The country's start-up ecosystem is going through a tough phase as funding winter enveloped the companies. It was particularly dismal for Bengaluru, the city that always attracted the most start-up funding.

Of the total funding that Indian start-ups received in the September quarter of 2022, only 27 per cent, or roughly $841 million, went to those in Bengaluru. In Q3 CY21, Bengaluru start-ups bagged 59 per cent of the total funding, at around $8.7 billion. This is according to Tracxn's quarterly report on the start-up ecosystem.

The value per deal has also come down drastically in the September 2022 quarter to $10.25 million. Three quarters ago, it was $41.45 million. This is according to the start-up deals tracker put out by PricewaterhouseCoopers (PwC).

In Q3 CY22, Bengaluru only bagged funding of $841 million. This is $2,502 million less than what they bagged in Q2 CY22. The number of deals has also come down from 113 in Q2 to 82 in the September quarter. The biggest deal that India's tech capital saw at that time was an $83 million fund-raise by Yulu Bikes, according to Tracxn data. While the city saw 48 seed funding deals, there were 19 series A and 17 series B funding deals. However, there were no Series F, Series G or Series H funding deals in the city in the last quarter.

Others in the game

While Bengaluru's share of funding has been reducing since Q1 2022, Pune's share has been increasing. For instance, in the last quarter, start-ups in Pune bagged 11 per cent of the total funding amount, around $319 million, Tracxn data says. In the last quarter, the value per deal in Pune was $33.1 million, thrice that of Bengaluru. Mumbai, on the other hand, has 17 per cent of the total funding, with the value per deal at $15.98 million.

Amit Nawka, Partner, Deals and Startups, PwC India said, “The last two quarters saw low funding across the country. Also, only a very few late stage funding has happened. The share of funds will be skewed towards regions where companies that raised more than $1 million this quarter. However, if the number of deals has also come down, it’s a cause of worry for Bengaluru.”

He also added that it could be a chance occurrence.