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Volume of VC deals in Indian startups rise in Jan-Oct, total deal value drops: Report

By Malvika Maloo

  • 25 Nov 2022
Volume of VC deals in Indian startups rise in Jan-Oct, total deal value drops: Report
Credit: 123RF.com

The Indian startup ecosystem saw a rise of 7.5% year-on-year in number of venture capital deals during the Jan-Oct period of 2022, as per a report, even as the total value of these deals saw a decline of 29.8% y-o-y across the period under review.

According to an analysis by London-based management consultancy GlobalData, Indian startups raised $19.3 billion across 1,456 deals in venture capital (VC) between January to October, 2022, against $27.5 billion across 1,355 deals in Jan-Oct 2021.

Citing global macroeconomic factors including rising interest rates and public market volatility, the report stated that VC firms have pivoted to a cautious approach towards startups and their business models amid a funding crunch through this year so far.

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The funding values this year, despite being smaller than last year, are still above 2019-2020 levels. Indian startups had raised $10.2 billion across 883 deals in 2019 and $6.1 billion across 922 deals in 2020. 

“Despite a decline over 2021, the total funding value during January-October 2022 still remains at a much higher level compared to the same period in 2019 and 2020,” said Aurojyoti Bose, lead analyst at GlobalData.

Meanwhile, October saw a rebound in deal value on a month-on-month basis. Funds raised during October rose 25.5% to $898.3 million, even as the volume dropped by 33.9% compared to the same seen in September, according to GlobalData. 

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This was significantly fuelled by edtech decacorn Byju’s $250 million round. 

“The total VC funding value still remained below $1 billion. In fact, October is the third month of 2022 with funding levels recording below $1 billion,” said Bose. “Nevertheless, the improvement in deal value in October could be seen as a positive sign.”

The total VC investment fell below $1 billion for the first time in July this year, when funding winter came knocking on the ecosystem's doors.

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The report is based on GlobalData’s Financial Deals Database, sourced from proprietary databases, primary and secondary research, and the firm’s in-house analysis. 

Last month, market intelligence firm Tracxn said in its quarterly report that funding raised by Indian startups from VC and private equity investors had dropped to $3 billion between July-September across 333 deals, compared to about $7 billion across 520 deals in April-June. The funding value has fallen sharply from about $11 billion for January-March that startups raised across 688 deals. 

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