Startup funding in India would fall 33% to USD 24 billion by 2022, according to a new report.

According to a PwC India research released on Wednesday, funding for Indian startups fell by 33% to USD 24 billion in 2022, despite being nearly double the amount recorded in 2019 or 2020.

Despite the global downturn, global investors remained optimistic about the Indian startup ecosystem, according to the 'Startup Tracker-CY 22' study.

"Funding for Indian startups in CY22 was approximately USD 24 billion, a 33% decrease from CY21 but still more than twice the capital raised in CY20 and CY19 combined," it stated.

Startups received a total of USD 13.2 billion in funding in 2019, USD 10.9 billion in 2020, and USD 35.2 billion in 2021.

Despite the decrease in investment, Amit Nawka, Partner - Deals & India Startups Leader at PwC India, stated, "Some sectors, such as SaaS (Software as a service) and early-stage funding, have remained optimistic. With enormous dry powder waiting to be invested, the funding scenario appears likely to normalise after 2-3 quarters." Meanwhile, many companies, he continued, were taking advantage of the current scenario to tighten operational models and maximise cash runway by postponing discretionary buys and investments.

According to the research, early-stage deals accounted for 60-62 percent of total fundraising in volume terms in 2021 and 2022, with an average ticket size of USD 4 million per deal.

Early-stage acquisitions provided around 12% of overall capital in 2022, compared to nearly 7% in 2021, according to the report. Growth and late-stage capital deals accounted for 88% of funding activity in 2022 in terms of value, accounting for 38% of overall deal count.

According to the survey, the average ticket size in growth-stage acquisitions was USD 43 million in 2022, and late-stage deals were USD 94 million.

According to the research, Bengaluru, New Delhi, and Mumbai accounted for almost 82 percent of total Indian startups as of December 2022. As much as 28% of startups in the top three cities have funded more than USD 20 million.

Bengaluru had the most unicorns, followed by the NCR and Mumbai. According to the survey, similar trends have been observed for other companies that have raised funding above USD 50-100 million.