The first quarter of calendar year 2022 (Q1: 2022) has been an interesting ride for Indian startups.
According to YS Research data, the January to March 2022 period recorded 482 funding deals – 1.9 times, or 89 percent higher than 255 deals seen in Q1: 2021.
Also, at $10.02 billion, the fundraising in Q1: 2022 has been 2.7 times, or 169.5 percent higher than $3.71 billion raised in the same period last year.
And, the quarter saw 14 startups elevating to the billion-dollar-plus valuation club, thus joining the Unicorns of India. The promising statistic that Q1: 2022 offers on the unicorns’ part is that the 14 unicorns of 2022 are little over 31.8 percent of the 44 unicorns that evolved during 2021.
Here is the exact order of evolution of the 2022 unicorns: Fractal, LEAD, Darwinbox, DealShare, Polygon, Livspace, ElasticRun, Xpressbees, Uniphore, Hasura, CredAvenue, Amagi, Oxyzo, and Games24X7.
Unraveling the stages and round
The early-stage funding saw a big jump with 361 deals, worth $1.51 billion, clinched in Q1: 2022 compared to 189 deals, worth $529.3 million recorded in the same period last year. On an absolute basis the deal value and deal count saw an increase of 185.45 percent and 91.01 percent respectively.
Deals in the growth stage also grew the highest among all the stages in the latest quarter, with funding value growing 404.9 percent from $605.5 million in Q1: 2021 to $3.05 billion. The number of growth-stage deals, at 71 in Q1: 2022, were 173.08 percent higher than 26 in Q1: 2021.
Late-stage deals also grew by 129.55 percent in value terms, from $2.27 billion last year to $5.22 billion in Q1: 2022, while the number of deals grew 52.17 percent from 23 to 35 in the latest quarter.
Debt financing saw a decline of 24.48 percent in the value of funding at $233.91 million in Q1: 2022, compared to $309.73 million last year. The number of debt financing deals also declined by 11.76 percent to 15 in Q1: 2022, compared to 17 in the same period last year.
On the funding rounds’ segregation, Pre-Series A and Series A, saw 155 percent and 108.33 percent increase in the deal count, at 255 and 59, compared to 100 and 24 each in Q1: 2021. Similarly, at $329.7 million and $866.1 million, the funding value grew by 168.39 percent and 435.55 percent in Q1: 2022 compared to $122.8 million and $161.7 million in the respective series last year.
The unspecified rounds, worth $4.55 billion across 101 deals in Q1: 2022, were the largest chunk of the deal value – accounting for 45.4 percent of the $10 billion raised in the quarter -and grew 170.36 percent in the latest quarter compared to $1.68 billion (45.27 percent of the total) in Q1: 2021 across 89 deals.
Sector-scan in Q1: 2022
The top five sectors in Q1: 2022 included fintech and financial services where 81 deals, worth $1.75 billion in Q1 2022, where 80 percent higher in deal count and 202.76 percent higher in terms of the funding value of $578.3 million, across 45 deals, in Q1: 2021.
At $1.14 billion across 34 deals, edtech and education services recorded an annual growth of 101.36 percent compared to $567.1 million, across 30 deals, in Q1: 2021.
The logistics and supply chain sector saw $ 745.9 million being raised across 14 deals, saw the value growth of 1,385.86 percent compared to $50.2 million, across 4 deals in Q1: 2021.
With 4 deals worth $451 million, the blockchain is the sector which deserves to be looked at closely, accompanied by artificial intelligence ($405 million: 4 deals), and hyperlocal ($340 million: 2 deals), which together hold-up in the top 10 funded sectors of Q1: 2022.
Whether consolidation will play a role in the coming months, only time will tell. In an earlier conversation with YS, GV Ravishankar Managing Director, Sequoia Capital India said – “There has been a focus on COVID-19-led technological and digital adoption like ecommerce, edtech, and there have been several beneficiaries. This just meant that more companies saw significant traction, and this led to investors putting in more capital in the market.”
Bengaluru remains the undisputed champion
With 163 deals accounting for $5.44 billion, Bengaluru remains the undisputed capital of India’s startup ecosystem, from the fund-raising standpoint, in Q1 2022. Delhi-NCR follows with 132 deals accounting for $2.01 billion.
The latest quarter is different from the regular ones as Chennai, with 28 deals accounting for $903.92 million has outranked Mumbai which saw 79 deals raising $634.5 million during Q1: 2022.
Sequoia and Tiger continue to lead
In terms of top investors on Q1: 2022, Sequoia Capital India has already made over 22 investments, followed by fintech unicorn ‘s founder – Kunal Shah, with 20 deals, and Tiger Global with 19 deals.
Among the other notable investors. Accelhas invested through 11 deals, while Alpha Wave Global, , Sixth Sense Ventures, Norwest Venture Partners, Matrix Partners, and had respective involvement in 9, 8, 7, 6,6, and 6 deals during Q1: 2022.
Agnostic of the funding stage and series, YS Research has recorded 1,120 unique investor names across the three months of the current calendar year.
