Chinese investments in Indian start-ups grow 12 times to $4.6 billion in 2019: GlobalData

There has been a 12 times growth of Chinese investments in Indian start-ups over the past four years to $4.6 billion in 2019 from $381 million in 2016 with a majority of unicorns in India being backed by corporates and pure-play investment firms from China, according to data and analytics firm GlobalData.

An analysis of the deals database of GlobalData's Disruptor Intelligence Centre showed 12 times growth of Chinese investments in Indian start-ups over the past four years from $381 million in 2016 to $4.6 billion in 2019.

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The majority of the unicorns in India (17 out of 24) are currently backed by both corporates and pure-play investment firms from China, predominantly Alibaba and Tencent, GlobalData said.

Alibaba and its affiliate Ant Financial along with others invested over $2.6 billion in four Indian unicorns (Paytm, Snapdeal, BigBasket and Zomato), while Tencent alongside others invested more than $2.4 billion in five unicorns (Ola, Swiggy, Hike, Dream11 and BYJU's), it added.

Unicorns are the start-ups that have a valuation of $1 billion or above.

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Other notable Chinese investors active in the Indian start-up ecosystem include Meituan-Dianping, Didi Chuxing, Fosun, Shunwei Capital, Hillhouse Capital Group, China Lodging Group, and China-Eurasia Economic Cooperation Fund.

Until last year, undeterred by any geopolitical tensions, China placed considerable bets on Indian tech start-ups anticipating significant growth in the medium-to-long term, Kiran Raj, principal disruptive tech analyst at GlobalData, said.

"However, the recent border conflict and the tightening of India's FDI (foreign direct investment) policy amid Covid-19 as a caution to avoid takeover or acquisition of distressed assets by border-sharing nations may turn a blockade to Chinese investors in achieving their investment goals," he added.

Nevertheless, it is only a temporary measure and the long-term impact can only be realised in the future given the significant bilateral investment relations between the two countries, he said.