The Indian startup ecosystem has seen a significant amount of growth in the past few years, and this trend has continued in CY22. According to the PwC India report titled, “Startup Deals Tracker – CY22”, funding for Indian startups in CY22 was nearly USD 24 billion, a drop of 33% in comparison to CY21 but still more than twice the funds raised in CY20 and CY19 each. Early stage funding grew by 12% as compared to CY21, showing that despite the global slowdown, investors are still positive about the Indian start-up ecosystem. Additionally, the SaaS segment witnessed an increase of 20% in funding values during CY22 compared to CY21 and accounted for nearly 25% of all funding activity in CY22.
The report also highlighted the stages of funding, M&A transactions, and city-wise start-up funding. Early-stage deals accounted for 60–62% of the total funding in CY21 and CY22 (in volume terms). Average ticket size per deal was USD 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). These represented 38% of the total count of deals. Average ticket size in growth-stage deals was USD 43 million and late-stage deals was USD 94 million during CY22.
A 17% decline was witnessed in M&A deals during CY22 compared to CY21 in terms of deal volume, with 60% of the transactions being contributed by the top three sectors – SaaS, e-commerce+D2C and EdTech. E-commerce and D2C (61) and SaaS (60) witnessed the highest number of M&A transactions during CY22.
Bengaluru, NCR and Mumbai account for nearly 82% of total Indian start-ups as of December 2022. 28% of the start-ups in the top three cities have raised in excess of USD 20 million. Bengaluru witnessed the highest number of unicorns, followed by NCR and Mumbai. Similar trends have been noted for other companies that have raised more than USD 50–100 million.
Overall, the Indian startup ecosystem has seen a significant amount of growth in the past few years, and this trend has continued in CY22. Despite the global slowdown, investors are still positive about the Indian start-up ecosystem, and the SaaS segment has seen an increase in funding values. The top three cities – Bengaluru, NCR and Mumbai – account for nearly 82% of total Indian start-ups, and have seen the highest number of unicorns.