Startup Financing Fell 40% Between April And June: Says PwC Report

The survey discovered that during the second quarter of the calendar year 2022, the financing amount was approximately USD 3.1 billion, invested in fintech and software as a service (SaaS) Companies.

Highlights –

Early-stage transactions took up more than 60% of the total volume, with an average ticket value of USD 5 million, according to a PwC India report.
Four companies in Mumbai raised more than $100 million in total. These are Turtlemint, upGrad, Zepto, and CoinDCX, respectively.
The number of decacorns increased by four during the April to June 2022 quarter.

According to a PwC India analysis, geopolitical uncertainty seems to be endangering Indian businesses, as overall financing fell by 40% to USD6.8 billion in the April–June period.

According to PwC India research titled “incipiency Agreements Tracker- Q2 CY22,” early-stage deals made up more than 60% of the whole volume with an average ticket value of USD 5 million.

The overall funding in the Indian incipiency ecosystem decreased by 40% during Q2 CY22 to reach USD6.8 billion after three consecutive diggings of generating more than USD 10 billion.

A worldwide slowdown, a reduction in the value of tech stocks, affectation, and geopolitical unrest were listed as causes of the dip, it was stated.

According to the research, Software as a Service (SaaS) and fintech firms received the highest percentage of funding in the second quarter of Calendar Year 2022, amounting to more than USD3.1 billion.

In addition, it claimed that early-stage agreements accounted for more than 60% of the total number of deals and had an average ticket value of USD 5 million.

Investing in early-stage deals

The funding for early-stage deals during Q2 CY22 remained stable at about USD 800 million and could remain stable or even grow in the upcoming many years, it was added, given that entrepreneurship continues to flourish as a result of increased digitization and the amount of venture capital funds that are still available to be stationed in the Indian market.

“It would be beneficial for startups to extend their “backing runway” during the 12- to the 18 months, it will take for the overall backing geography to settle.

No matter what stage an initiative is in, they would be wise to maintain a tight eye on their core business and make sure that unit economics is stringent and follows the plan “Amit Nawka, Partner- Deals and India Startups Leader, PwC India, stated.

The National Capital Region (NCR), Mumbai, and Bengaluru, which together accounted for almost 95% of all supporting efforts in the April–June 2022 quarter, were the next two major incipiency metropolises in India, according to the research. Chennai and Pune were listed as the other two.

In Bengaluru, seven businesses—Daily hunt, Rapido, lead squared, Lens kart, CRED, Ather Energy, and Observe. ai—each received more than USD 100 million in the second quarter of 2022. These businesses mostly operate in the SaaS, logi, and AutoTech sectors.

Seven businesses in the NCR raised more than $100 million each: Delhivery, Stashfin, Rario, Grey Orange Robotics, Absolute Foods, Fashinza, and PhysicsWallah.

According to the study, four firms in Mumbai raised a combined total of more than USD 100 million. These consist of Turtlemint, upGrad, Zepto, and CoinDCX.

Four businesses in Mumbai scheduled in 2022

In India, just four firms achieved unicorn status in the second quarter of the scheduled year 2022, following a worldwide trend of a fall in the number of new unicorns this third quarter.

According to an encyclopedia, there are already over 200 unicorns, with the majority of them operating in the SaaS industry, followed by fintech, in Q2 of FY22.

Four new startups entered the market during the quarter of April to June 2022, bringing the total number of decacorns (startups valued at USD 10 billion) to 57. NKD CS HVA PTI.