China saw the steepest fall in funding activity among global peers in 2022

The funding to businesses in China saw the steepest fall among global peers, more than halving in 2022 as compared to 2021, according to market data platform Trancxn. The data released on Wednesday showed that from $98.3 billion in 2021, it fell to $44.6 billion in 2022. It was even below the pre-pandemic level of $59.4 billion. India had the second-highest fall in funding in 2022.

The total funding in India saw a fall of 33 per cent from $53.7 billion in 2021 to $35.6 billion in 2022. It was, however, up 56 per cent from 2019’s total funding of $22.8 billion.

The USA saw the third-highest fall in funding. Between 2021 and 2022, it was down 28.8 per cent from $354.6 billion to $254.7 billion.

23 new unicorns in 2022

The data further showed that 23 Indian companies achieved unicorn status in 2022. In 2021, the country saw the emergence of 44 unicorns.

A unicorn is a company with a valuation of over $1 billion. 13 companies out of the 23 were profitable at the end of 2022. The top five with the highest profits were Molbio Diagnostics, PhysicsWallah, Oxyzo, Amagi and CoinSwitch.

The largest chunk of the funding went to the consumer sector firms. Out of the total, around 33 per cent or $11 billion, was given to these firms. Enterprise applications firms and fintech companies followed it.

With a valuation of over $2.5 billion, the online gaming platform Games24*7 was the highest-valued unicorn among the new ones. It was followed by cloud-based solutions provider Uniphore at $2.5 billion and diagnostics tests provider Molbio.

In a recent report, consultancy firm PwC India said that the funding situation might return to normal after two to three quarters.

“With significant dry powder waiting to be invested, it seems likely that the funding scenario will begin to normalise after 2-3 quarters,” said Amit Nawka, partner of deals and India startups leader at PwC India.

He added, “Many startups are using this time to tighten operating models and optimise their cash runway by deferring discretionary spends and investments.”