Start-ups raised $7.2 bn in Q1 CY22; large deals hit: NASSCOM-PGA Labs report

Start-ups in India have raised $7.2 billion in Q1 CY22, a substantial increase from $4.5 billion in Q1 CY21, a joint report by industry body NASSCOM and PGA Labs stated. Even as the deal volume increased to 247 transactions in Q1 CY22 across the ecosystem as compared to 175 in a year ago period, the contribution of large deals (with average deal size larger than $100 million) to fund-raising shrunk this year. Q1 CY22 (January- March) minted a total of 15 unicorns.

The NASSCOM-PGA Labs report suggested that compared to 63 per cent share of large deals to the fund raising in Q1 CY21, the proportion of these transactions (with deal size of $100 million and above) was 58 per cent for Q1 CY22. The report further said that 81 per cent of the funding activity was driven by early-stage and growth-stage deals. It added that 76 per cent of the total number of deals were small-ticket with average size of $25 million and less.  In terms of sectors, edtech, enterprise and fintech constituted 54 per cent of the total start-up deals in Q CY22.

The report noted that B2B tech start-ups funding accounted for 59 per cent of the total $7.2 billion, and stood at $4.2 billion. When it comes to investors, the top investment firms like Sequoia Capital, Accel and Tiger Global have backed a diversified group of companies this year, the report suggested. Sequoia remained the top investor for Q1 CY22, majorly across sectors like enterprise tech, fintech, retail tech, edtech etc.

The report also pointed out that Indian start-ups saw the birth of 15 more billion dollar-start-ups (also popularly known as unicorns) during Q1 CY22. Nearly half of the new unicorns (at 7) were from sectors like enterprise tech, fintech, supply chain management and logistics. Mamaearth (belonging to the beauty & personal care segment) was the 1st unicorn of 2022 with $52 million funding, led by Sequoia Capital.