According to a PwC India report, geopolitical uncertainty appears to be weighing on Indian startups, with total funding falling by 40% to USD 6.8 billion in the April-June quarter. According to the PwC India report titled 'Startup Deals Tracker - Q2 CY22,' early-stage deals accounted for more than 60% of the total, with an average ticket size of USD 5 million.
"After three consecutive quarters of raising more than USD 10 billion, the total funding in the Indian startup ecosystem fell by 40 percent during Q2 CY22 to reach USD 6.8 billion.
"The decline can be attributed to a global slowdown, decrease in tech stock valuations, inflation, and geopolitical instability," it added.
According to the report, software as a service (SaaS) and fintech companies received the most funding in the second quarter of fiscal year (CY) 2022, totaling more than USD 3.1 billion. It went on to say that early-stage deals accounted for more than 60% of total deal volumes, with an average ticket size of USD 5 million.
Funding in early-stage deals remained stable at around USD 800 million in Q2 CY22 and could remain stable or even grow in the coming quarters, given that entrepreneurial activity continues to flourish with increased digitization and the quantum of venture capital funds waiting to be deployed in the Indian market, it added.