Indian start-ups fund raising has declined by 33 per cent in April-June this year: Tracxn

BL Mumbai Bureau | | Updated on: Jul 07, 2022

A downturn in investors’ confidence is due to market slowdown and volatility based on the current economy and geopolitical situation

The total funding raised by Indian start-ups has declined by 33 per cent from $10.3 billion during the January-March quarter to $6.9 billion in the second quarter, according to a report by Tracxn, a SaaS-based market intelligence platform. It also witnessed a decline in comparison to the same quarter last year (Q2 2021), where the total funds raised were $10.1 billion

It is leading to the major consensus amongst market players of a ‘winter of funding’ or a downturn in investors’ confidence and sentiments towards funding startups. Funding winter is a resultant of the market slowdown and economic volatility based on the current macroeconomic conditions and geopolitical situation that’s intensifying inflation, interest rates, and commodity prices. 

Though investors are a little wary due to the current environment it hasn’t dampened the investment spirit of the community. They have become more decisive about the startups they want to nurture and are focusing extensively from a long-term gain perspective. Our in-depth monitoring of the Indian startup space is compiled into a quarterly report to not only track the progress of VC and PE investments, but to also provide insights on emerging practice areas.”, said Abhishek Goyal, Co-Founder, Tracxn. 

Tracxn Geo Quarterly Report

India Tech Q2 2022. tracks the Indian startup ecosystem by delineating the funding raised by startups, investors’ exits through acquisitions and IPOs, and the wider trends of the fundraising landscape.

According to the report, Indian startups raised $6.9 billion in Q2 2022 (April-June) in 409 funding rounds, the top startups being VerSe ($805M- Series J), Delhivery ($304M- Series J), and udaan ($275M- Series D). They were followed closely 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 overview of the entire Indian startup ecosystem. It taps the journeys of various startups and institutional investors and their growth and successes. Through this report, we aim to give industry stakeholders key insights of the ecosystem that would help in business decision making that is backed by extensive market intelligence and thorough research and data analysis.”        

Some of the key highlights of the report include 121 new startups closed their first funding rounds, 4 startups turned unicorns, 62 startups got acquired, and 5 filed their IPOs. With Leadsquared, Purplle, PhysicsWallah, and Open becoming new unicorns, the total valuation of unicorns escalated to $31.8 B in the past quarter (Q2 2022). G.O.A.T Brand Labs, Fashinza, and Itilite entered the soonicorn club with fundraises of $88M, $135M, and $47.2M respectively. With respect to exits, while eMudhra, Delhivery, Handicrafts village, Eighty Jewellers, and Veranda Learning Solutions filed for IPOs (Initial Public Offering), Blinkit (By Zomato), Whiteteak (By Asian Paints), and MyHQ (By ANAROCK) were the top acquisitions.       

Bangalore, Delhi, and Mumbai are the top cities attracting the maximum investments, as per the report. While IPV and Blume Ventures topped the investment charts in seed-stage startups, Sequoia Capital and Accel ranked highest in the early-stage startups funding standing. Sofina and DST Global are the leading late-stage institutional investors.       

Published on July 07, 2022
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