VC funding dips in India in Q2

According to a report released on Monday, VC investment in India decreased in the April-June quarter (Q2) as investors turned their attention to cash management in anticipation of funding becoming more difficult to come by in the coming quarters.

For the fourth consecutive quarter, India's venture financing exceeded $6.5 billion in Q2, and among e-commerce, social commerce, and gaming, fintech remained the most popular sector for investment.

"In India, the funding hasn't dried up yet, but many startups are taking proactive steps to reduce their cash burn given the increase in federal interest rates, the geo-political crisis, and other evolving issues," said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.

While most of these deals were at very early stages, agritech also attracted an increasing number of transactions in India in Q2. As the industry develops, deal sizes are anticipated to increase in this market, according to the report.

Due to its relatively favourable macroeconomic environment and market demographics, India is expected to remain quite attractive to VC investors over the medium to longer term, the report said. However, VC investment in the country may be muted over the next quarter or two due to the global reduction in money supply and other factors.Globally, investors became pickier, and during the second quarter, VC funding reached $120.2 billion.