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

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.

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. 

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.

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.