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<ul><li>Thousands lost their jobs amid a deepening funding winter in 2022 amid massive layoffs by the tech companies.</li><li>According to a PwC <keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword> report, startup funding in India hit a two-year low at $2.7 billion in the third quarter of 2022.</li><li>Seed stage rounds also experienced a contraction and dropped by 38 per cent as compared to the previous year.</li></ul> Indian startups, which saw a massive 35 per cent drop in funding in 2022 -- from $37.2 billion in 2021 to $24.7 billion (till November) -- are bracing themselves for a deepening funding winter in 2023 as recession fears loom. Although some startups, like fintech platform <keyword id="6557529" type="General" weightage="50" keywordseo="kreditbee" source="Orion">KreditBee</keyword> ($200 million), Foodtech platform HealthKart ($135 million) and HRtech software-as-a-service (SaaS) platform BetterPlace ($40 million), raised decent funds in December last year and in the beginning of January, the scene overall is grim as VC money has squeezed. Thousands lost their jobs amid a deepening funding winter in 2022 amid massive layoffs by the tech companies, which still continues. According to a PwC India report, startup funding in India hit a two-year low at $2.7 billion in the third quarter of 2022. In 2022, the significant drop in funding was attributed to a decline in late-stage investments, which fell by 45 per cent from $29.3 billion in January-November 2021 to $16.1 billion for the same period this year, according to data provided by <keyword id="2779670" type="General" weightage="80" keywordseo="tracxn" source="Orion">Tracxn</keyword>, a leading global market intelligence platform. Seed stage rounds also experienced a contraction and dropped by 38 per cent as compared to the previous year. The report said that 22 startups entered the unicorn club in 2022, as compared to 46 in the previous year.The number of big ticket ($100 million and above) funding rounds dropped by 35 per cent to 55 as compared to 85 in the reported period. The number of funding rounds saw a drop of 30 per cent, from 2,647 last year to 1,841 this year, the report said. "The funding winter, which began in Q4 of 2021, will persist in 2023 as well. In order to survive the drought, startups are taking unit economics more seriously, which has been illustrated through the series of mass layoffs that have occurred this year," said <keyword id="520013" type="General" weightage="80" keywordseo="neha-singh" source="Orion">Neha Singh</keyword>, Co-Founder, Tracxn. "Although we are currently experiencing a slump, the situation is prompting startups to establish clearer and more sustainable paths to growth, as investors' evaluation metrics begin to emphasise good profitability over growth at all costs," Singh had said in a statement. The startup ecosystem's funding winter could last another 12 to 18 months and the industry may face "a lot of turmoil and volatility", Flipkart CEO <keyword id="6379357" type="General" weightage="80" keywordseo="kalyan-krishnamurthy" source="Orion">Kalyan Krishnamurthy</keyword> warned recently. According to <keyword id="12046361" type="General" weightage="80" keywordseo="shrijay-sheth" source="Orion">Shrijay Sheth</keyword>, Founder, Legalwiz.in, 2023 will continue to be the year of sustenance for most, and funders will continue to remain more cautious. "Both valuation multipliers and funding opportunities will go more conservative. Startups must build better units economics as opposed to expensive acquisitions driven growth channels. Geo-political issues, Global supply chain crisis and other macro issues are expected to prevail," he said. However, this also needs to be seen as a year where resilient, innovative and problem-solving entrepreneurs shall get an opportunity to stand out from the crowd. "As the macro environment gets tougher, we can expect some excellent business models to outshine the rest with high levels of innovation and frugality. Also, mostly the serious funding houses will prevail while we will see visitors in the VC world take a break," <keyword id="262579" type="General" weightage="80" keywordseo="sheth" source="Orion">Sheth</keyword> noted. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/there-is-a-link-between-drinking-sugary-sodas-and-hair-loss-says-beijing-based-study/slidelist/96796018.cms">There is a link between drinking sugary sodas and hair loss, says Beijing-based study</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/chaman-metallics-first-sme-ipo-of-2023-subscribed-197x/articleshow/96795916.cms">Chaman Metallics, first SME IPO of 2023, subscribed 197x</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/60-of-blue-and-grey-collar-jobs-go-to-freshers-with-tech-skills-billion-careers-report/articleshow/96795198.cms">60% of blue and grey collar jobs go to freshers with tech skills: Billion Careers report</a>

India's startup economy stares at deepening funding winter in 2023

Bengaluru, Bengaluru-headquartered <keyword id="2461546" type="DOMAIN" weightage="20" keywordseo="FinTech">FinTech</keyword> lending startup <keyword id="6557529" type="UNKNOWN" weightage="20" keywordseo="KreditBee">KreditBee</keyword> on Monday said it has concluded its Series C equity round worth $75 million (about ₹545 crore) from <keyword id="648852" type="LOCATION" weightage="20" keywordseo="Premji-Invest">Premji Invest</keyword>, Mirae Asset Naver Asia Growth Fund, Alpine Capital and <keyword id="9361494" type="COMPANY" weightage="20" keywordseo="Arkam-Ventures">Arkam Ventures</keyword> consisting of both primary and secondary investment. With the current round of fund raise, the company wants to drive credit uptake in the economy especially for the unserved and underserved segment of the population. "With a larger portfolio of loan products, our objective is to provide credit to over 180 million New-to-Credit customers who were not provided formal credit earlier. This investment would help us take more positive steps towards achieving that," <keyword id="229206" type="DOMAIN" weightage="20" keywordseo="Madhusudan">Madhusudan</keyword> E, Co-Founder &amp; CEO of KreditBee, said in a statement. The holding entity previously raised over $43 million cumulatively in equity from marque investors including ICICI Bank and Arkam Ventures. Registered in March 2016, the group entity also holds Krazybee Services Private Limited -- a non-deposit taking non-banking financial company (NBFC-ND-SI). The group launched its flagship brand KreditBee in May 2018, focused on full-stack digital lending for young professionals. The platform specialises in providing digital personal loans and consumer durable loans to both salaried and self-employed. The loan amount disbursed can go as high as ₹2 lakh while the tenures range from two months to 15 months. The company said it currently has over 1,200 employees and a user base of over 20 million with over 4 million credit customers. The platform plans to diversify its product offering by venturing into digitally-enabled secured loans, home loans and credit line. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-s21-ultra-5g-review-the-best-android-smartphone-yet/articleshow/80913148.cms">Samsung Galaxy S21 Ultra 5G review – the best Android smartphone, yet</a> <a href="https://www.businessinsider.in/business/startups/news/this-startup-helps-you-watch-shows-shop-online-and-access-the-internet-even-without-a-data-connection/articleshow/80918896.cms">This startup helps you watch shows, shop online and access the internet even without a data connection</a> <a href="https://www.businessinsider.in/science/research/news/worlds-oldest-beer-factory-discovered-in-egypt-was-producing-50000-pints-at-a-time/articleshow/80920087.cms">Drink like an Egyptian: Historians discover the world’s oldest beer factory in Egypt</a> <a href="https://www.businessinsider.in/stock-market/news/elon-musk-wants-major-holders-of-cryptocurrency-dogecoin-to-sell-most-of-their-coins/articleshow/80920866.cms">Elon Musk wants major holders of cryptocurrency Dogecoin to sell ‘most of their coins’</a>

Lending startup KreditBee gets ₹545 crore from Premji invest, Mirae Asset and others

<ul><li>VC investments in India softened in the first quarter of 2023 but expected to pick up in the latter half of 2023 says a KPMG report. </li><li>This quarter, VC investors were inclined to make smaller investments in startups with more reliable valuations. </li><li>In Q1 2023, VC investment in Asia declined significantly, dropping from $25.5 billion in Q4 2022 to just $13.5 billion.</li></ul>VC investment in India has softened in the January-March quarter of 2023 as investors were picky and scrutinized potential deals more intensely, says a Venture Pulse report by KPMG. VC investments went down to $2.1 billion in the quarter, down by 77% as compared to the same quarter last year when VCs poured in $9.1 billion into the market. “Despite the current slowdown in VC funding, macro factors in India remained relatively strong compared to other jurisdictions, which is driving optimism that the country will see a bounce back in VC investment in the later half of 2023,” said the report. The FOMO effect VC investments in Q1 of 2023 hit a 11-quarter low, as VC investments were at $2.1 billion last in the second quarter of 2020 – right when the lockdowns had started. Soon after however came a boom time. KPMG says that Fear of Missing Out or FOMO drove a lot of VC investment in India in 2021 and early 2022. However, without the FOMO effect is now gone and VCs enhanced their focus on startup performance and profitability. “The biggest change in India is that the euphoria for deals has died down. The FOMO has gone. The big ticket deals have also dried up, which has had an outsized impact on our total investment numbers,” says Nitish Poddar, partner and national leader, PE KPMG in India. Fintech was still a major area of investment, with large deals such as PhonePe, NoBroker, KreditBee, and Insurance Dekho. Agtech and gaming also saw increased interest. However, edtech interest declined in Q1 2023 after a period of high enthusiasm. “But despite the visible decline, it’s important to know that a lot is still happening in India. The macros here are still very good. We’re still seeing a lot of funding in pre-series A deals. And we’re still seeing a lot of new micro funds being raised in the country — funds under $100 million with check sizes from $1–5 million,” says Poddar. VC investments in Asia decline, Down rounds go up In Q1 2023, VC investment in Asia declined significantly, dropping from $25.5 billion in Q4 2022 to just $13.5 billion. This was the lowest quarter for VC investment in the region since Q2 2015, with several factors contributing to the decline. In China, a surge in Covid-19 cases impacted VC activity prior to the New Year holidays. Hong Kong was affected by rising interest rates and a slowdown in IPO activity, while India experienced investors becoming more selective with their investments. Japan was the only country in the region to see an increase in investment during Q1 2023, but the total was still far lower than Q1 2022. The data also shows that down rounds (when the pre-money valuation of a fundraising round is lower than the post-money valuation of the round previous) has gone up significantly in 2023 as compared to the last year, the report reveals. In Q1 2023, the global VC investment trend showed a decline in each quarter following its peak of over $200 billion in Q1 2022. By Q1 2023, the total VC investment worldwide had dropped significantly, falling well below $60 billion. The uncertain global market, which is impacted by factors such as rising interest rates, domestic and geopolitical challenges, economic concerns, and the war in Ukraine, meant that no region was immune to the changing market conditions. This resulted in investors becoming increasingly cautious and risk-averse, leading to a reduction in VC investment activity.

FOMO out, scrutiny in: VC investments fall 77% in Q1 2023 says KPMG

<keyword id="46431" type="General" weightage="100" keywordseo="india-inc" source="Orion">India Inc</keyword> recorded 2,007 deals worth $127 billion last year, a 6 per cent decrease in deal volumes over 2021, despite the global macroeconomic conditions, a report showed on Friday. The year also recorded 11 multi-billion-dollar deals amounting to $82.5 billion and 97 deals valued between $100 and $999 million, amounting to $26.2 billion, according to <keyword id="10410446" type="General" weightage="80" keywordseo="grant-thornton-bharat" source="Orion">Grant Thornton Bharat</keyword>'s annual deal tracker report. The year 2022 also saw a 47 per cent increase in the values on the back of a few marquees deals that no other year witnessed. "It is worth noting that even against the global recession outlook, <keyword id="3658" type="General" weightage="50" keywordseo="india" source="Orion">India</keyword> has been faring well. However, deal activity witnessed two different phases, as the second half did not see the highs of the first half," said <keyword id="53115" type="General" weightage="50" keywordseo="shanthi" source="Orion">Shanthi</keyword> Vijetha, Partner-Growth at Grant Thornton Bharat. The Indian mergers and acquisitions (M&amp;A) space saw 477 deals worth $91.4 billion in 2022, a 200 per cent increase compared to 2021. Deal values were driven by the <keyword id="45123" type="General" weightage="80" keywordseo="hdfc" source="Orion">HDFC</keyword> and HDFC Bank merger ($40 billion), which was the biggest deal ever in Indian history. However, barring this deal, the year witnessed a significant increase in values showing the positive outlook of the Indian markets. The start-up and IT sectors dominated the space with 44 per cent of total volumes, while the banking and manufacturing sectors led the values, said the report. "Domestic and outbound M&amp;A continued to see momentum on the back of a resilient domestic economy, whereas private equity (PE) investments and inbound M&amp;A slowed down due to funding winter and global uncertainty," said Vijetha. The PE space saw 1,530 deals worth $35.4 billion, including four deals in the billion-dollar category and 66 deals valued between $100 million and $999 million, accounting for 63 per cent of total PE deal values with only 5 per cent of deal volumes. The start-up space attracted the most investment ($7.4 billion across 991 deals) with a slight decline of 8 per cent in volumes, compared to the 34 per cent decline in investments indicating lower ticket size investments, followed by e-commerce, which pulled in $6.6 billion and declined by 56 per cent in investments. Bengaluru topped the charts in volumes as most companies were born there, and Mumbai topped in values and accounted for 27 per cent of total values. The year witnessed the second-highest number of initial public offerings (IPO) listings in the last 11 years. However, this translated into 40 IPO listings raising $8.3 billion, a 38 per cent decrease in volumes and a 53 per cent decrease in values, the report said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/kreditbee-closes-200-million-series-d-from-advent-international-mufg-bank-others/articleshow/96791309.cms">KreditBee closes $200 million Series D from Advent International, MUFG Bank, others</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/lt-rvnl-ril-and-other-stocks-in-focus-on-friday/articleshow/96780357.cms">Sensex, Nifty50 end the first week of 2023 in the red – IT, financial services amongst top losers</a>

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India's startup economy stares at deepening funding winter in 2023

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Lending startup KreditBee gets ₹545 crore from Premji invest, Mirae Asset and others

IANS

FOMO out, scrutiny in: VC investments fall 77% in Q1 2023 says KPMG

Anagh Pal

India Inc logs 2,007 deals worth $127 bn last year, 6% down from 2021: Grant Thornton

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