The total funding raised by Indian startups in just-ended June quarter fell 33 per cent sequentially to $6.9 billion, according to a report by market intelligence platform Tracxn.
The capital raise during the quarter was not just lower than $10.3 billion logged between January and March 2022, but also marked a decline when compared to the same quarter of previous year ($10.1 billion in Q2 of 2021).
The funding seems to have cooled off the previous high, witnessed in Q3 2021, the report said, while indicating a "major consensus amongst market players of a 'winter of funding' or a downturn in investors' confidence and sentiments towards funding startups".
According to the report, Indian startups raised $6.9 billion in Q2 2022 (April-June) in 409 funding rounds.
"... the top startups being VerSe ($805 million - Series J), Delhivery ($304 million- Series J) and udaan ($275 million- Series D). They were followed closely by ShareChat ($255 million- Series G) and upGrad ($225 million- Series F)," the report said.
Social platforms, internet first media, payments, business-to-business e-commerce and e-commerce enablers were the top sectors that attracted the maximum funding from investors between April and June 2022.
The report 'Tracxn Geo Quarterly Report: India Tech Q2 2022' noted that 121 new startups closed their first funding rounds, four startups turned unicorns, 62 startups got acquired and 5 launched their IPOs (Initial Public Offerings).
With Leadsquared, Purplle, PhysicsWallah, and Open becoming new unicorns, the total valuation of unicorns swelled to $31.8 billion in the past quarter (Q2 2022).
"GOAT Brand Labs, Fashinza, and Itilite entered the soonicorn club with fundraises of $88 million, $135 million, and $47.2 million respectively. With respect to exits, while eMudhra, Delhivery, Handicrafts village, Eighty Jewellers, and Veranda Learning Solutions filed for IPOs, Blinkit (By Zomato), Whiteteak (By Asian Paints), and MyHQ (By ANAROCK) were the top acquisitions," it further said.
The Q3 2021 saw investments topping the charts, grossing $15 billion in funding rounds "which hasn't been surpassed in recent times".
"It's leading to the major consensus amongst market players of a 'winter of funding' or a downturn in investors' confidence and sentiments towards funding startups," it said.
The 'funding winter' is a result of the market slowdown and economic volatility based on the current macroeconomic conditions and geopolitical situation that's intensifying inflation, interest rates and commodity prices.
Bengaluru, Delhi and Mumbai are the top cities attracting the maximum investments, as per the report.
While IPV and Blume Ventures topped the investment charts in seed-stage startups, Sequoia Capital and Accel ranked highest in the early-stage startups funding. Sofina and DST Global are the leading late-stage institutional investors, the report said.