Indian start-ups raised $24 bn by CY22: PwC

The logo of Price Waterhouse installed on the facade of its office in Mumbai.
| Photo Credit: Reuters

Startups in India received funding of $24 billion in calendar 2022, a drop of 33% in comparison to CY21 but was still more than twice the funds raised in CY20 and CY19 each, reported PwC India on January 11.

PwC’s Startup Deals Tracker for 2022 found that early-stage funding grew by 12% compared to CY21, showing that despite the global slowdown, investors were still optimistic about the Indian start-up ecosystem. Also, the SaaS segment witnessed an increase of 20% in funding values during CY22 compared to CY21 and accounted for nearly 25% of all funding activities last year, it reported.

Amit Nawka, Partner — Deals & India Startups Leader, PwC India, said, “Despite the funding slowdown, some areas like SaaS and early-stage funding have remained upbeat. With significant dry powder (cash reserves) waiting to be invested, it seems likely that the funding scenario will begin to normalise after 2-3 quarters.”

As per the PwC deal tractor, early-stage deals accounted for 60–62% of the total funding CY22 in volume terms and the average ticket size $4 million per deal. In value terms, early-stage deals contributed to approximately 12% of the total funding in CY22 compared to nearly 7% in CY21. Growth- and late-stage funding deals accounted for 88% of the funding activity in CY22 in value terms. The average ticket size was $43 million and $94 million in growth-stage deals and late-stage deals, respectively.

In the M&A front, transactions declined by 17% in CY22 compared to CY21 in terms of deal volume, with 60% of the transactions being contributed by SaaS, e-commerce+D2C and EdTech serctors. E-commerce and D2C (61) and SaaS (60) witnessed the highest number of M&A transactions during the calendar.

Bengaluru, NCR and Mumbai attracted some 82% of the total chunk of funding received in the entire country in CY22.