Illustration in Rediff

On a global scale, India came in second to the US last year, which attracted $51 billion in investment, followed by China at third with $14 billion and the UK at fourth with $7 billion.

Within India, Bengaluru comes out on top globally with $14 billion worth of Venture Capital (VC) investments in digital shopping in 2021, followed by Gurugram at No. 7 with $4 billion and Mumbai at No. 10 with $3 billion.

Bengaluru almost tripled its investments from $5 billion in 2020 to take the top spot, ahead of other leading cities in the world – New York City (second), San Francisco (third), London (fourth) and Berlin (fifth).

According to the London & Partners analysis of Dealroom.co investment data, increasing demand for online purchases during a series of lockdowns across the world during the COVID-19 pandemic led to global investors showing a strong appetite for backing e-commerce companies.

“Today's data shows that the UK and India are two of the world's leading hubs for digital shopping companies with high levels of global investment and unicorns,” said Hemin Bharucha, country director, India at London & Partners – the Mayor of London's international trade and investment agency.

“It's fantastic to see Bengaluru emerge a global leader for digital shopping investment last year.

"This surely creates several opportunities for collaboration with an already strong market in London.

“As Europe's largest hub for digital shopping investment, there has never been a better time for India's strong pool of fast-growing e-commerce companies to choose London as the destination to scale their business outside of their home market,” he said.

The data also shows that Bengaluru ranked number 5 among cities with the potential for future unicorns, just behind London.

Three of the 15 global cities with the highest count of current unicorns are in India — Bengaluru at No. 6 with 19 unicorns in 2021 (up from three in 2020, Gurugram at No. 7 with 13 unicorns (up from 3 in 2020) and Mumbai at No. 14 with 7 unicorns.

London is the leading European hub for digital shopping investment, with a record $5 billion raised by digital shopping companies based in the capital in 2021.

Notable investment rounds into London-based digital shopping companies in 2021 included: $180 million series H funding round for online food delivery service, Deliveroo; $150 million raised by online used car marketplace, Carzam; and $55 million raised by online dog-food delivery service, Butternut Box.

“London has always been a city with a distinct creative style that comes from the grassroots and the street,” said Julia Hawkins, partner at venture capital firm LocalGlobe.

“The huge growth in e-commerce has pushed many consumers into communities where they can find their tribe.

"Combining London's creative flair with e-commerce and embedded fintech can create new opportunities for start-ups in London that the rest of the world will look to," she said.

Overall, global venture capital investment into digital shopping more than doubled in 2021 following a significant consumer shift to e-commerce platforms during the pandemic.

The total global VC investment for 2021 stood at a record $140 billion, up from $68 billion in 2020.

London & Partners said the figures relating to investment into digital shopping companies are based on analytics firm Dealroom.Co's definition of online marketplaces, which supplied the VC investment data as of February 15 this year.