Despite reports of large scale layoffs to cut costs, domestic startups have raised more than $12 billion during the first four months of calendar year 2022, according to a recent report. Indian startups have raised $12.1 billion through 672 venture capital (VC) funding deals announced during January-April 2022, reveals GlobalData, a leading data and analytics company.
As per the report, this was the second-highest VC funding amount raised by any Asia-Pacific (APAC) country after China during the period under review. Chinese startups garnered $20.6 billion funding via 1,265 VC during January-April 2022.
India is a key global market for VC funding and ranks among the top five. The surge in VC funding was reported at a time when most of the key global markets such as the U.S., China, and the U.K. witnessed subdued VC funding activity in April compared to the previous month, says the report.
“India was a notable exception to witness a growth of 28.6% in funding value despite a decline in deals volume,” it adds.
Some of the notable VC funding deals announced in India during April include $805 million funding raised by Verse Innovation (Josh), $200 million by Tech4Billion Media (Chingari), $180 million by Roppen Transportation Services (Rapido), $135 million by crypto exchange platform CoinDCX, and $130 million by luxury home developer Isprava.
Aurojyoti Bose, lead analyst at GlobalData, says, “The growth becomes even more significant with news related to layoffs by several Indian startups doing the rounds with the likelihood of raising concerns for investors on success of startups. However, the trend suggests that investors continue to remain bullish on promising startups with good ideas as some of these were successful in raising sizeable capital.”
Meanwhile, in the first quarter of 2022, a total of 505 VC funding deals worth $9.2 billion were announced in India. The major funding deals include $700 million raised by Bundl Technologies (Swiggy), $450 million by Polygon Technology, $300 million by NTex Transportation Services (ElasticRun), $300 million by Busybees Logistics Solutions (Xpressbees), and around $250 million by Mogli Labs (Moglix, Moglilabs).
While the VC funding is going up, several Indian startups have announced large scale layoffs to cut their costs amid uncertainty about future business prospects in light of slower economic growth. Edtech unicorn Vedantu has laid off 424 employees, around 7% of its total workforce, on expectations of slower growth in the coming quarters. Used car marketplace CARS24, which is backed by global funds like SoftBank and Alpha Wave Global, has fired over 600 employees. The ed-tech startup Unacademy laid off 600 employees, including on-roll staff, contractual staff and educators in March-April. Among others, furniture startup Furlenco and e-commerce platform Meesho have also seen layoffs in recent weeks.