CHART OF THE WEEK 📈
Rising global interest rates, geopolitical tensions, and the hit taken by the public markets have begun to weigh on Indian startups and the private markets. In the latest quarter, VC funding in India fell by around 36% QoQ.
Venture capital funds have shifted focus from money burning late-stage startups to investing in early-stage startups. Early stage investing has actually seen a boom with seed stage funding increasing 60% YoY.
There have also been stark changes in sector preferences. Fintechs have managed to keep the pace on even as the overall funding quantum has declined.
With funding drying up at an alarming rate, Indian startups must find a way to extend their runways by reducing cash burn, and focusing on monetisation.
Over 11,000 people have been laid off by Indian startups in the last six months, as the flow of capital is expected to remain dry for the next 18-24 months. Experts predict that 60,000 startup employees will lose their jobs this year, which could worsen the situation in the near future.