Total funding in the first quarter of FY22 was up nearly 80% year-on-year (YoY) to $9.2 billion from $5.1 billion in the same quarter last year. However, total funding was down 12.3% sequentially, indicating a broader correction in the funding market.
“During Q1 of FY22 around $6.8 billion went towards late-stage funding, $2 billion towards early-stage and around $362 million towards seed-stage funding, taking the total to $9.2 billion,” the report, titled India Tech Q1 2022, said.
Despite
a slowdown in funding on a sequential basis, M&A deals are picking up.
According to data from Tracxn, more than 90 acquisition deals took place in Q1 of FY22. Prominent deals including Ola acquiring AvailFinance and Tejas Networks taking over Saankhya Labs.
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Another recent report published by Innoven Capital also said that the early-stage investment has been taking centre stage since 2021. ET reported in April, that an unprecedented funding boom last year
resulted in higher early-stage deals, with 63% additional capital flowing into companies across seed and pre-Series A rounds than in 2020.
“Number of International investors like Y Combinator, Soma Capital and Tiger Global Management for startups in India went up by 1% to 442 while the number came down quarter on quarter by 9%,” the report said.
YCombinator, for example, took part in around 33 rounds just in Q1 of FY22 and has invested in companies like Meesho, Razorpay and Groww in the past. Tiger Global took part in around 23 rounds, up 53% YoY, having backed companies like Flipkart, Byju’s and Ola in India in the past.
Other active investors during the quarter included Better Capital, 9 Unicorns, Venture Catalysts, T-Hub, Sequoia Surge and Axilor Ventures.
As per the report, the number of tech unicorns went up to 11 in Q1 of FY22 as from three in the same period last year, taking India’s total unicorn count to 1,049. The new unicorns included Games24X7, Oxyzo, CredAvenue, Hasura, Uniphore, XpressBees, ElasticRun, LivSpace, DealShare, DarwinBox and Lead.
Around 75 startups were added to the ‘soonicorn’ list from January to March 2022. These are companies that are likely to achieve a $1 billion valuation in the short to medium term. The top five soonicorns as identified by Tracxn are Blinkit, Plum, Airmeet, Atlan and Lambda Test
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“From January to March of 2022 around 93 acquisitions took place in India as against 50 during the first quarter of FY 21,” the report said.
Top acquirers with the most acquisitions in Q1 of FY22 were ShipRocket, Reliance Retail, Aurum House and CollegeDekho, it added.
