The number of active tech start-ups increased by 1,300 in the calendar year 2022 to 25,000-27,000, says the Nasscom's latest report ‘Rising above uncertainty: The 2022 saga of India tech start-ups’.

Despite the shift in public market valuations having a direct impact on the pace of unicorn development in India, and a slowdown in late-stage funding, the country still added the second-highest number of unicorns, after the U.S., thanks to an increased representation from B2B tech start-ups, the report said.

The number of uniquely funded tech start-ups increased by 1,400 to 5,500, with total equity investment raised in the calendar year surging by $18.2 billion to $73 billion. A total of 23 tech unicorns were added in CY22 alone, with the total number rising to 89, the top tech industry body said.

“The expanding pool of start-ups with resources available to gain market share and leadership also suggests that the years 2020 and 2021 were not an anomaly in terms of the number of start-ups becoming unicorns,” the report added.

The key trends and positive shifts post-COVID, including growth in seed-stage and early-stage investments, and strong investor commitment, continued to hold strong in 2022, said the report.

In terms of growth in seed-stage and early-stage investments, 66% of investments were raised by ‘non-unicorns’ and such investments grew 25-35% over 2021. There was around an 18% increase in the number of ‘unique start-ups’ funded.

In terms of investment, 18+ industry sectors raised more investments than the 4-year average (2019-2022) and the 2019 calendar year. There was a 1.6X increase in unique and active venture capital and private equity firms compared to 2021.

Around 12% of all tech start-ups are leveraging deep tech to build more complex and smart solutions across industries, the Nasscom report found. At 42%, 10-year CAGR, the deep-tech start-up pool is growing faster than the ecosystem pace. "More than 2.5X increase in investments in last 3 years for DeepTech Start-ups," said the report.

In CY22, India added the 2nd highest number of unicorns, only behind the US. There has also been a shift in the founder playbook, said the report, adding that 30% of unicorns and potential unicorns are "investing, acquiring or actively collaborating with other start-ups, similar to 2021 and up from 22% in 2020".

With a focus on improving business metrics, around 60% of unicorns and potential unicorns are actively hiring, and 25% of them expect to be EBITDA positive, the report found.

Giving a push to a thriving multifaceted ecosystem, 39% of tech startups incepted in 2022 are based in emerging hubs; and there has been a 2.4X increase in growth in investment deals in emerging hubs since 2019. Also, 18% of all tech start-ups and 20% of all unicorns have at least one woman founder, the report adds.

In its outlook, tech start-ups anticipate 2023 to be a turbulent year, with 51% of them saying it's difficult to assess when market valuation will reach the 2021 levels. Funded tech start-ups are more optimistic with a majority of them expecting valuations to reset in 6-18 months.

Funded start-ups, however, have better clarity in 2023 compared to unfunded start-ups, thanks to the availability of more resources, better visibility in the market, access to better talent, and an investor network.

"Having adapted to market shifts, the start-ups are looking at 2023 for growth, not just survival, with a dual focus on customers as well as investors. A significantly high percentage is focused on business expansion – including the addition of new revenue streams," the report added.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.