Indian startups raised $3 billion in Q3 2022 (July-Sept), which was 57 per cent lower than the previous quarter and 80 per cent lower than Q3 2021 ($14.9 billion), according to Tracxn Geo Quarterly Report: India Tech Q3 2022.
The average ticket size also witnessed a drop across all funding stages, with the late stage seeing the biggest fall of over 70 per cent, from $142 million in Q3 of 2021 to $42 million in Q3 of 2022, indicating that investors are not willing to make large investments until economic conditions stabilise.
The top three sectors that received the maximum funding this quarter were Alternative Lending, Genomics and Payments. Genomics is an upcoming sector with great potential but has remained untapped by investors. It saw top investor interest in Q3 2022, receiving over $231 million in funding, which is higher than the total funding received in 2021.
The five companies that raised funding rounds of $100M+ this quarter were EarlySalary, 5ire, InsuranceDekho, OneCard, and BookMyShow,with the most active investors being Better Capital, Venture Catalysts and Surge. Out of the 334 funding rounds closed in Q3, the top 3 funding rounds were completed by EarlySalary ($110 million- Series D), CleverTap ($105 million- Series D), and OneCard ($102 million - Series D).
Further, the report noted that 109 startups closed their first funding round, three startups turned unicorns, 39 startups got acquired, and two filed for their IPOs. Molbio Diagnostics, 5ire and OneCard turned unicorns ($1 billion valuation) and Zopper, LifeCell, Jar, DotPe, Vegrow, Bigspoon, InsuranceDekho, CUSMAT, Airtribe and Serentica Global joined the Soonicorn (soon to be unicorns) club.
Bengaluru, Mumbai and Delhi-NCR were the top cities attracting maximum investments, as per the report, with Blume Ventures topping the investment charts in seed-stage startups, Sequoia Capital ranked highest in the early-stage startup funding and GIC leading the late-stage funding.
Commenting on the report findings, Neha Singh, Co-Founder, Tracxn said, “Our quarterly startup report confirms that India is currently experiencing a funding slowdown which is expected to continue for the next 12-18 months and the effects of the funding slowdown are expected to intensify going forward. Executives across the world anticipate a recession in the near future and are making preparations to cut costs. To add to their woes, the recent energy crisis in the UK and Europe and also the sliding GBP and EUR have increased the likelihood of a global recession.”