Although the broader start-ups ecosystem is beginning to express concerns about a slowdown in dealmaking because of macroeconomic headwinds, Indian start-ups raised more than $10 billion in funding during the first quarter of 2022.
An increase from $5.7 billion during the same period in 2021, according to data sourced from Venture Intelligence.Advertisement
Since formal deal announcements are often made a few months after a transaction has closed, the record-breaking first quarter financing data does not reflect the present downturn.
What is the root cause of the sluggishness? A spike in interest rates in the United States, rising geopolitical tensions because of Russia’s invasion of Ukraine, record-high fuel prices, and the collapse of technology stocks in the United States have all contributed to late-stage and private equity funds becoming more cautious around the world.
According to a story in the Financial Times, Masayoshi Son, the founder of SoftBank, recently advised the company’s senior executives to take it easy on technological investments owing to the recent decline in the value of its assets (FT).
The true impact of the macroeconomic events and geopolitical concerns, according to investors and founders, may become more apparent in the next quarters. Indian startups are currently maintaining their momentum from the previous year. However, in India, late-stage transactions made approximately 45 per cent ($5.8 billion) of the overall funding for the startup ecosystem this quarter.
Published by: Aditya Andharia
Edited By : Kritika Kashyap