Startups Funding: Indian startups have raised $10 billion from investors in the first quarter of the year 2022. This indicates the continuation of funding deals in the country amid global concerns.
According to data from Venture Intelligence, startups raised around $10.5 billion through 329 deals in the first three months of 2022, roughly equal to the $10.4 billion raised from 315 deals in the previous quarter. However, this figure is double compared to the same period a year ago, when startups raised $5.7 billion through 225 deals.
Estimated impact on fund raising going forward
While the size of the deals continues to grow, most of these deals are expected to have happened at the end of last year and were announced in the first quarter of 2022. The sharp fall in domestic and international equity markets in the wake of global concerns in early 2022 is expected to impact fund raising in the days to come.
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Now investors are more cautious
Arun Natarajan, Founder, Venture Intelligence, said that even though quarterly startup funding has been stable, there are signs of a lot of turmoil since mid-February.
Natarajan said, “With technology stocks in the US as well as unicorn stocks falling after the IPO, further aggressive funding of tech startups is expected to be curtailed. Now investors are becoming more cautious.”
On March 31, Bain & Company partner Arpan Seth said that investors can increase investment in quality assets and focus on fair valuations with slow deal process.
In a recent episode of Moneycontrol Masterclass, Madhukar Sinha, General Partner, India Quotient, said that investors are now paying more attention to the actual position of the company and are asking more questions on the numbers behind the growth.
big financing round
The data shows that the financing rounds have become much larger, especially in the stage rounds.
Average deal sizes in the Series A round more than doubled to $203 million in the first quarter of 2022, from $1.07.5 million in the fourth quarter of 2022 and $648 million in the first quarter of 2021. The average deal size in the first quarter of 2022 stood at $21.5 million, compared to $17.6 million in the fourth quarter of 2021 and $14.9 million in the first quarter of 2021.
Bengaluru at the forefront of funding
Bengaluru has been at the forefront of funding deals. Startups in the city raised $4.6 billion in 121 deals in the first quarter of 2022. Mumbai-based startups came second with $1.46 billion in 47 deals. Delhi and Gurugram together raised $1.03 billion through 69 deals.
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