Premium| Listen to this article |
The first three months of the current year have been strong for the Indian startup ecosystem with 14 unicorns being created with an infusion of $ 10 billion across 334 funding deals. Also, robust momentum has been witnessed in the M&A transactions of the startup ecosystem.
A PwC India report cited by PTI, states that the creation of 14 more unicorns takes the overall tally of startups with over USD 1 billion valuations in the country to 84 now.
The UK-based professional services network company in its report highlighted this would be the third consecutive quarter ending March 31, 2022, where the fund inflows grossed more than $10 billion into the domestic start-ups' ecosystem in fresh funding.
Also, the first quarter of 2022 resulted in the creation of 14 unicorns with a total fund inflow of $10.8 billion. The SaaS sector accounted for the largest share in the total with the creation of five unicorns grossing more than $3.5 billion.
Amit Nawka, the startups' leader at the consultancy told PTI that despite uncertainties in the global economic environment, the domestic startups have continued to attract capital, particularly in the growth capital stage.
Further, Nawka said that as more startups mature, talks around corporate governance are now becoming mainstream and it will become increasingly important for the startups to design a corporate governance roadmap that is in sync with organizational growth aspirations.
Highlighting that the quantum of investments into the SaaS ecosystem recorded a threefold rise in the last three years, Nawka stated that the pandemic has only boosted this ecosystem globally, given the rising importance of remote working, productivity, and overall digital transformation.
Further, in Q1, around 80 M&A transactions also took place in the start-up ecosystem, boosted primarily by roll-up e-commerce companies. Firms like Curefoods, Mensa Brands, GlobalBees, and MyGlamm which have M&A as their core business strategy remained as the top acquires in the period under review. Meanwhile, companies like Upscalio and Evenflow are other roll-up e-commerce companies to join the bandwagon this quarter.
Notably, in the first quarter, about 38% of M&As were in the e-commerce and direct-to-consumer space, while 22% of the deals were seen in the SaaS space.
As per Nawka, in value terms, growth- and late-stage start-ups accounted for 89% of the funding in Q1, while representing 44% of the total deals in volume.
In Q1, the growth-stage funding was valued to $ 6.5-7 billion from January to March 2022, with an average ticket size of
$ 5570 million. As for early-stage funding, it registered around $761 million of inflows with the average size of $4 million - representing 55% of the volume.
Download the App to get 14 days of unlimited access to Mint Premium absolutely free!