Bengaluru, Feb 16 (KNN) India continues to be the third largest tech startup ecosystem globally, adding 23 unicorns in 2022 calendar year, according to a report by Nasscom and Zinnov.

The report pointed out that in CY22, India added over 1,300 tech startups, taking the total tally of tech startups to 25,000-27,000.

“The potential pipeline of unicorns expanded to over 170, growing at a pace equivalent to 2021,” it said.

However, the Startup funding, at USD 18.2 billion, dropped 24 per cent in the year, compared to the year before. This was higher than the USD 13.1 billion in 2019.

As per reports, almost 1,400 unique startups received funding last year, 18 per cent higher than in 2021. For around 47 per cent of these startups, it was their first round of funding.

Despite the slowdown, the seed and early-stage investments in 2022 was higher than in any year since 2019. The study reveals that both early-stage and seed-stage investments grew between 25 to 35 per cent over 2021.

Last year, tech startups in the seed-stage secured 1,018 investments. Late-stage investments bore the brunt with a decline of 41 per cent in deal sizes greater than USD 100 million. This was due to considerable correction in the global public markets, particularly in technology stocks that saw a significant drop in valuation. Interestingly, non-unicorns received 66 per cent of the total investments in 2022.

Pari Natarajan, CEO, Zinnov, said, “In the face of market headwinds, a long funding cycle, and reduced valuations, Indian tech startups held strong in 2022.In fact, Indian tech startups are moving back to the fundamentals of technology with many deep-tech startups emerging, that are new to India, new to the world.”

Nasscom and Zinnov also conducted a survey with over 100 startup founders at various funding stages and industry sectors. The findings reveal that access to quality talent, low customer uptake, and cash flow crunch were amongst the primary challenges that founders faced last year.

Business expansion along with fundraising are amongst the top priorities for funded startups this year. Around 44 per cent of the surveyed founders place business expansion as their immediate business priority over the next 6-12 months.  (KNN Bureau)