Web 3.0, SaaS and fintech will be big focus areas for 2022 even though early stage investments are expected to slow down

• A report by InnoVen Capital noted that seven in ten respondents believe that Web 3.0 will be something to watch out for in 2022.
• The report is based on the inputs from several early-stage institutional investors such as 3one4 Capital and Blume Ventures.
• Early stage startups in India raised nearly half a billion dollars in seed and pre-Series A round in 2021.

Wb 3.0, software-as-a-service (SaaS) and fintech are emerging as the big focus areas for investors in 2022, a recent report by investment firm InnoVen Capital has revealed.

The report also noted that close to seven in ten, or 67%, respondents believe that Web 3.0 will be something to watch out for. Six in ten believe that SaaS will also be a top performer this year, while five respondents also have high hopes from the fintech industry.

Web 3.0 is the latest version of the Internet that leverages machine learning, artificial intelligence, and blockchain to achieve real-world human communication.

Healthtech and Creator Economy are also in the list for sectors to watch out for in 2022. Over 29% — three in ten — respondents have voted for healthtech and 24% of respondents are siding with the creator economy.

The report is based on the inputs from several early-stage institutional investors such as 3one4 Capital, Blume Ventures, First Cheque Ventures, Indian Angel Network, India Quotient, Kae Capital, Mumbai Angels, Omnivore, Orios Venture Partners, Waterbridge Ventures, Good Capital, and YourNest Capital.

With this being said, five in ten respondents also believe that the early stage funding may see some slow down in the coming years. This will be quite disappointing to see as early stage funding has started to gain momentum over the last one year.

“Early-stage investment activity has proven to be resilient in 2021 with bigger transaction sizes at higher valuations and an increase in the number of Angel Syndicates which are all clear indicators of a maturing early-stage ecosystem. Although the market sentiment shows muted hints of slowdown, however, we expect the early-stage funding environment to remain strong,” Tarana Lalwani, partner at InnoVen Capital India, said.

Early stage startups in India raised nearly half a billion dollars in seed and pre-Series A round in 2021, compared to $365 million in the last year. The deal size also grew from 243 in 2020 to 316 in 2021.

The average deal size in the early stage has also increased from $1.5 million to $1.8 million in this time span.
Bengaluru continues to be the top destination for investors over the last three years, followed by Delhi NCR. According to InnoVen Capital’s latest report, two out of three early-stage investments are raised by startups based in Bengaluru and Delhi NCR. Nearly 12% of all fundings in raised by companies set up in Mumbai.

Besides this, Pune and Chennai are among the top five startup cities in India.

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