“After three consecutive quarters of over USD 10 billion, the total funding Indian Startup Ecosystem During Q2 CY22 it declined by 40 per cent to reach USD 6.8 billion.
“The decline can be attributed to a global slowdown, lower tech stock valuations, inflation and geopolitical instability,” it added.
software as a service (mother-in-law) and fintech companies The second quarter of the calendar year (CY) 2022 had the highest share of funding, totaling over USD 3.1 billion, the report said.
It further said that the early-stage deals comprised more than 60 per cent of the total deal volume, with an average ticket size of USD 5 million.
Funding in early stage deals during Q2 CY22 remained stable at around USD 800 million and may remain stable or even increase over the next few quarters – given that the volume of venture capital along with growth in entrepreneurial activity continues to increase. It added that the fund is waiting to be deployed in the Indian market.
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“We expect that the overall funding landscape will take 12-18 months to stabilize, during which it will be beneficial for startups to extend their ‘funding runway’. No matter what stage the startup is in, they should keep a close watch. On the core business and ensure that the unit economics is strictly as per plan,” said Amit Navka, Partner – Deals and India Startups Leader, PwC India.
Valuations are likely to remain under pressure across all funding stages, mainly due to significant funding slowdown in late stage or initial public offering (IPO) deals, he said.
The report further noted that Bengaluru, the National Capital Region (NCR) and Mumbai continue to be India’s leading startup cities, together accounting for nearly 95 per cent of the total funding activity in the April-June quarter of 2022, followed by Chennai and Pune is the location.
In Bengaluru, more than US$100 million was raised by seven companies each in the second quarter of 2022 – Dailyhunt, Rapido, Leadsquare, Lenskart, CRED, Ather Energy and Observe.AI – primarily in the SaaS, and Logi and autotech spaces.
Seven companies in the NCR – Delhivery, StashFin, Rario, Gray Orange Robotics, Absolute Foods, Fashinja and Physicswala – raised more than US$100 million each.
The report said that four companies in Mumbai raised more than $100 million. These include Upgrade, Zepto, CoinDCX and Turtlemint.
Only four startups in India achieved unicorn status in the second quarter of calendar year 2022, reflecting the global trend of declining new unicorn numbers over this past quarter. Globally, the SaaS sector has crossed 1,200 with the maximum number of unicorns in the second quarter of CY22, followed by fintech.
With four new entrants in the April-June quarter of 2022, the number of Decacorns (startups valued at USD 10 billion) has reached 57 globally. PTI NKD CS HVA