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BENGALURU: Indian startups are facing a funding winter. Total funding touched a two year low in the September quarter, at $2.7 billion, across 205 deals, says a PwC India study.
The decline was the least in early-stagedeals, which contributed around 21% of the total funding by value in the quarter, compared to approximately 12% in the June quarter.
Amit Nawka, partner, deals and India startups leader in 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. In general, early-stage startups will 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.” Early-stage deals accounted for 70% of total deal volume in Q3 CY22 compared to their 60% share in Q2 CY22. Average ticket size per deal was between $4-$5 million per deal. Growth- and late-stage funding deals accounted for 79% of the funding value in Q3 CY22. These represented 30% of the total deal volume. Average ticket size in growth-stage deals continued to decline and was $32 million during the September quarter.
Only two Indian startups, OneCard and Shiprocket, attained unicorn status in the September quarter, mirroring a global trend in decline in the number of new unicorns this last quarter. Globally, 20 unicorns were added in the September quarter and 45% of them are from the SaaS segment. No new decacorns were added in this quarter.
There were 38 M&A deals in the startups space — 30 domestic, five inbound and three outbound deals. SaaS and edtech witnessed the highest number of M&A transactions.
The decline was the least in early-stagedeals, which contributed around 21% of the total funding by value in the quarter, compared to approximately 12% in the June quarter.
Amit Nawka, partner, deals and India startups leader in 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. In general, early-stage startups will 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.” Early-stage deals accounted for 70% of total deal volume in Q3 CY22 compared to their 60% share in Q2 CY22. Average ticket size per deal was between $4-$5 million per deal. Growth- and late-stage funding deals accounted for 79% of the funding value in Q3 CY22. These represented 30% of the total deal volume. Average ticket size in growth-stage deals continued to decline and was $32 million during the September quarter.
Only two Indian startups, OneCard and Shiprocket, attained unicorn status in the September quarter, mirroring a global trend in decline in the number of new unicorns this last quarter. Globally, 20 unicorns were added in the September quarter and 45% of them are from the SaaS segment. No new decacorns were added in this quarter.
There were 38 M&A deals in the startups space — 30 domestic, five inbound and three outbound deals. SaaS and edtech witnessed the highest number of M&A transactions.
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