Despite the pandemic gloom and doom of the past year, it wasn’t all bad news for Indian startups scouting for capital to ramp up their business. The country witnessed total deal value in venture capital (VC) funding touching $10 billion in 2020, the highest across all years barring 2019, finds the India Venture Capital Report 2021 by Bain & Company on Wednesday. In 2019, the total deal value recorded was $11.1 billion.

The report, released in collaboration with the Indian Private Equity and Venture Capital Association adds that India maintained its position among the top five startup ecosystems globally with 7000 new startups founded in 2020.

However, on the flip side, VC exits declined by about 70% to $1.3 billion in 2020 from $4.4 billion in 2019 due to the adverse impact of the pandemic on businesses and VC portfolios not reaching maturity in 2020. One-third of the exit value came from the edtech sector and about 20% from the foodtech industry, sectors that also saw a spike in end user adoption and funding activities during the pandemic.

“2020 was truly extraordinary as we saw Covid-19 have a significant impact on our economy and healthcare systems, while also accelerating digital adoption across sectors,” said Arpan Sheth, partner at Bain & Company in a statement, adding that, “This adoption led to a continuation of trends seen over previous years, including strong deal flow, focus on consumer tech and SaaS, and continued growth in startups.”

While the total deal value declined slightly to $10 billion in 2020 from $11.1 billion in 2019 due to smaller average deal size, deal volume grew by 7% with approximately 810 VC deals versus 755 seen in 2019, the report noted, adding that growth in deal volume, signalled strong fundamentals for the Indian startup ecosystem.

The report further added that consumer tech, SaaS, and fintech were the most funded sectors last year accounting for nearly 75% of all VC investments by value and 14 of 22 such deals were more than $100 million in size.

While consumer tech investments grew by 25% over 2019, there was a significant surge in the usage of edtech platforms, as well as growth in the average deal size in foodtech as compared to 2019. There was also a similar surge seen in the gaming industry.

“We also saw a noticeable shift towards specific segments seeing traction during and after Covid-19 such as edtech and foodtech, clear signs of maturity in SaaS, and pace of exits slowing down. Overall, we are bullish on VC investments going forward,” said Sriwatsan Krishnan, partner, Bain & Company.

According to the report, the Indian SaaS ecosystem continues to mature, accounting for the second-highest quantum of investments after consumer tech. Similarly, fintech investments grew in 2020 to $1.2 billion, versus $1.1 billion in 2019, with payments being the most sought-after segment.

Active VC funds in India, which have been on a steady growth trajectory over the last four years, reached a total of about 520 in 2020. In parallel, fundraising saw significant activity with a record-breaking $3 billion raised by India-focussed funds, the report noted.

Currently, of almost 110,000-plus startups in India, about 9% are funded, implying significant room for further investments, the report added.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.