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33% Funding Drop in Indian Startups in FY22

PwC publishes report on Indian Startups

13 January 2023

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Jayashri Ghorpade

India produced 3X more unicorns than China in 2022.png
  • Indian startups are growing at an incredible rate year by year

  • There was a 33% funding drop in CY22 in comparison to CY21

  • SaaS and finetech startups take the leading spot

Start-up funding in CY22 was nearly $24 million, a 33%drop compared to CY21 but still a high fund in comparison with the CY20 and CY19. Reports from PwC states that the year commenced with a high funding of 12% compared to the CY21, which showed the interest of investors in the Indian start-ups despite the global issues and slowdowns.


Startup deals tracker, the report published by PwC also gives the account on the SaaS segment, where there was a 20% increase in the funding in CY22 when compared to CY21CY21 which was about 25% of the total funding in CY22. 


Amit Nawka, deals and India startup partner, told that despite the slowdown in the funding areas like SaaS were in the growth phase, while the other startups were trying to hold their funds by optimizing operating models and getting control over their cash runway by deferring investments.


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Reports state that the startup growth was high with continued investments in the early stage of the year. The first quarter of the year had a 12% increase in the funding growth in comparison with the CY21. By December 2022, India had 1800 new startups started with the funds, becoming a base for the startups for the forthcoming years. With innovations every second entering the world by technology, Infrastructures were also improved in India to support this growth in the industry of innovations, and a significant capital waiting to be invested, CY23 is now renewed year for the investors and the startups. 


But in comparison with the CY23, there was a decline in the funding for about 33%. CY22 had only $24 billion, while CY21 had $35 billion, that made the difference. The 5 sectors that ranked high were software as a service (SaaS), fintech, logi and autotech, edtech and direct to consumer (D2C), contributing approximately 71% of the total funding of CY22. Funding in CY22, had its 20% from SaaS which was low in CY21, and this made it the most funded sector in CY22. 


Media and entertainment gained the 2md spot while the funding in E-commerce and consumer businesses and edtech had 71% and 54% respectively. 


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