Startup funding in India has taken a hit, and the monsoons haven’t brought any relief. The data speaks for itself. In July, the lack of growth stage deals, limited support from large funds, ongoing layoffs, and uncertainty surrounding future funding rounds have caused trouble for the entire startup ecosystem. Fintrackr’s compiled data reveals that over 80 startups managed to announce fresh fundraises, amounting to approximately $461 million in July. This included 11 growth stage deals totaling $280.5 million and 72 early-stage startups raising over $180 million, including 16 undisclosed deals. Notably, this is the lowest monthly fundraising amount since January 2021 or the past 30 months.
Although Indian startups had been averaging around $1 billion in funding this year, June saw a sharp drop with only $636 million secured. However, the number of startups participating in fundraising in July was comparable to that of June. On a yearly basis, homegrown startups raised $869 million in July 2022, compared to a staggering $4.6 billion in July 2021. In 2022, July emerged as the lowest funded month, with no growth stage startup crossing the $50 million funding mark for the first time this year.
In the funding charts, insurtech company RenewBuy and edtech company LeverageEdu stood out, each raising $40 million. Online furniture retailer Furlenco secured $36.5 million from Sleepwell-parent Sheela Foam through a strategic deal that fell short of its peak valuation. Other companies like D2C jewelry brand GIVA and battery swapping network Battery Smart made it to the top five list. The top 10 also included digital transformation consulting company KaarTech, trucking aggregator LetsTransport, high-end computing solutions provider Netweb Technologies, and Enterprise SaaS management platform Zluri. Notably, Spacetech Pixxel and SaaS company Viniculum were among the growth stage companies that didn’t disclose their transaction details.
In contrast to previous months, July saw no sightings of unicorns, indicating the impact of low funding on the startup landscape. Early stage deals saw 56 startups raise approximately $180 million, with an average funding size of $3 million. Telecom company WIOM led the list with $17 million funding, followed by industrial robotics startup Ati Motors with $10.85 million. IoT startup Cavli Wireless, Smartphone retail chain Smart Dukaan, and NBFC startup Dvara KGFS also made it to the top five list, each raising $10 million.
The decline in startup funding has become apparent, raising concerns about the financial health of the ecosystem. Early-stage startups are feeling the pinch, with reduced funding size becoming a trend. As the industry navigates through these challenges, the hope for a revival in funding remains on the horizon.