New Delhi: Geopolitical volatility is taking a toll on Indian startups, with total funding falling 40% to $6.8 billion in the April-June quarter, shows a PwC India report.
According to PwC India report ‘Startup Deal Tracker – Q2 CY22’, the average ticket size of over 60 per cent of the total in early-stage deals was $5 million.
“After three consecutive quarters of raising over $10 billion, total funding in the Indian startup ecosystem fell 40 percent to $6.8 billion during Q2 CY22.
“The decline can be attributed to a global slowdown, lower tech stock valuations, inflation and geopolitical instability,” it added.
software As a service (SaaS) and fintech companies had the highest share of funding in the second quarter of calendar year (CY) 2022, totaling over $3.1 billion, the report said.
It further said that early-stage deals comprised more than 60 percent of total deal volume, with an average ticket size of $5 million.
Funding in early-stage deals during Q2 CY22 remained stable at around $800 million and may remain stable or even increase over the next few quarters – given that entrepreneurial activity is fueled by increased digitization as well as venture capital funding. increasing with the quantity. It is waiting to be deployed in the Indian market, it added.
“We expect it to take 12-18 months for the overall funding landscape to stabilize, during which it will be beneficial for startups to extend their ‘funding runway’. No matter what stage a startup is in, they should keep a close eye on it. on core business and ensure that unit economics is strictly according to plan,” said Amit NavkaPartner – Deals and India Startups Leader, PwC India.
Valuations are likely to remain under pressure across funding phases, primarily falling below a significant funding slowdown in the late phase or initial public offering (IPO) deals, he said.
The report further stated that Bengaluru, National Capital Region (NCR) and Mumbai continue to be major startup cities in India, together contributing to nearly 95 per cent of total funding activity in the April-June quarter of 2022, followed by Chennai and Pune.
In Bengaluru, over $100 million was raised by seven companies each in the second quarter of 2022 – Dailyhunt, Rapido, LeadSquare, county mapCRED, Ather Energy and Observe.AI – primarily in the SaaS, and Logi and autotech space.
Seven companies in NCR – Delhivery, Stashfin, Rario, Gray Orange Robotics, Absolute Foods, Fashinza and physicist – Each raised over $100 million.
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 worth $10 billion) globally has reached 57.
According to PwC India report ‘Startup Deal Tracker – Q2 CY22’, the average ticket size of over 60 per cent of the total in early-stage deals was $5 million.
“After three consecutive quarters of raising over $10 billion, total funding in the Indian startup ecosystem fell 40 percent to $6.8 billion during Q2 CY22.
“The decline can be attributed to a global slowdown, lower tech stock valuations, inflation and geopolitical instability,” it added.
software As a service (SaaS) and fintech companies had the highest share of funding in the second quarter of calendar year (CY) 2022, totaling over $3.1 billion, the report said.
It further said that early-stage deals comprised more than 60 percent of total deal volume, with an average ticket size of $5 million.
Funding in early-stage deals during Q2 CY22 remained stable at around $800 million and may remain stable or even increase over the next few quarters – given that entrepreneurial activity is fueled by increased digitization as well as venture capital funding. increasing with the quantity. It is waiting to be deployed in the Indian market, it added.
“We expect it to take 12-18 months for the overall funding landscape to stabilize, during which it will be beneficial for startups to extend their ‘funding runway’. No matter what stage a startup is in, they should keep a close eye on it. on core business and ensure that unit economics is strictly according to plan,” said Amit NavkaPartner – Deals and India Startups Leader, PwC India.
Valuations are likely to remain under pressure across funding phases, primarily falling below a significant funding slowdown in the late phase or initial public offering (IPO) deals, he said.
The report further stated that Bengaluru, National Capital Region (NCR) and Mumbai continue to be major startup cities in India, together contributing to nearly 95 per cent of total funding activity in the April-June quarter of 2022, followed by Chennai and Pune.
In Bengaluru, over $100 million was raised by seven companies each in the second quarter of 2022 – Dailyhunt, Rapido, LeadSquare, county mapCRED, Ather Energy and Observe.AI – primarily in the SaaS, and Logi and autotech space.
Seven companies in NCR – Delhivery, Stashfin, Rario, Gray Orange Robotics, Absolute Foods, Fashinza and physicist – Each raised over $100 million.
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 worth $10 billion) globally has reached 57.