Investment In Indian startups In H1 CY23 Lowest In Last Four Years: PwC India Report As per the report, in value terms, early-stage deals contributed to approximately 16% of the total funding in H1 CY23 but were at their lowest in H1 CY23 as compared to the previous two years
By Teena Jose •
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A PwC India report stated that funding in Indian startups fell by 36% in January-June to $3.8 billion, the lowest half-yearly number in the last four years, as investors are taking longer time in due diligence of every aspect of business. The report titled, 'Startup Perspectives – H1 CY23' further said that during the last few quarters, despite challenging funding market conditions, investors have shown strong support for their portfolio companies by doubling down on their investments in companies that demonstrated positive growth.
"Active VC firms in India have secured new funds in the past year and we can expect the pace of investments to pick up in the next few months. In the interim, there has been an increase in the due diligence being carried out by investors before making investments, both in terms of detailing as well as coverage - from typical finance and legal, to areas like technology, HR and business processes - to ensure that the startups have a robust corporate governance framework," said Amit Nawka, Partner - Deals and India Startups Leader, PwC India.
As per the report, early-stage deals accounted for 57% of the total funding in H1 CY23 (in volume terms). In value terms, early-stage deals contributed to approximately 16% of the total funding in H1 CY23 but were at their lowest in H1 CY23 as compared to the previous two years.
"Growth- and late-stage funding deals accounted for 84% of the funding activity in H1 CY23 (in value terms). These represented 43% of the total count of deals in this period. The average ticket size in growth-stage deals was $19 million and late-stage deals were $52 million during H1 CY23", stated the report.
The report further said that while venture capital (VC) funding declined in H1 CY23, M&A transactions remained the same when compared to H2 CY22.Eighty M&A deals involving startups were executed in H1 CY23. Of these, 80% were domestic transactions and the rest were cross-border transactions. Similar to the VC funding activity, SaaS (23), fintech (11) and e-commerce and D2C (10) continue to witness the highest number of M&A transactions during H1 CY23, the report said.
