Total funding raised by Indian start-ups fell by 33%, from $10.3 billion in the January-March quarter to $6.9 billion in the second quarter, according to a report by Tracxn, a platform market intelligence based on SaaS. It also saw a decline from the same quarter last year (Q2 2021), where total funds raised were $10.1 billion.
It leads to the major consensus among market players of a “fundraising winter” or a decline in investor confidence and sentiment toward startup funding. The funding winter is the result of market downturn and economic volatility based on the current macroeconomic conditions and geopolitical situation which intensifies inflation, interest rates and commodity prices.
“Although investors are a bit wary due to the current environment, it hasn’t dampened the community’s investment spirit. They have become more decisive about which startups they want to grow and are largely focused on long-term gain. Our in-depth monitoring of the Indian startup space is compiled into a quarterly report not only to track the progress of venture capital and private equity investments, but also to provide insights into emerging practice areas,” Abhishek said. Goyal, co-founder of Tracxn.
Tracxn Geo Quarterly Report
India Tech Q2 2022. tracks the Indian startup ecosystem by delineating funding raised by startups, investor exits through acquisitions and IPOs, and broader trends in the fundraising landscape .
According to the report, Indian startups raised $6.9 billion in the second quarter of 2022 (April-June) in 409 funding rounds, with the top startups being Verse ($805M – Series J), Delhivery ($304M – Series J) and udaan ($275M – Series D). They were closely followed by ShareChat ($255M – Series G) and upGrad ($225M – Series F). Social platforms, internet-first media, payments, B2B e-commerce and e-commerce enablers are the top sectors receiving the most funding from investors between April and June 2022.
Neha Singh, co-founder, Tracxn said, “The Tracxn report is a quarterly snapshot of the entire Indian startup ecosystem. It taps into the journeys of various startups and institutional investors, as well as their growth and success. Through this report, we aim to empower industry stakeholders with key ecosystem insights that would aid in business decision-making, backed by in-depth market knowledge and in-depth data research and analysis.
Highlights of the report include 121 new startups that closed their first round of funding, 4 startups that became unicorns, 62 startups were acquired, and 5 filed for IPO. With Leadsquared, Purplle, PhysicsWallah and Open becoming new unicorns, the total unicorn valuation soared to $31.8 billion in the last quarter (Q2 2022). GOAT Brand Labs, Fashinza and Itilite entered the soonicorn club with fundraising of $88 million, $135 million and $47.2 million respectively. Regarding releases, while eMudhra, Delhivery, Handicrafts village, Eighty Jewelers and Veranda Learning Solutions have filed for IPO (Initial Public Offering), Blinkit (By Zomato), Whiteteak (By Asian Paints) and MyHQ (By ANAROCK) were the main acquisitions.
Bangalore, Delhi and Mumbai are the main cities attracting the maximum investment, according to the report. While IPV and Blume Ventures topped the seed stage startup investment rankings, Sequoia Capital and Accel topped the seed stage startup funding rankings. Sofina and DST Global are the main late-stage institutional investors.
July 07, 2022