Investors remain cautious as November funding logs an uptick at $1.27 billion
Indian startups raised $1.27 billion of funding in November the highest in a month since June when a funding slowdown became palpable and started hitting the financing market in India. The increase in funding last month has mostly been led by early and growth-stage rounds that crossed the $1 billion mark in proceeds after more than five months, as per data from Venture Intelligence.
Industry experts said the latest data would be for deals that closed a few months ago, as typically that is the time needed to officially announce raising of funds. Despite a slight increase in deal activity, tech investors said it does not point to a sustained recovery. Late-stage funding also continues to remain under stress.
The data showed that after June, when Indian startups raised $2.36 billion, funding activity slowed down to around $877 million in July, $981 million in August and $787 million in September. The last two months, however, have recorded a gradual recovery, with total fundraising of $1 billion in October. Separately, data provided by market intelligence platform Tracxn showed that of the top 10 deals in 2022, nine had closed in the first half of the year.
Anand Lunia, founding partner of India-focussed seed-to-early-stage venture capital firm India Quotient, said: “November deals are the ones that were closed in July-August, and that’s when we also saw a lot of transactions coming our way happening.”
On why there is an uptick in funding activity now, Lunia said: “The reason is that the 2021 hangover was over in the minds of VCs in January-February. But the founders were mentally in 2021 till June or July this year. Their expectations of valuations remained in the same place.”
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