Indian startup funding hit 2-year low in Jul-Sep at $2.7 billion: PwC

Indian startup funding hit 2-year low in Jul-Sep at $2.7 billion: PwC
  • Only two startups in India attained unicorn status in April-June quarter, mirroring a global trend in decline in the number of new unicorns.
  • Experts find it hard to put a date on recovery in startup funding as investors have turned cautious amid erratic market conditions.
  • According to a recent report by Traxcn, tech startups are going through a funding winter that’s predicted to last for 12-18 months.
Startup funding has hit a two-year low at $2.7 billion across 205 deals in July-September quarter, says PwC India’s report.

Moreover, only two startups in India attained unicorn status in the same quarter. This mirrors a global trend which too saw a decline in the number of new unicorns last quarter.

“It is tough to predict how long the slowdown in funding will last but clearly, both founders and investors are being more selective and cautious in deal-making,” said Amit Nawka, partner-deals & India startups leader at PwC India.

Nawka believes that early-stage startups will be able to raise capital more easily as they are typically insulated from public market fluctuations as compared to late-stage deals.

“However, investors have already raised a lot of capital which needs to be deployed and this will ultimately find its way to the Indian startup ecosystem,” he added.


The report says that 38 merger & acquisition (M&A) deals involving startups were executed in the September quarter of 2022. Out of this, 30 were domestic, five were inbound and three were outbound deals.

SaaS and edtech witnessed the highest number of M&A deals in Q3 CY22, with nine and seven deals respectively. Edtech company upGrad has been the top acquirer in the quarter with four acquisitions – Wolves India, Harappa Education, Exampur and Centum Learning.

‘Cheques will be on the lower side’
According to a report by Traxcn, tech startups in India are through a funding winter which is predicted to last for the next 12-18 months.

“Startups are currently experiencing a funding slowdown which is likely to persist over the next one to one and a half years. Businesses in fact anticipate a recession and are preparing to cut costs. In this context, only companies with strong fundamentals may continue to receive cheques from investors, although on the lower side,” said Mohamad Faraz, founding partner at Upsparks, an early-stage venture capital firm.

According to Faraz, companies that are surviving the funding winter are those that are maintaining leaner and smaller budgets, cut flab, extend their runway and bootstrap until conditions get better for external funding.

Many startups including MobiKwik, OYO Rooms, Byju’s, boAt, Snapdeal, Droom, Pine Labs, PharmEasy have been postponing their plans of going public due to volatile market conditions, which could lead to poor demand from investors.

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