Funding in Indian startups shrinks by greater than half • TechCrunch

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

Indian startups raised $3 billion within the quarter that led to 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 prime tier funds in India — Sequoia India and Southeast Asia, Lightspeed Enterprise Companions, Accel, Elevation Capital, Matrix Companions India — have raised document giant funds this yr.

In Q3, the Indian startup ecosystem undertook 334 funding rounds, down from 674 in Q3 2021. The examine 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 median, down over 70% from $142 million throughout the identical interval final yr, Tracxn stated.

Buyers globally have develop into cautious in latest months as market reverses a lot of the positive aspects 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 greater than that of the earlier spherical. Due diligence, which largely went out of vogue 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 might proceed for longer as a result of some unicorn founders are unwilling to simply accept decrease valuations.

It doesn’t seem that issues will probably be bettering anytime quickly. Byju’s, India’s most respected startup, has postponed its plans to file to go public this yr. Funds resort chain Oyo, as soon as valued at $10 billion, is seeking to listing early subsequent yr however its largest backer has minimize its valuation to $2.7 billion.

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

Some charts and different fascinating stats from the report: