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This article is written by Amarnath Simha, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from LawSikho.


India has more than 38K startups.  The internet revolution has made the same possible and vice versa these startups are at the forefront of the said revolution.  These startups deal with everything from electric vehicles to e-commerce and innovation is their mantra.  By definition, a startup is a new company with e-innovative solutions and basically technology-oriented ones with only a shoe-string budget to begin their businesses.  The initial funding is from the founders themselves, their families, and friends.  These startups become successful when their ideas and innovations are able to find financing from angel investors and venture capitalists for expanding them. They undergo multiple rounds of valuation and fundraising with a view to expanding these businesses.  

The Indian government definition of startups

The Indian government launched the ‘Startup India‘ initiative on 16 January 2016 to build a strong ecosystem to nurture innovation and entrepreneurship.  This was done to promote innovation, development, or improvement of products or processes or services, or if it’s a scalable business model with a high potential of employment generation or wealth creation.  Some tax reliefs are sought to be given for raising funds though this aspect is not fully clear and has turned somewhat controversial.  According to the notification issued by the Indian government, a startup ceases to be a startup after 7 years of founding or when able to cross an annual turnover of Rs.25 crores in any preceding financial year.  But in the general sense, startup meaning is not restricted to the definition in the notification but only as a new company that is seeking backing by private financiers who are investing in the idea and innovations which the startups are promising.

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Unicorns and IPOS

Unicorn is a status that is most sought after by startups.  Unicorn status is a term introduced by venture capital investor, Aileen Lee, in 2013 describing rare tech startups that were valued at more than 1 billion American dollars.  Valuation is based on more than a few parameters and ultimately it is the money that is able to be raised by these startups that would count.  In the year 2020, around 11 Indian startups joined the Unicorn club taking the total to around 49. They are Unacademy, Postman, Firstcry, Zerodha, Cars24, Razorpay, Nykaa, zenoti, Pinelabs, dailyhunt, and glance.  Except for Pine Labs which was founded in 1998, all the others were founded after 2009.  Unacademy joined Byju’s in the edtech unicorn status.  

Initial Public Offering becomes the ultimate round of fundraising.  Around six startups are seeking to go for IPO in 2021.  These startups are Zomato, Policybazaar, Flipkart, Grofers, Delivery, and droom. in.  All these startups are technically not startups as per the definition of the Indian government but they all started as startups.  Interestingly none of these startups are operating at profits but are continuously raising funding based on the valuation.  Therefore the parameters which the investors look at are different but how these companies hold after IPOs become successful is yet to be tested.  Because the small investors will want dividends which require the companies to earn profits as per the Companies Act, 2013.  Hence, IPOs could mean that the rubber meets the road where the startups without the multiple rounds of funding as earlier have to survive only on profits generated.

Mergers and acquisitions

Mergers and Acquisitions have actually grown in the startup sector in 2020 and 2021 in spite of Covid-19.  Some rules like banning a few Chinese apps also put the spotlight on the Indian startups and have made them advantageous.  

Samunnati acquires Kamatan

Agriculture finance and value chain startup Samunnati on Monday announced that it has completed a 100% acquisition of Agri logistics firm Kaamatan, an agricultural-technology startup that focuses on the agricultural logistics and supply chain segment, in a share swap deal in March 2021.  Kamatan was founded after agri-tech startups Sabziwala and LivLush, which are both backed by impact venture capital fund Elevar Equitymerged their businesses in March 2020.

Unacademy acquisitions

Edtech startup Unacademy is on an acquisition spree.  Its latest acquisition is Neostencil which is a test preparation platform focused on government jobs.  Unacademy had earlier acquired UPSC test preparatory platform Coursavy in September 2020.  It has acquired Chef, K-12 learning platform Mastree and PrepLadder, a postgraduate medical entrance exam preparation platform.   Unacademy’s acquisition of Neostencil will further cement its position in the market while also enabling it to reach more Tier-II and Tier-III cities in India.  Neostencil was founded in 2014 which has a live-learning platform helping over 100 coaching centers go the life and around 15000 students go online from the comfort of their homes at the same time.  Around 500 courses are offered to over 11 lakh students.  

Cure. fit acquires Fitternity

In February 2021, Cure. fit acquired Fitternity which is a Bengaluru-based fitness aggregator platform.  Cure. fit is a health and fitness company offering digital and offline experiences across fitness, nutrition, and mental well-being.  CureFit gives workouts a whole new meaning with a range of trainer-led, group workout classes.  A press statement by Cure. fit has stated that with a total user base of three million users, Cure. fit and Fitternity with each other will empower more than 5000 fitness centers spread across the top 20 cities in India.  There is an expectation of around 50 to 100 percent increase in the footfalls with the acquisition

Lenskart acquires DailyJoy

Lenskart, a Delhi-based startup, has acquired DailyJoy, a Hyderabad-based delivery startup, to boost its technology stack and engineering capability.  Considering that DailyJoy is an essential and grocery delivery startup, the acquisition is only in respect of the Acquihire to augment the company’s team strength and leveraging its tech expertise.  Lenskart seeks to make Hyderabad a base for quality and consistent engineering to support its growth.  Lenskart was founded by Bansal, Amit Chaudhary and Sumeet Kapahi.  It is an eyewear brand that manufactures, assembles, distributes, and supplies to around 500 stores across India.  It deals with eyeglasses, powdered sunglasses, and contact lenses.  

MPL acquires GamingMonk

Mobile Premier League or MPL is a Bengaluru-based startup that is an esports and skill gaming platform.   It was acquired in April 2021, for an undisclosed amount, GamingMonk which is a Delhi-based esports streaming platform while holding esports tournaments across various platforms like mobile, console, and PC.  The tournaments range from FIFA, Counter-strike, and call of duty while also streaming these tournaments.  MPL has absorbed the entire team of GamingMonk. MPL hosted around 30 games and had 25 million players while GamingMonk had a registered user base of around 1.3 million players.  

upGrad acquires Rekrut India

upGrad is an online higher learning ed-tech startup co-founded by Ronnie Screwvala in 2015 and based in Mumbai, India, and offering courses on data analytics, product management, entrepreneurship, and digital marketing. In September 2016, the Government of India appointed it as the official education partner for Startup India learning program.  Rekrut India is a startup with a recruitment and staffing solutions company that supports organizations in building human capital.  upGrad acquired Rekrut India in December 2020 with the size of the deal being undisclosed.  It is the first time that a 100% acquisition has been done by an ed-tech startup or a recruitment startup.  This would now pitch upGrad against  According to founders of upGrad, this would lead the former and current students of upGrad, including their alumni network, to get access to Rekrut’s hiring network which is quite strong.  Post the acquisition also, Rekrut India is to operate independently.  

ClickIndia acquires Directly. live

Clickindia is a classified platform, providing an easy way to search, buy or sell, exchange, to interact for common interests.  Directly. live is a software-as-a-service (SaaS) startup that helps schedule meetings wherein individuals and organizations can integrate its platform into their systems and have video calls with each other.  Clickindia acquired directly. live in an undisclosed amount all-cash deal in March 2021.

Stritmedia acquires Fleapo

Stritmedia is a four-year-old Kolkata-based company that operates in Ad & News Media house +affiliate marketing sector. It acquired in December 2020 Fleapo Pvt Ltd at an undisclosed amount leading to the launch of a new brand called Sinofled Pvt Ltd.  Fleapo operates in the segment of software and application development.   Apart from the acquisition, STRITMedia would pump in around 100K USD towards expansion plans, team building, and the services section of the brand.  

Flipkart acquires Scapic

Flipkart in November 2020 acquired Augmented Reality (AR) startup Scapic with the purpose of making the shopping experience more immersive on its platform. The financial details of the deal were not disclosed by Flipkart.  It absorbed the team of Scapic as a part of the acquisition.  It is a part of Flipkart to provide deeper camera experiences, virtual storefronts, and new opportunities for brand advertising on its platform. 

EY India acquires Spotmentor technologies

EY is a global leader in assurance, consulting, strategy and transactions, and tax services.  In November 2020, EY India acquired, for an undisclosed amount, Spotmentor technologies which is an end-to-end skilling platform to help businesses identify skills required for the future of work, upskilling, and reskilling talent at scale.   It leverages emerging technologies such as artificial intelligence and machine learning to help close the critical competency gaps in an organization.  


The startup sector is blowing up in India.  Even though there was a slight downturn during 2017-2019, it is now again picking up.  Hence, the number of mergers and acquisitions is only going to increase in India.  


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