Startup funding fell by 40% in April-June: PwC report

Geopolitical instability seems to be affecting Indian startups with total funding down 40% to $6.8 billion in the April-June quarter, PwC India said in a report. According to a PwC India report titled “Startup Deal Tracking – Q2 CY22”, early stage deals accounted for over 60% of the total with an average ticket size of US$5 million.

“After three consecutive quarters of raising over $10 billion, total funding in Ecosystem of Indian startups fell 40% in the second quarter of calendar year 22 to reach $6.8 billion.

“The decline may be due to a global slowdown in growth, declining technology stock prices, inflation and geopolitical instability,” the company added.

Software as a Service (SaaS) and fintech companies the report states that the second quarter of calendar year (CG) 2022 had the highest proportion of funding, at more than $3.1 billion.

It goes on to say that early-stage deals account for over 60 percent of total deals with an average ticket size of $5 million.

Funding for early-stage deals in Q2 2022 remained stable at around $800 million and could remain stable or even rise over the next few quarters as entrepreneurial activity continues to flourish with increased digitalization as well as the number of venture funds. is awaiting deployment in the Indian market, he added.

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“We expect the overall funding landscape to stabilize within 12-18 months, during which time it would be beneficial for startups to increase their funding runway. core business and ensure that the division’s economy is strictly on track,” said Amit Navka, Transaction Partner and Head of Startup India, PwC India.

He added that valuations are likely to remain under pressure across all stages of funding, primarily due to a significant slowdown in late-stage funding or initial public offerings (IPOs).

The report also states that Bangalore, the National Capital Region (NCR) and Mumbai continue to be the key start-up cities in India, accounting for about 95% of total funding in the April-June 2022 quarter, followed by Chennai and Pune.

In Bangalore, in the second quarter of 2022, seven companies – Dailyhunt, Rapido, Leadsquared, Lenskart, CRED, Ather Energy and Observe.ai – raised more than $100 million each, mainly through SaaS, logi and autotech.

At NCR, seven companies—Delhivery, Stashfin, Rario, Gray Orange Robotics, Absolute Foods, Fashinza, and PhysicsWallah—have each raised over $100 million.

The report states that in Mumbai, four companies have raised more than US$100 million each. These include upGrad, Zepto, CoinDCX, and Turtlemint.

Only four startups in India achieved unicorn status in the second quarter of calendar year 2022, reflecting a global trend of fewer new unicorns in the latest quarter. Globally, the total number of unicorns has surpassed 1,200, with the highest number of unicorns in the second quarter of 2022 operating in the SaaS sector, followed by fintech.

The number of decacorns ($10 billion startups) worldwide has reached 57, with four new entrants in April-June 2022. PTI NKD CS HVA

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