Bengaluru, NCR and Mumbai accounted for almost 82% of the total number of Indian startups as of December 2022. Image for representation purposes only. | Photo credit: Getty Images/iStockphoto
Indian startup funding fell 33% to $24 billion in 2022 from a year earlier, though it was nearly double the amount recorded in 2019 or 2020, according to a PwC India report on January 11. .
Global investors were still positive about India’s startup ecosystem despite the global slowdown, according to the report titled “Startup Tracker-CY 22”.
“Funding for Indian startups in CY22 was almost $24 billion, down 33% from CY21, but still more than double the funds raised in CY20 and CY19 each,” he said. .
The startups received total funding of $13.2 billion in 2019, $10.9 billion in 2020, and $35.2 billion in 2021.
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Despite the slowdown in funding, Amit Nawka, Partner – Deals & India Startups Leader, PwC India, said, “Some areas like SaaS [Software as a service] and seed funding remained optimistic. With significant dry powder waiting to be invested, it seems likely that the funding scenario will start to normalize after 2-3 quarters.”
Meanwhile, he added, many startups were using the current situation to tighten operating models and optimize the cash trail by deferring expenses and discretionary investments.
The report states that seed deals accounted for 60-62% of total funding in 2021 and 2022 by volume and that the average ticket size per deal was $4 million per deal.
In terms of value, he added, seed deals contributed about 12% of total funding in 2022, up from almost 7% in 2021. Growth and late-stage funding deals accounted for 88% of financing activity in 2022 in terms of value. , representing 38% of the total number of transactions.
According to the report, the average note size in growth-stage deals was $43 million and late-stage deal was $94 million in 2022.
Regarding startup funding by city, according to the report, Bengaluru, NCR and Mumbai accounted for almost 82% of total Indian startups in December 2022. Up to 28% of startups in the top three cities raised more than $20 million.
Bengaluru had the highest number of unicorns, followed by NCR and Mumbai. Similar trends were noted for other companies that raised more than $50 million to $100 million, according to the report.