Indian startups raised $6.9bn in the June quarter, down 33% sequentially

Indian startups raised $6.9 billion in Q2 CY22 (April-June) across 409 funding rounds. This quarter’s total funding declined by 33 per cent from $10.3 billion raised in Q1 CY22 (Jan-Mar), according to Tracxn Geo Quarterly Report: India Tech Q2 2022.

Startup fundraising also declined on a year-on-year (YoY) basis from $10.1 billion.

With fundraising in the slow lane, the Tracxn report said this has led to a consensus amongst market players of a ‘winter of funding’ or a downturn in investors’ confidence and sentiments towards funding startups. Funding winter is a result of the market slowdown and economic volatility based on the current macroeconomic conditions and geopolitical situation intensifying inflation, interest rates, and commodity prices.

“Though investors are a little wary due to the current environment it hasn’t dampened the investment spirit of the community. They have become more decisive about the startups they want to nurture and are focusing extensively from a long-term gain perspective. Our in-depth monitoring of the Indian startup space is compiled into a quarterly report to not only track the progress of VC and PE investments, but to also provide insights on emerging practice areas,” said Abhishek Goyal, Co-Founder, Tracxn.

The top startups in terms of fundraising this quarter include VerSe ($805M- Series J), Delhivery ($304M- Series J), and udaan ($275M- Series D). They were followed closely by ShareChat ($255M- Series G) and upGrad ($225M- Series F).

Social Platforms, internet first media, payments, B2B E-commerce and E-commerce enablers are the top sectors receiving the most funding from investors between April and June 2022.

Neha Singh, Co-Founder, Tracxn, said, “The Tracxn report is a quarterly overview of the entire Indian startup ecosystem. It taps the journeys of various startups and institutional investors’ growth and successes. Through this report, we aim to give industry stakeholders key insights into the ecosystem that would help in business decision making backed by extensive market intelligence and thorough research and data analysis.”

Some of the report’s key highlights include 121 new startups closing their first funding rounds, four startups turning unicorns, 62 startups acquired, and 5 filing their IPOs.

With Leadsquared, Purplle, PhysicsWallah, and Open becoming new unicorns, the total valuation of unicorns escalated to $31.8 million in the past quarter (Q2 CY2022). GOAT Brand Labs, Fashinza, and Itilite entered the soonicorn club with fundraises of $88 million, $135 million, and $47.2 million, respectively.

With respect to exits, while eMudhra, Delhivery, Handicrafts village, Eighty Jewellers, and Veranda Learning Solutions filed for IPOs (Initial Public Offering), Blinkit (By Zomato), Whiteteak (By Asian Paints), and MyHQ (By ANAROCK) were the top acquisitions.

According to the report, Bangalore, Delhi, and Mumbai are the top cities attracting maximum investments. While IPV and Blume Ventures topped the investment charts in seed-stage startups, Sequoia Capital and Accel ranked highest in the early-stage startups funding standing. Sofina and DST Global are the leading late-stage institutional investors

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