Private funding raised by internet companies fell to a 3 year low last quarter, with less than US$300mn being raised. For the full year CY16 as well, funding raised was down over 50% YoY at US$2.7bn. In this backdrop, we expect the themes of profitability-focus and consolidation to continue in 2017
Increased focus on profitability and consolidation (Makemytrip- Ibibo, Quikr-Commonfloor, Flipkart-Jabong, PayU-Citruspay amongst others) were two key themes that played out in the Indian internet sector over the last 12 months - we expect
these to continue in 2017.
We expect some down-rounds this year following up to news flow on valuation markdowns last year. Fin-tech companies are likely to see momentum and attract more funding as a positive fall-out of demonetization. Online/digital content (entertainment, education etc.) would be the other area to look out for this year. With increasing 4G penetration, falling data tariffs and the entry of large players like Netflix,
Amazon Prime Video and RJio's bouquet of content apps, the enabling infrastructure seems to be falling in place.
