Funding for Indian start-ups hits two-year low in Q3 CY22 at USD 2.7 billion: PwC India Report

The global slowdown in funding continues with start-up funding in India in Q3 CY22 hitting a two-year low at USD 2.7 billion across 205 deals, as per the PwC India report titled, “Startup Deals Tracker – Q3 CY22.” While a decline in funding is noted across all stages of investment – early, growth and late – the decline has been the least in early-stage deals which contributed around 21% of the total funding by value in Q3 CY22 compared to approximately 12% in Q2 CY22, showing that venture capital (VC) firms continue to back the Indian start-up ecosystem.

Amit Nawka, Partner – Deals & India Startups Leader, PwC India, said, “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. In general, early-stage start-ups will be able to raise capital more easily as they are typically more insulated than late-stage deals from fluctuations in the public markets. However, investors have already raised a lot of capital which needs to be deployed and this will ultimately find its way to the Indian start-up ecosystem.”

Startup Perspectives for Q3 of CY22 – A snapshot

  • Stages of funding: Growth- and late-stage funding deals accounted for 79% of the funding activity in Q3 CY22 (value terms). These represented 30% of the total deal activity (count terms). Average ticket size in growth-stage deals continued to decline and was USD 32 million during Q3 CY22. Early-stage deals accounted for 70% of total funding in Q3 CY22 compared to their 60% share in Q2 CY22 (in volume terms). Average ticket size per deal ranged from USD 4–5 million per deal. In value terms, early-stage deals contributed around 21% of the total funding in Q3 CY22 compared to around 12% in Q2 CY22.


  • M&A transactions: 38 M&A deals involving start-ups were executed in Q3 CY22 – 30 domestic, five inbound and three outbound deals. SaaS and EdTech witnessed the highest number of M&A transactions during Q3 CY22 – nine in SaaS and seven in EdTech. Edtech company upGrad has been the top acquirer this quarter with four acquisitions – Wolves India, Harappa Education, Exampur and Centum Learning.


  • Global and Indian unicorns: Only two start-ups in India attained the unicorn status in Q3 CY22, mirroring a global trend in decline in the number of new unicorns this last quarter. Globally, Q3 CY22 produced 20 unicorns and 45% of them are from the SaaS segment. No new decacorns were added in this quarter.

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