According to Tracxn’s India Tech 2022 annual report, capital raised in 2022 fell by 57% and 41% in the retail and fintech sectors respectively. Still, these two sectors remained the top funders throughout the year, alongside enterprise applications.
The report also noted a slowdown in investor exits this year as valuations realized during investor exits were curtailed. In 2022, 11 startups will make initial public offerings (IPOs) compared to his 16 last year.
This year’s top IPOs in this segment include logistics service provider Delhivery (May 2022), B2B digital payments platform AGS Transact Technologies, and Bangalore-based digital authentication platform eMudhra. The average IPO market cap of companies in this space will fall from $4 billion in 2021 to $517 million in 2022, with large consumer offerings such as One 97 Communications, PB Fintech, CarTrade Tech, Zomato and Nazara Technologies Internet company goes public.
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In terms of exits through acquisitions, activity remained broadly flat with 229 acquisitions in 2022 compared to 242 in 2021. However, this year’s average acquisition price has dropped from $224 million last year to $77.2 million for him.
Top 2022 acquisitions include Zomato’s acquisition of quick commerce company Blinkit, TransUnion’s acquisition of Fintellix, Thrasio’s acquisition of Lifelong Online, Razorpay’s acquisition of Ezetap, and Shiprocket’s acquisition of Pickrr.
Tracxn co-founder and CEO Neha Singh said a trend that has emerged over the past few years is that both new age and legacy companies in India are participating in startup M&A activity. said.
“M&A used to be mostly cross-border M&A. Pearson bought TutorVista, Walmart bought Flipkart, but now there are two new buckets emerging,” she told ET. rice field. “First, New Age companies in India are acquiring other companies. For example, Byju’s has made a series of acquisitions. We are acquiring companies and accelerating value creation for investors and the ecosystem.”
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Tracxn said the slowdown in overall funding was largely driven by poor late-stage funding. Late-stage funding will drop 45% to $16.1 billion in 2022, the company said.
“The number of unicorns created has definitely slowed down,” Singh said. “In India alone, her YTD decline is 47%, and internationally she is close to 60%. In terms of how long it takes a company to become a unicorn, the average from series A to unicorn is about Four years,” she said.
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ET reported on Monday that Indian startups had raised the most amount of money in a month since June, when a slowdown in fundraising became apparent in November and they began hitting the funding market. Technology investors were highlighting a slight increase in trading activity, but not a sustained recovery.
Looking ahead, Tracxn’s Singh said it could still be several quarters before the ecosystem hits bottom.
“One of the questions on everyone’s mind is whether we’ve hit bottom,” she said. “Looking at the data, it looked like we hit the bottom in the third quarter of the year and the fourth quarter didn’t get much worse. Investors in India are less pessimistic, but there is still talk of a recession globally and we will have to wait a few more quarters to see if we’ve hit the bottom.”
To survive the fundraising winter, startups are “taking unit economics more seriously,” Singh said. This is “illustrated by the string of mass layoffs that have occurred this year,” she said.
“While we are currently experiencing a recession, conditions are establishing a clearer and more sustainable path to growth for startups as investor metrics begin to value profitability over growth. I encourage you to do so,” added Singh.
