INDUSTRY

Indian startup funding slips by 33% to $24 bn; investors still bullish on India

Funding for Indian startups dropped by 33 per cent to $24 billion in 2022 as compared to that of the previous year. However, the fund mop-up in 2022 was nearly double the amount recorded in 2019 or 2020, said a PwC India report on Wednesday. Global investors were still positive about the Indian startup ecosystem despite the global slowdown, PwC India said in the report titled, Startup Tracker-CY22. 

“Funding for Indian startups in CY22 was nearly $24 billion, a drop of 33 per cent in comparison to (that of) CY21 but was still more than twice the funds raised in CY20 and CY19 each,” the report said. 

The startups received total funding of $13.2 billion in 2019, $10.9 billion in 2020 and $35.2 billion in 2021. Despite the funding slowdown, PwC India Partner (Deals & India Startups Leader) Amit Nawka said: “Some areas like SaaS (software as a service) and early-stage funding have remained upbeat. With significant dry powder waiting to be invested, it seems likely that the funding scenario will begin to normalise after 2-3 quarters.” Meanwhile, he added, many startups were using the current situation to tighten operating models and optimise cash runway by deferring discretionary spends and investments. 

The report said that early-stage deals accounted for 60 to 62 per cent of the total funding in 2021 and 2022 in volume terms, and average ticket size per deal was $4 million. 

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