Startup funding within the Indian ecosystem continued to say no within the second quarter of CY2022 attributable to a serious ‘funding winter’ amid a decline in investor confidence.
Indian startups raised $6.9 billion in Q2 2022 (April-June) throughout 409 funding rounds, a decline of 33%, in contrast with $10.3 billion in Q1 2022 (January-March). In the identical quarter final 12 months (Q2 2021), Indian startups raised round $10.1 billion, based on Tracxn’s ‘Geo Quarterly Report: India Tech Q2 2022’.
The third quarter of 2021 topped the charts by way of funding exercise with $15 billion in fundraising quantity, which hasn’t been surpassed in latest instances. The ongoing funding winter is a results of the market slowdown and financial volatility based mostly on the present macroeconomic circumstances and geopolitical scenario that’s intensifying inflation, rates of interest and commodity costs.
“Though investors are a little wary due to the current environment it hasn’t dampened the investment spirit of the community. They have become more decisive about the startups they want to nurture and are focusing extensively from a long-term gain perspective,” mentioned Abhishek Goyal, co-founder of Tracxn.
The funding winter was felt throughout all phases of investments together with seed, early and late-stage rounds. Late-stage deal quantity stood at $4.6 billion in Q2 2021 — a 41% decline in contrast with the earlier quarter. Early-stage deal quantity declined by 9.5% quarter-on-quarter (q-o-q), whereas early-stage offers have been additionally down by 16% q-o-q, based on Tracxn.
The variety of startups funded in Q2 2022 additionally declined sharply by 29% q-o-q with solely 404 companies elevating institutional funding. In the earlier quarter, round 574 startups obtained funding from enterprise capitals (VCs) and personal equities (PEs). The early-stage deal depend additionally fell 19% q-o-q, whereas the expansion stage deal depend was down by 25% q-o-q in Q2 2022. The variety of seed-stage rounds declined essentially the most compared to early and late-stage rounds. There have been solely 231 early-stage offers reported in Q2 2022, which is a 34% q-o-q drop, making it the steepest decline compared to the final 5 quarters, based on Tracxn’s information.
However, among the prime startups funded in Q2 2022 embrace Dailyhunt’s $805 million Series J spherical, Delhivery’s $304 million Series J spherical, and Udaan’s $275 million Series D spherical. They have been adopted carefully by ShareChat ($255M- Series G) and upGrad ($225M- Series F). Social Platforms, web first media, funds, B2B e-commerce and e-commerce enablers are the highest sectors receiving essentially the most funding from traders between April and June 2022.
Around 121 new startups closed their first funding rounds in Q2 2022, together with 4 startups turning unicorns. However, round 62 startups obtained acquired, and 5 filed their preliminary public choices (IPO) in the identical quarter. With Leadsquared, Purplle, PhysicsWallah and Open changing into new unicorns, the full valuation of unicorns escalated to $31.8 billion previously quarter (Q2 2022). G.O.A.T Brand Labs, Fashinza, and Itilite entered the soonicorn membership with fundraises of $88 million, $135 million and $47.2 million respectively.
With respect to exits, whereas eMudhra, Delhivery, Handicrafts village, Eighty Jewellers and Veranda Learning Solutions filed for IPOs, Blinkit (by Zomato), Whiteteak (by Asian Paints) and MyHQ (by ANAROCK) have been the highest acquisitions.
Bengaluru, Delhi, and Mumbai are the highest cities attracting the utmost investments, as per the report. While IPV and Blume Ventures topped the funding charts in seed-stage startups, Sequoia Capital and Accel ranked highest within the early-stage startups funding standing. Sofina and DST Global are the main late-stage institutional traders.
Source: www.financialexpress.com”