Funding in Indian startups shrinks by greater than half • TechCrunch

We’re getting a extra real looking replace on the startup funding panorama in India, and as is true elsewhere, all of the figures are in crimson within the South Asian market.

Indian startups raised $3 billion within the quarter that resulted in September, down 57% from the earlier quarter and 80% year-over-year, market intelligence platform Tracxn stated in a report Tuesday. The figures are outstanding for a lot of causes, the obvious being that startups are discovering it troublesome to boost capital at a time when most high tier funds in India — Sequoia India and Southeast Asia, Lightspeed Venture Partners, Accel, Elevation Capital, Matrix Partners India — have raised document massive funds this yr.

Second, the funding crunch seems to be extra acute in India. Globally, funding was down 53% year-on-year and 33% quarter-on-quarter, in response to information compiled by Crunchbase.

In Q3, the Indian startup ecosystem undertook 334 funding rounds, down from 674 in Q3 2021. The verify sizes are additionally more and more getting smaller for startups throughout all funding phases. Late-stage startups that raised capital secured $42 million in funding on a mean, down over 70% from $142 million throughout the identical interval final yr, Tracxn stated.

Traders globally have become cautious in recent months as market reverses a lot of the good points from the 13-year-long bull cycle. Consequently, startups are more and more discovering it troublesome to boost new rounds of funding at a valuation increased than that of the earlier spherical. Due diligence, which largely went out of style final yr, has made a powerful return as most offers are taking weeks, if not longer, for analysis.

Masayoshi Son, founding father of SoftBank, which deployed over $3 billion in India final yr, warned in August that the funding winter may continue for longer as a result of some unicorn founders are unwilling to just accept decrease valuations.

It doesn’t seem that issues can be bettering anytime quickly. Byju’s, India’s Most worthy startup, has postponed its plans to file to go public this yr. Funds lodge chain Oyo, as soon as valued at $10 billion, is looking to list early subsequent yr, however its largest backer has cut its valuation to $2.7 billion.

“India is at the moment experiencing a funding slowdown which is predicted to proceed for the subsequent 12-18 months and the consequences of the funding slowdown are anticipated to accentuate going ahead,” stated Neha Singh, co-founder of Tracxn, which on a separate be aware has simply filed for an IPO.

Some charts and different fascinating stats from the report: