IANS | 10 Jul, 2023
The Indian startup ecosystem reported the lowest six-month funding in
the last four years, in the first half of this year at $3.8 billion
across 298 deals -- a decline of nearly 36 per cent as compared to the
second half of 2022 ($5.9 billion), a report showed on Sunday.
Fintech,
Software-as-a-Service (SaaS) and direct-2-consumer (D2C) continued to
be the most funded sectors, according to the PwC India report.
Growth
and late-stage funding deals accounted for 84 per cent of the funding
activity in the January-June period. These represented 43 per cent of
the total count of deals in this period.
The average ticket size in growth-stage deals was $19 million and late-stage deals was $52 million, said the report.
“There
is a slowdown in startup funding despite significant untapped capital
reserves held by venture capitalists (VCs). Active VC firms in India
have secured new funds in the past year and we can expect the pace of
investments to pick up in the next few months,” said Amit Nawka,
Partner, Deals & India Startups Leader, PwC India.
In the
interim, there has been an increase in the due diligence being carried
out by investors before making investments, both in terms of detailing
as well as coverage, he added.
Early-stage deals accounted for 57
per cent of the total funding in H1 CY23 (in volume terms). In value
terms, early-stage deals contributed to approximately 16 per cent of the
total funding but was at its lowest as compared to the previous two
years.
Bengaluru, Delhi-NCR, and Mumbai continue to be the
key start-up cities, representing around 83 per cent of the total
startup funding activity.
