According to a PwC research, startup funding fell 40% between April and June

According to a PwC India analysis, geopolitical unrest appears to be having an impact on Indian startups as total funding fell by 40% to USD 6.8 billion in the April-June period.

According to the PwC India study titled "Startup Deals Tracker - Q2 CY22," early-stage deals made up more than 60% of the total with an average ticket amount of USD 5 million.

"After three quarters in a row in which more than USD 10 billion was raised, the total funding in the Indian startup ecosystem decreased by 40% in Q2 CY22 to USD 6.8 billion. A worldwide recession, a reduction in the value of tech stocks, inflation, and geopolitical unrest may all be blamed for the decline, it continued. The research stated that the second quarter of Calendar Year (CY) 2022 saw more than USD 3.1 billion invested in software as a service (SaaS) and fintech enterprises.

Additionally, it stated that deals in the early stages made up more than 60% of all deal volumes, with an average ticket size of USD $5 million. Given that entrepreneurial activity continues to flourish with increased digitisation and the amount of venture capital funds waiting to be deployed in the Indian market, funding in early-stage deals during Q2 CY22 continued to be stable at around USD 800 million and could remain stable or even grow in the next few quarters, it added.

"It would be advantageous for startups to extend their "funding runway" during this time because we anticipate it to take the financial environment as a whole 1218 months to stabilise. Any startup, regardless of its stage, would do well to keep a tight eye on its core business and make sure that unit economics closely follow the plan "said Amit Nawka, partner at PwC India and leader of India startups.

According to him, valuations are most likely to continue to be under pressure at all fundraising phases as a result of the notable funding slowdown in late-stage or Initial Public Offering (IPO) businesses. The National Capital Region (NCR), Bengaluru, and Mumbai, which collectively accounted for around 95% of all investment activity in the April–June 2022 quarter, were the next two startup cities in India, according to the research.

Seven startups in Bengaluru each raised more than $100 million in the second quarter of 2022: Dailyhunt, Rapido, Leadsquared, Lenskart, CRED, Ather Energy, and Observe.ai. These companies primarily operate in the SaaS, logi, and autotech sectors. Seven businesses in the NCR raised more than $100 million each, including Delhivery, Stashfin, Rario, Grey Orange Robotics, Absolute Foods, Fashinza, and PhysicsWallah. According to the article, four companies each raised more than USD 100 million in Mumbai. UpGrad, Zepto, CoinDCX, and Turtlemint are a few of these.

In the second quarter of calendar year 2022, just four firms in India achieved unicorn status, matching a global trend of a fall in the number of new unicorns this previous quarter. Globally, there are now more than 1,200 unicorns, with the SaaS industry seeing the most operational unicorns in Q2 of FY22, followed by the finance industry. Four new businesses entered the decacorn category (startups valued at $10 billion) in the April–June 2022 quarter, bringing the total number of decacorns to 57 globally.