In a recent update, India’s three biggest startup investors—Sequoia Capital, Tiger Global Management and SoftBank—have slashed deals by more than 80 percent as of date.
Horrors Of Funding Winter Affecting Startups
This is highlighting the horrors of the funding winter that has pushed startups to take a number of cost-cutting initiatives including thousands of layoffs.
Although SoftBank is yet to open its account, the other two have been part of only 11 deals in total so far this calendar year.
The number is much lower as it was close to 60 by the three (including SoftBank) in the same period of 2022, according to the data collated by Tracxn Technologies.
It seems, Sequoia Capital, which is a typically early-stage investor, was the most active among the three this year with 10 deals.
On the other hand, Tiger Global participated in only one deal.
At the same time SoftBank has not struck a single deal in India since July last year, as per the data.
During the same period of 2022, Sequoia Capital, Tiger Global and SoftBank had participated in 28, 28, and 3 deals, respectively.
So far, Sequoia has participated in deals amounting to $111 million in 2023 against $1.36 billion a year ago.
In the meantime, Tiger Global participated in just PhonePe’s $100-million deal against deals totalling to $2.47 billion in the year-ago period.
Similarly, SoftBank’s three deals last year amounted to $570 million.
The three investors have declined to comment on this subject so far.
India’s startup ecosystem, which is also the third-largest in the world, saw just 623 deals in 2023 overall against 1,501 deals in the year-ago period as per the data.
As of date, startups raised $8.84 billion across these 623 deals against a whopping $24 billion in the same period of 2022.
How Does This Affect The Indian Ecosystem?
The three investors, Sequoia Capital, Tiger Global Management and SoftBank have been the most prolific startup investors in India over the last 10 years.
In fact, these investors have been instrumental in producing unicorns and soonicorns (soon-to-be-unicorns) in the country.
On its part, Sequoia Capital has backed more than 30 of India’s 108 unicorns, while Tiger Global has invested in close to 40.
Similarly, SoftBank has backed 21 unicorns in the country.
Interestingly, Sequoia Capital India had raised its largest-ever fund worth $2.85 billion to invest in technology startups in India and Southeast Asia last year.
Although the company earmarked $2 billion for Indian startups.
But the venture capital firm has come under fire as some of its portfolio startups allegedly witnessed corporate governance lapses.
Similar to Sequoia, Tiger Global has been eyeing a new fund with a focus on Indian technology companies.
Besides this the hedge fund company has also been extremely bullish on India as its partners visiting the country at least four times in 2022 to explore potential investments.
