Start-up VC funding in India up 4.5% YoY in H1 2022; China sees slowdown: GlobalData

Indian start-ups appear to be the preferred choice for investors. At the same time, the Chinese start-up ecosystem seems to be losing steam, as shown by the latest report from the market intelligence and analytics firm, GlobalData.

The report added that India witnessed a whopping 39 per cent year-on-year growth in venture capital funding deal volume to 976 deals during H1 2022. The corresponding disclosed funding value also clocked a 4.5 per cent rise to $15.6 billion.  

Deal activity in 2022 has shown a fluctuating trend in the country. However, in the previous month funding value saw a massive growth of 76 per cent, reversing the month-on-month declining trend. Deal volume also saw an uptick of 0.7 per cent in June, as compared to May.

Aurojyoti Bose, Lead Analyst at GlobalData, said: “India witnessed a positive trend in both VC funding value and volume in H1 2022 compared to H1 2021 while several other key markets such as the US and China experienced decline. The Indian startup ecosystem seems to be evolving as a promising alternative to China.”

Some of the prominent deals announced in H1 2022 include the $805 million fundraise by Verse Innovation, $800 million Series F funding raised by Think and Learn (Byju’s), $700 million by Bundl Technologies (Swiggy), $450 million fundraising by Polygon, and $300 million fundraise by Xpressbees.

In China, 1,880 venture capital funding deals of $29.1 billion were announced in the first half of 2022. While this is the highest capital raised by any Asia-Pacific country, China’s VC deal volume decreased by 4.1 per cent year-on-year and funding value dropped 38.5 per cent, stated GlobalData.

China’s funding activity experienced a month-on-month improvement in June 2022 with an increase of 84 per cent in funding value and 17.8 per cent increase in deal volume, as compared to the previous month. “However, this growth was not enough to negate the sharp decline witnessed during some of the previous months and subsequently there was an overall YoY decline in H1 2022,” it added.

“Besides China, startups in several other key markets including the US are also currently facing funding crunch amid the volatile market conditions. For instance, VC fund raising by US-based startups was down by 21.7% YoY to $123.1 billion in H1 2022,” said Bose.

This dip has resulted in a slowdown in start-ups making it to the unicorn club in 2022, as compared to the previous year. Zero-Covid policy and crackdown on technology firms due to antitrust and security concerns have also led to the slowdown.

Bose added, “China is yet to see the announcement of any billion-dollar VC funding deal in 2022. However, it managed to see some deals valued more than $100 million.”

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