, with London-based companies raising a record $5 billion in 2021. London also ranked fourth on the global stage, behind San Fransisco, New York and Bengaluru, the report showed.
“It’s fantastic to see Bengaluru emerge a global leader for digital shopping investment last year. This surely creates several opportunities for collaboration with an already strong market in London. As Europe’s largest hub for digital shopping investment, there has never been a better time for India’s strong pool of fast-growing e-commerce companies to choose London as the destination to scale their business outside of their home market,” said Hemin Bharucha, CountryDirector, India at London & Partners.
The London & Partners and Dealroom.co report comes in the backdrop of record sales clocked by e-commerce companies in India in 2021. Just in the festival month of October, e-commerce companies in the country had clocked sales worth $9 billion. Amazon.com Inc, the world’s largest e-commerce company, had said in its annual report of 2021, that the company had clocked record sales of $100,000 in its month-long ‘Great Indian Festival’ event.
