Indian startup funding hits two-year low in July-September period: PwC India report

Startup funding in India in July to September period of the calendar year 2022 hit a two-year low at $2.7 billion across 205 deals. As per a PwC India report, early-state deals were better placed amid an overall decline in funding across all stages of investment.

Early-stage deals contributed around 21 percent of the total funding by value in Q3 CY22 compared to approximately 12 percent in the previous three months, showing that venture capital (VC) firms continue to back the Indian startup ecosystem.

Amit Nawka, Partner - Deals & India Startups Leader, PwC India, said, “It is tough to predict how long the slowdown in funding will last, but clearly, both founders and investors are being more selective and cautious in deal-making."

Nawka said in general, early-stage startups would be able to raise capital more easily as they are typically more insulated than late-stage deals from fluctuations in the public markets. However, investors have already raised a lot of capital which needs to be deployed, and this will ultimately find its way to the Indian startup ecosystem.”

Startup perspectives for the quarter

Stages of funding: Growth and late-stage funding deals accounted for 79 percent of the funding activity in Q3 CY22 (value terms). These represented 30 percent of the total deal activity (count terms). Average ticket size in growth-stage deals continued to decline and was $32 million during Q3 CY22. Early-stage deals accounted for 70 percent of total funding in Q3 CY22 compared to their 60 percent share in Q2 CY22 (in volume terms). The average ticket size per deal ranged from $4-5 million per deal. In value terms, early-stage deals contributed around 21 percent of the total funding in Q3 CY22 compared to around 12 percent in Q2 CY22.

Also Read: Good Health Company to use $10 million from funds raised on expansion

Mergers and acquisitions (M&A): Thirty-eight M&A deals involving startups were executed in Q3 CY22 — 30 domestic, five inbound and three outbound deals. SaaS and EdTech witnessed the highest number of M&A transactions during Q3 CY22 — nine in SaaS and seven in EdTech. Edtech company upGrad has been the top acquirer this quarter with four acquisitions — Wolves India, Harappa Education, Exampur and Centum Learning.

Global and Indian unicorns: Only two startups in India attained unicorn status in Q2 CY22, mirroring a global trend in decline in the number of new unicorns this last quarter. Globally, Q3 CY22 produced 20 unicorns and 45 percent of them are from the SaaS segment. No new decacorns were added in this quarter.

Also Read: Artha Select Fund to invest Rs 450 crore in 12-14 startups at Series B and C stage

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Indian startup funding hits two-year low in July-September period: PwC India report

While a decline in funding is noted across all stages of investment, the decline has been the least in early-stage deals which contributed around 21 percent of the total funding by value in Q3 CY22.

By Pihu Yadav Oct 13, 2022 4:24:37 PM IST (Published)

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Indian startup funding hits two-year low in July-September period: PwC India report

While a decline in funding is noted across all stages of investment, the decline has been the least in early-stage deals which contributed around 21 percent of the total funding by value in Q3 CY22.

By Pihu Yadav Oct 13, 2022 4:24:37 PM IST (Published)

Tags

BJP is planning to ban RSS, says Shiv Sena (UBT) chief Uddhav Thackeray

Punjab Lok Sabha elections: Complete list of Congress candidates

Punjab Lok Sabha elections: Check full list of AAP candidates and constituencies

PM Modi, Rahul Gandhi election rallies in Delhi today: Here are the routes to avoid

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