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The list of new overseas investors funding Indian startups narrowed this year from 2019 as the pandemic created uncertainty and kept many in wait-and-watch mode. The number of such investors dropped to 24 so far this year from 71 last year, according to data by Venture Intelligence, a data aggregator firm for private sector.

Investors from the US lead the pack this year. Meanwhile, the number of new Chinese investors fell from 5 in 2019 to 2 this year which saw the government introduce strict curbs from April on investments from nations with which India shares a land border. Also, investors from Korea, Germany, Hong Kong and Switzerland, which backed multiple startups last year, did not make any new commitment this year.

The pace of funding, however, is likely to pick up in December as more funds from South-East and West Asia are coming in to back startups, particularly in gaming, agritech, health, and fitness.

In October, regional language gaming platform WinZO raised $18 million in a Series B funding round led by Singapore-based Makers Fund and New York-based Courtside Ventures, and existing investors like Kalaari Capital. This was the first investment in India for both Makers and Courtside.

“Courtside Ventures is excited about the growth and scale of the Indian market. We believe that there are tremendous opportunities in gaming, fitness and sports. We invest from Seed to Series B and hope to continue our investments in 2021," said a firm spokesperson.

Overseas investors are eyeing the half-a-billion internet users in the country, who have been forced to go digital and embrace everything from e-commerce to digital payments. The impact of the pandemic played a big role in this as investors were not sure as to which direction this will take and, therefore, the first quarter was a washout, said Nitish Poddar, partner and national leader, private equity, KPMG in India.

“However, we have seen activity once things settled down through a number of edtech and staple delivery transactions. As things open up and the impact that the pandemic has had on various sub sectors gets clearer, the pent-up activity will gather steam and will result in a flurry of activity in the startup space. There is continued interest in Indian startups and we have just touched the tip of the iceberg," Poddar said.

Besides e-commerce and edtech, which have seen huge traction as shopping and learning moved online, software-as-a-service (SaaS), e-business to business and logistics are also attracting investors as these are ripe for digital disruption and have great market potential and ability to scale.

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