Startup funding: These cities attract most amount of money | Mint
Active Stocks
Mon Feb 26 2024 15:59:59
  1. Tata Steel share price
  2. 142.60 -1.99%
  1. Power Grid Corporation Of India share price
  2. 287.75 1.97%
  1. HDFC Bank share price
  2. 1,422.25 0.10%
  1. ITC share price
  2. 409.20 -0.58%
  1. State Bank Of India share price
  2. 759.00 -0.05%
Business News/ News / India/  Startup funding: These cities attract most amount of money
BackBack

Startup funding: These cities attract most amount of money

These cities/regions collectively accounted for around 95% of all fundraising activity in April–June 2022.

Software as a service (SaaS) and fintech startups received more than $3.1 billion in funding during the second quarter of CY 2022. Photo: iStockphotoPremium
Software as a service (SaaS) and fintech startups received more than $3.1 billion in funding during the second quarter of CY 2022. Photo: iStockphoto

Geopolitical unrest looks to be having an impact on Indian startups as total funding fell by 40% to $6.8 billion in the April-June period. According to a 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 $5 million.

The National Capital Region (NCR), Mumbai, and Bengaluru, which collectively accounted for around 95% of all fundraising activity in the April–June 2022 quarter, are India's three most important startup cities, followed by Chennai and Pune.

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 companies 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 startups each raised more than $100 million in Mumbai. UpGrad, Zepto, CoinDCX, and Turtlemint are a few of these.

According to the research, software as a service (SaaS) and fintech startups received more than $3.1 billion in funding during the second quarter of calendar year (CY) 2022. It went on to say that early-stage deals, with an average ticket size of $5 million, accounted for more than 60% of the entire volume of deals.

In the second quarter of calendar year 2022, only four firms in India achieved unicorn status, echoing a global trend that saw a decrease in the number of new unicorns this past 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 companies will join the 57 decacorns (startups valued at $10 billion) that already exist in the world during the April–June 2022 quarter.

"After three consecutive quarters of raising more than $10 billion, the total funding in the Indian startup ecosystem fell by 40 per cent during Q2 CY22 to reach $6.8 billion.

"The decline can be attributed to a global slowdown, decrease in tech stock valuations, inflation and geopolitical instability," it added.

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 $800 million and could remain stable or even grow in the next few quarters, it added.

"We expect the overall funding landscape to take 12–18 months to stabilise, during which it would be beneficial for startups to increase their 'funding runway'. No matter which stage a startup is in, they would do well to keep a close tab on core business and ensure unit economics is strictly as per plan," said Amit Nawka, Partner - Deals and India Startups Leader, PwC India.

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.

(With PTI inputs)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 10 Jul 2022, 02:35 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App