Funding For Indian Startups In CY22 Nearly $24 billion: PwC India Report According to the report, the overall Indian startup ecosystem continued to grow with continuing investments at early stages
By Teena Jose
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Funding for Indian startups in CY22 was nearly $24 billion, a drop of 33% in comparison to CY21 but was still more than twice the funds raised in CY20 and CY19 each. As per the PwC India report titled, Startup Deals Tracker - CY22, early stage funding grew by 12% as compared to CY21, showing that despite the global slowdown, investors are still positive about the Indian start-up ecosystem. Additionally, the SaaS segment witnessed an increase of 20% in funding values during CY22 compared to CY21 and accounted for nearly 25% of all funding activity in CY22.
"Despite the funding slowdown, some areas like SaaS 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. Until then however, many start-ups are using this time to tighten operating models and optimise their cash runway by deferring discretionary spends and investments," said Amit Nawka, partner - deals and India startups leader, PwC India.
According to the report, the overall Indian startup ecosystem continued to grow with continuing investments at early stages. This segment saw funding growth of nearly 12% in CY22 as compared to CY21. As of December 2022, there were more than 1,800 funded startups in India – a base that has consistently grown during CY22. With continuing tech-led innovations, supported by the improving technological infrastructure in India, rising incomes and aspirations of Indian people, and significant venture capital dry powder waiting to be invested, CY23 has started off with renewed optimism for start-ups and investors.
There was a decline in the total funds raised in CY22 ($24 billion) of ~33% as compared to CY21 ($35 billion). The top five sectors that attracted funding were software as a service (SaaS), fintech, logi and autotech, edtech and direct to consumer (D2C), contributing approximately 71% of the total funding in CY22 in value terms. Funding in SaaS startups grew by 20% in CY22 versus CY21, making it the most-funded sector of CY22, as per the report.
Apart from SaaS, the media and entertainment sector also showed growth in funding activity during CY22. The steepest decline in funding during CY22 was witnessed in e- commerce business to consumer (B2C) at 71% and edtech at 54%
Furthermore, the report revealed that 21 startups attained unicorn status in CY22. As of 31 December 2022, SaaS continues to lead with the most number of unicorns at 20, followed by fintech at 16. Precisely, SaaS and fintech are top two sectors representing nearly 33% and 17% of all funded startups in India.
PwC is a network of firms in 152 countries with over 328,000 people who are committed to delivering quality in assurance, advisory and tax services established with a purpose is to build trust in society and solve important problems, according to a statement.
