India Outpaced China by Creating Twice as Many Billion-Dollar Startups

India Outpaced China by Creating Twice as Many Billion-Dollar Startups-feature image
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Despite the slowdown of funding in the Indian startups, the country for the second consecutive time has overtaken China by creating 23 new unicorns in the year 2022. These are almost 2X more unicorns than China (11) and out of 23 new billion-dollar startups, 13 were created during the initial three months of the year.

Owing to the slow-down of the funding momentum, the total deal amount saw a drastic compression from $38.5 billion in 2021 to $25.7 billion in 2022, according to a recent report by IVCA and Bain & Co.’s.

Fintech and SaaS sectors got the most funding and in the sunrise sector, electric vehicles (EV) saw a 2.4x increase in funding facilitated due to regulatory support and an increase in activity in the EV sector in India.

Climate tech, spacetech, generative AI and agritech sectors also got early-stage funding. However, the consumer tech sector (e-commerce, D2C, food delivery, edtech etc.) witnessed a 55 percent decline in financial backing as investors were looking for more profitability and better unit economics.

“Investors are focusing on early-stage deals, and innovation in more emergent industries like health tech, gaming (e-sports, hyper-casual games), electronic vehicles (EV) and AI-led automation. Fintech and SaaS will remain significant in 2023.

While regulatory oversight might have a slight impact on Fintech, focus on the globalization of Indian Stack may open unexplored avenues,” Sriwatsan Krishnan – Partner at Bain & Company, said.

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