Start-up funding dropped to $6 billion, a 17% fall, says NASSCOM

Start-up funding has dropped 17 per cent in the April-June quarter said a NASSCOM-PGA’s jointly published quarterly report.

Due to a macro-economic slowdown, funding for start-ups dropped to $6 billion, a 17 per cent fall quarter-on-quarter (QoQ), said the report. The number of deals also fell from 247 in January-March to 204. Earlier in the month, a Tracxn report had said that funding has declined for start-ups leading to a major ‘funding winter’ amid a fall in investor confidence.

Meanwhile, the NASSCOM report said that 52 per cent of the funding ticket size was $100 million or above, while 70 per cent of deals by volume were below $25 million. The growth stage was the most funded one, and fintech has emerged as the top funded vertical, said the report. While the media and entertainment space was an “outperformer” in the quarter.

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Media reports in financial dailies said that it was pertinent, however, there was a drop in the funding of early-stage companies. Though the number of deals dropped across most sectors, the growth stage companies dominated which showed the confidence the investors continued to have in the sector.

There is an investors’ preference for already scaled-up start-ups, said the report, adding that despite the reduction in the total deal value, funding in late stage start-ups in Q2 CY22 is equal to Q1 CY22. Investors like Sequoia and Tiger Global were the most active across sectors this quarter with 15 and 14 deals each, while Alpha Wave, Accel had eight and six deal respectively.