Fund flow to tech start-up ecosystem declined by 17% in Q2 CY‘22:Nasscom

However, growth stage funding was still on investors’ radar indicating continuity in the momentum

July 15, 2022 07:45 pm | Updated 07:45 pm IST

 

The June 2022 ended calendar quarter witnessed a dip in fund flow to the country’s tech start-ups ecosystem, said a quarterly investment analysis put out by Nasscom in association with PGA Labs on Friday.

Start-ups in the country have attracted investment of $6 billion in the second quarter of calendar 2022, indicating a 17% dip in fund flows quarter-on-quarter, it found.

The number of deals also dropped by 17% due to dampened market sentiments. However, growth stage funding was still on investors’ radar indicating continuity in the momentum, as per the analysis.

Some 52% of the funding that the quarter had seen was in the size of $100 million while the average ticket size was $29 million.

The report scanned the entire start-up ecosystem with a deep focus on verticals such as fintech, edtech, retailtech, health-tech and enterprise-tech.

FinTech and Media & Entertainment were the top sectors attracting 45% of total funding. Some 88% of funding in RetailTech and 74% of funding in Edtech went to growth stage start-ups. Media & Entertainment turned out to be an outperforming vertical, with 90% of the sector funding going into the late stage.

“Despite the reduction in deal value, funding in growth stage continues to increase,’‘ said the report. Four new unicorns were born in the calendar Q2 one each in Edtech, Fintech, SaaS and online marketplace sectors.

Some 63% of the total $6 billion funding was captured by B2C tech start-ups. Also, Tiger Global and Sequoia invested in the growth stage of 60% of these start-ups, found the study.

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