Indian startups

Key Highlights:

  • Based on a strong 2021, Indian startups have continued in somewhat of a strong run into 2022. 
  • As per a report, startups raised $14.3 Bn in funding in the first four months of 2022. 
  • This year, Games24x7 became a unicorn after a funding round led by Malabar India Fund raised $75 million at a $2.5 billion valuation. 

Based on a strong 2021, Indian startups have continued in somewhat of a strong run into 2022. A few hiccups aside, the Indian startup ecosystem came out stronger than ever before.

As per a report, startups raised $14.3 Bn in funding in the first four months of 2022. Compared with last year, when Indian startups raised $7.33 Bn, this represents almost a 2X increase. The sharp increase has been led by a slew of funding announcements that have taken place this year so far.

Compared to the same period last year, the deal count grew almost 1.8X to 658 in the first four months of 2022. The deal count stood at 378 during the same period last year. Even though the overall numbers grew, the breakdown of the data revealed a trend of a slowdown within the ecosystem.

Despite raising a record $4.6 Bn in January 2022, the number has steadily decreased since then. Following the $3.4 Bn raised in March, the total amount raised in February 2022 fell to $3.8 Bn. As of April this year, the funding numbers continue to show a downward trend, settling at $2.6 billion.

Over the years, the deal count has been erratic as well. In February 2022, the deal count dropped sharply from 196 in January this year to 164. As in March, the deal count dropped to 146, recovering slightly to 152 at the end of April. Despite a higher number of deals in April, the funding amount dropped considerably from March 2022.

A startling development took place in April of 2022, as no unicorn was minted. However, 13 startups have already joined the coveted club in this year’s first three months. This year, Games24x7 became a unicorn after a funding round led by Malabar India Fund raised $75 million at a $2.5 billion valuation. It was the 99th unicorn to come out of India, while the ecosystem is yet to see its 100th unicorn.

The startup ecosystem is witnessing a downturn, after the funding boom. Startups already plagued by a drying fund situation have been made even worse with reckless spending and layoffs. Investors have also been spooked by this year’s market volatility, and many startups have shelved their plans for public offerings.

We need to wait and see how the ecosystem will emerge from this crisis, even though these are challenging times. During these difficult times, everybody is watching the ecosystem, waiting to see how it responds.

 

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