Indian Startup Funding Surpasses $10 Billion for the Third Quarter

The Indian startup ecosystem has had a solid start to the year, with 14 unicorns being established and a total investment of $10 billion over 334 fundraising agreements. In addition, the startup ecosystem’s M&A transactions have been gaining traction.

According to a PwC India report published by PTI, the development of 14 additional unicorns brings the total number of businesses valued at over USD 1 billion in the nation to 84.

In its study, the UK-based professional services network organization stated that this would be the third consecutive quarter ending March 31, 2022, in which capital inflows garnered more than $10 billion in fresh financing into the domestic start-up ecosystem.

In addition, 14 unicorns were created in the first quarter of 2022, with a total fund inflow of $10.8 billion. With the establishment of five unicorns generating more than $3.5 billion, the SaaS industry accounted for the greatest portion of the total.

Despite global economic uncertainty, Amit Nawka, the consultancy’s startup head, told PTI that domestic businesses have continued to attract money, particularly in the growth capital stage.

Furthermore, as more businesses mature, discussions about corporate governance are becoming more mainstream, according to Nawka, and it will become increasingly crucial for startups to establish a corporate governance roadmap that is in line with their growth goals.

Nawka added that the SaaS ecosystem has seen a threefold increase in investments in the previous three years and that the pandemic has only increased this ecosystem internationally, given the growing relevance of remote working, productivity, and overall digital transformation.

In addition, the start-up ecosystem saw about 80 M&A transactions in Q1, fueled mostly by roll-up e-commerce enterprises. Companies using M&A as their primary business strategies, such as Curefoods, Mensa Brands, GlobalBees, and MyGlamm, remained the top acquirers throughout the time under study. Meanwhile, Upscalio and Evenflow are two more roll-up e-commerce startups that have joined the bandwagon this quarter.

Notably, around 38 percent of M&As in the first quarter were in the e-commerce and direct-to-consumer market, while 22 percent were in the SaaS space.

According to Nawka, growth- and late-stage start-ups received 89 percent of investment in Q1, but volume-wise, they represented 44 percent of all deals.

From January to March 2022, growth-stage investment was valued at $ 6.5-7 billion, with an average ticket size of $5570 million dollars Early-stage capital accounted for $761 million in inflows, with an average size of $4 million, accounting for 55% of the total.