Bain Digest India Venture Capital Report 2023

India Venture Capital Report 2023
Winds of winter:
2022 signalled a recalibration for the ecosystem
after record capital influx over the last few years.
Authors and acknowledgments
Arpan Sheth is a partner in Bain & Company’s Mumbai office. He leads the firm’s Asia-Pacific
Technology, Vector, and Advanced Analytics practices, as well as the India Private Equity and
Alternative Investors practice.
Sriwatsan Krishnan is a partner in Bain & Company’s Mumbai office. He co-leads the India Private
Equity and Alternative Investors practice.
Sai Deo is a partner in Bain & Company’s Bengaluru office. She is a leader in the India Private Equity
and Alternative Investors and Digital Insurgent practices.
Amanpreet Talwar is a senior manager in Bain & Company’s Bengaluru office. She focuses on the
India Private Equity and Alternative Investors and Digital Insurgent practices.
We deeply thank the Bain India team, including Apurva Shah, Tanvee Mall, Shubham Khemka,
Shubham Gupta, Anshika Chaudhary, and the Bain Capability Network team for their in-depth
research and analytical rigour. We also wish to thank Shelza Khan and Kelly Rickard for their
editorial support.
Key Contacts
Arpan Sheth (arpan.sheth@bain.com)
Sriwatsan Krishnan (sriwatsan.k@bain.com)
Sai Deo (sai.deo@bain.com)
Amanpreet Talwar (amanpreet.talwar@bain.com)
For media queries:
Sitara Achreja (sitara.achreja@bain.com)
This work is based on secondary market research, analysis of financial information available or provided to Bain & Company and a range of
interviews with industry participants. Bain & Company has not independently verified any such information provided or available to Bain and
makes no representation or warranty, express or implied, that such information is accurate or complete. Projected market and financial information,
analyses and conclusions contained herein are based on the information described above and on Bain & Company’s judgment, and should not be
construed as definitive forecasts or guarantees of future performance or results. The information and analysis herein does not constitute advice of
any kind, is not intended to be used for investment purposes, and neither Bain & Company nor any of its subsidiaries or their respective officers,
directors, shareholders, employees or agents accept any responsibility or liability with respect to the use of or reliance on any information or
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or reprinted in whole or in part without the explicit written permission of Bain & Company.
Copyright © 2023 Bain & Company, Inc. All rights reserved.

Contents
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
India VC deals landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Key investment themes in 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investor base and fund-raising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Perspectives on exits landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Key shifts in the start-up ecosystem over 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2023+ look ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1
Executive summary
2022 signalled a recalibration for venture capital (VC) investments globally after a record capital
influx over the last few years. Increasing macroeconomic uncertainty and recessionary fears
drove caution in investing momentum globally, headlined by a few key triggers: (a) post-pandemic
tightening of monetary policy as central banks pulled the plug on access to cheap capital (more than
2.5 percentage points [pps] interest rate hikes across the US, UK, and Europe during 2022);
(b) intensifying geopolitical tensions (e.g., Russia-Ukraine conflict, US-China decoupling); (c) trade
sanctions by US and Europe, leading to global supply chain shocks; and (d) surfacing of irregularities
in corporate governance across the tech ecosystem globally.
Funding momentum in India similarly softened in line with the global slowdown as total deal value
saw a compression from $38.5 billion to $25.7 billion from 2021 to 2022. However, India continued to
demonstrate resilience to global headwinds as structural enablers drove a positive economic out-
look (i.e., large consumption potential, inclusive growth led by scale digital adoption of the
decentralised “India Stack,” effective fiscal and monetary policy discipline limiting inflationary
growth, and tailwinds from economic activity shifting away from China). Deeper analysis of the
underlying metrics, as indicated below, reflects a more nuanced picture:
Decline in funding mostly took place over the second half of 2022 as global macro headwinds
intensified over the year—in fact, investments grew 1.4x over the first half of 2021–2022 but saw
a 70% decline in the second half of 2022 compared to the second half of 2021.
Within Asia-Pacific, the share of India-focused VC investments reached 20% for the first time,
and India continued to account for ~5% of global VC funding in line with 2021.
For the second time in a row, the number of unicorns added in India (23) outpaced China (11),
and India marked the addition of its 100th unicorn (Open Technologies) in May 2022.
“While macroeconomic factors drove the slowdown in funding

globally, India continues to be attractive for investors globally
given strong fundamentals. Low leverage, tech adoption, and
favorable demographics create a long runway for growth. We see
limited impact, especially in early-stage rounds, and continue to
invest across sectors.”
Elevation Capital
2
Despite the drop in Indian VC funding to $25.7 billion (0.7x of 2021 funding), deal volume saw marginal
1.1x growth, reaching 1,611 deals led by an expansion in seed to series B deals. Further, series A deals
maintained an average deal size of ~$11 million, cementing a step shift in early-stage dealmaking
in India (average series A deals hit the coveted $10 million mark for the first time in 2021). The decline
was driven primarily by average deal size compression from $25 million to $16 million over 2021–2022.
A significant drop in $100 million+ “megarounds” (from 92 to 48 over 2021–2022) was a key factor in
deal size compression, with global investors exercising caution on large-ticket size deals. Further,
venture funding continued to see democratisation, with emerging hubs beyond Bengaluru, Mumbai,
and the NCR (National Capital Region) receiving ~18% of the funding and accounting for 9 of 23
unicorns added in 2022.
“Through our investments in Citymall and Apnamart, we have seen

disruption in large $100B categories in Tier 2+. The urban-rural
digital divide will continue to converge, creating opportunities for
start-ups. We are bullish on the potential of “Bharat”, or Tier 2+
India, and the next decade of start-ups serving its needs efficiently
and profitably.”
Accel
Software-as-a-service (SaaS) and fintech continued to see momentum relative to 2021, growing in
salience from ~25% to ~35% of total funding in 2022. Consumer tech, however, saw a 55% drop, from
more than $20 billion in 2021 to less than $10 billion in 2022. Several investment themes emerged
in 2022:
• Moderation in consumer tech deal momentum was reflected across segments such as edtech,
online food delivery, B2C commerce, and D2C brands. Given typically higher cash-burn business
models in consumer tech, investors remained cautious about large deals in 2022.
• In contrast, SaaS saw steady deal momentum over an expansive base from 2021, led by
increasing asset depth, proven revenue growth, EBITDA-positive business models, and an
emerging base of second-generation founders focused on building category-defining solutions.
• Despite regulatory headwinds and global compression in fintech funding, Indian fintech
sustained momentum—driven by several scale deals focused on lending and fintech infra
players (four unicorns) in the first half of 2022. The second half of 2022 saw consistent deal
volume via early-stage deals across emerging segments—insurtech, embedded lending, and
wealthtech.
• Finally, green shoots were visible across emergent sectors: electric vehicle (EV), agritech,
and deep tech (space tech, generative AI and climate/clean tech) saw significant interest.
3
The investor base consequently saw a few critical shifts over 2022. Concentration of investments by
large investors decreased to less than 20% from ~25% in 2021 as investment activity by global hedge
funds and crossover funds slowed down. While most leading VCs saw a compression in the deal
activity, salience of early-stage investments by these funds within respective portfolios increased
(e.g., more than 80% of deals for top funds, including Sequoia, Accel, and Lightspeed, were early-stage
in 2022). Private equity (PE) firms continued to demonstrate interest in select growth equity deals—
marquee deals include Dailyhunt (CPPIB), ElasticRun (Goldman Sachs), and Amagi (General Atlantic).
In an increasing validation of the maturity of the Indian start-up ecosystem, micro VCs grew in
presence: the base of active micro VC funds grew to more than 80; several launched larger funds
(e.g., the $55 million Artha Select Fund, maiden micro VC fund by Artha Capital, and the $25 million
Auxano Fund); and thematic micro VCs also increased in presence (e.g., SaaS [Pentathlon] and gaming
[Lumikai]). Lastly, family offices, corporate VCs, and first-time funds remained active over 2022,
participating in more than 300 deals, in line with 2021.
“Micro VCs fill a critical gap between the slightly unorganised

angel ecosystem and the early-stage VC market. They are small,
nimble, and focused teams that help many more founders get
their nascent ventures off the ground before they are ready for
a full seed round. Early-stage VCs, such as us, love collaborating
with micro VCs.”
Prime Venture Partners
Further, despite the caution in capital deployment, 2022 saw record fund-raising and, in many
cases, investors raised their largest ever India-focused funds. Several Tier 1 investors raised new
India-focused funds (e.g., Sequoia’s $2 billion India Fund VIII and Lightspeed India’s $500 million
India/Southeast Asia-dedicated fund). Similarly, prominent domestic VCs and smaller funds saw
significant fund-raising over 2022 (e.g., Fireside Ventures Fund III—$225 million; Blume Ventures
Fund IV—$250 million; and Artha Select—$55 million micro VC fund). Despite dry powder build-up,
capital deployment will likely remain cautious as general partners (GPs) scout for quality assets and,
in a few cases, await correction in valuation expectations while limited partners (LPs) also remain
cautious about commitments as realisations from prior deployments may have slowed down.
4
A dramatic decline in exits with VC participation was witnessed in 2022, relative to 2021, declining
from $14 billion (including the now-cancelled BillDesk exit) to less than $4 billion in total exit value.
Secondary transactions accounted for a material share of exits (47%), but overall value dropped as
large anchor exit deals declined (only 11 secondary exits greater than $50 million in 2022 compared
to 19 in 2021). While the share of public market exits also remained salient (40%), the mix shifted
from initial public offering (IPO)-driven exits to trades—specifically exits by anchor VC funds as
lock-ins on tech IPOs expired. At least six IPOs saw VC exits in 2022, including Five Star Business
Finance (Sequoia, Matrix), Delhivery (SoftBank), Tracxn (Sequoia, Accel, Elevation), but total
IPO-driven exit value remained muted relative to 2021. Further, with 2022 witnessing a global tech
stock rout, several tech-first players deferred potential IPO plans, affecting overall exit value.
The broader start-up ecosystem in India witnessed several fundamental shifts in 2022 that are likely
to have a bearing on the landscape in the near to medium term:
• Investors: Investors pivoted from “growth at all costs” to “sustainable unit economics”; most
raised large funds, leading to a dry powder build-up; and leveraging of venture debt as an alter-
native funding option became viable.
• Regulators: Tightening regulatory guidelines affected fintech (ban on prepaid instrument [PPI]-
based credit and new digital lending norms) and cryptocurrency (tax on virtual digital assets
[VDA]) the most, but macro regulations broadly continued to act as enablers in the ecosystem—
through production-linked incentives (PLI), a framework on tech listings by Securities and
Exchange Board of India (SEBI), and an ongoing focus on building public digital rails (e.g., Open
Network for Digital Commerce [ONDC] launch).
• Start-ups: 2022 was a turbulent year for start-ups, with more than 20,000 layoffs, several distress
mergers and acquisitions (M&A), corporate governance issues, and more than 10 deferred IPOs,
but a few bright spots remained, including the growing salience of new emerging hubs and
increased diversity in leadership positions within start-ups.
5
“For the start-up ecosystem, 2022 will be remembered as the

year when quality of business became imperative and the
growth-at-all-costs mantra went out of fashion quickly. At the
early stage, the definitions of PMF became stricter; for larger
companies, generating profits became a priority. We believe this
is healthy for the ecosystem and will ultimately lead to the
creation of robust businesses that can stand the test of time. We
continue to believe that there are secular tailwinds across the
ecosystem (e.g., low data costs, digital infra as public goods,
aspirational consumers, a more formal economy, world-class
software companies, dry powder) that make this an excellent
time to start a business in India.”
Stellaris Venture Partners
Cautious optimism across stakeholders may be seen in 2023: While global macro headwinds are
likely to continue to affect India, shifts across the ecosystem indicate that a more resilient ecosystem
will emerge. Investors are expected to double down on early-stage dealmaking and innovation in
emergent spaces such as gaming (hyper-casual games, e-sports), healthtech, and EV, and AI-led use
cases are likely to see interest. SaaS and fintech will remain significant—while regulatory over-
sight may have some effect on fintech, focus on globalisation of the India Stack (e.g., cross-border
Unified Payments Interface [UPI], identity, cross-border commerce) is likely to open up new ave-
nues. Participation from a wider investor base (e.g., micro VCs, family offices, global funds foraying
into India) is likely to sustain. Scale start-ups will remain laser-focused on unit economics. Some
M&A-driven consolidation and potentially flat or down rounds may be in the offing as investors
revaluate assets in their portfolios.
In the longer term, global investors are likely to remain positive about the India Story—solid
macro-fundamentals, a large consumption opportunity, a sizeable workforce entering the formal
economy, a digitally enabled population, and a deepening innovation ecosystem will remain key
foundational drivers underlying India’s promise in the next decade.
6
“India is one of the most dynamic markets in the world for

early-stage investments. India has a strong economy which will
continue to expand. Even if the quantum of deals is not as high
as in previous years, the best quality founders continue to raise
funds. We believe this is a great time to do business with such
founders.”
Lightspeed
7
Figure 1: 2022 was a year of recalibration with significant shifts across the start-up and VC
ecosystem in India
India VC Sustained deal 23 unicorns— Share of non-top SaaS and fintech A defining year
investments volume led by 48 “megadeals” India outpaced 3 metros in retained pace; for EV with
declined to early-stage —0.5x drop China for a funding grew consumer 2.4x growth
$25.7B investments from 2021 second time to 18% in 2022 tech declined in funding
In line with global While deal volume 48 “megadeals” 23 unicorns added Growing investor SaaS (1x) and Confluence
VC slowdown, saw a marginal ($100M+), most by India in 2022 activity outside of fintech (0.9x) of regulatory
India deal flow expansion (1.1x) of which (85%+) relative to 11 in top 3 metros maintained deal tailwinds (PLI
declined 33% to 1,600+ deals— closed in H1 2022; China—Open (BLR, MUM, value relative to schemes,
from $38.5B to in a step shift, further, this was a Technologies NCR) as share in 2021; consumer China +1),
$25.7B over 90% of those were material 50% drop became the 100th VC investments in tech saw a growing activity
2021–22; early-stage (seed relative to 92 unicorn overall other cities grew material decline across the EV
compression was to series B) deals; megadeals in 2021 in India to 18%—further 9 to <$10B from value chain
driven largely by average deal size (of 23) unicorns $20B+ over (battery, OEM
caution over H2 reduced to $16M emerged from 2021–22 as components,
2022 (H1 2022 from $25M over outside of the top pressure on viable sales and service,
saw a 1.4x jump 2021–22 3 metros in 2022 unit economics mobility, charging
in funding over mounted infrastructure)
H1 2021) drove investor
interest
Significant dry Exit momentum Regulatory Rough waters

Global hedge powder build-up declined as 10+ headwinds for start-ups—
funds/crossover Active micro VC led by record Growing impetus companies despite structural layoffs, issues
activity declined base grew to 80+ fund-raising for venture debt deferred IPOs enablers in governance
Share of Several micro Leading investors Venture debt 10+ tech-first Fintech and crypto 2022 was a
investments by VCs raised $20M+ announced their scaled to 0.03x of companies bore the brunt of turbulent year for
leading investors funds, with the largest ever India- VC equity funding deferred IPO regulatory shifts most start-ups—
reduced to <20% active investing focused funds as —increasingly plans given global (e.g., new PPI and 20K+ layoffs
(vs. 25%+ in base growing to LP commitments attractive to public market digital lending across the
2021) as global 80+; thematic from 2021 were founders as volatility and tepid norms, NUE delay, ecosystem, sharp
hedge funds and micro VCs grew closed—despite non-dilutive performance of taxation of virtual pivot from “growth
crossover funds in presence—e.g., dry powder funding or bridge public listings of digital assets)— at all costs” to
exercised caution SaaS-focused build-up, LPs will financing option in tech companies however, structural “measured growth
in H2 2022 (Pentathlon), continue to seek a volatile macro broadly (globally digital enablers at profitable
gaming-focused caution from GPs environment and in India) continue to propel margins” and
(Lumikai) on pace of innovation surfacing
deployment corporate
governance
issues
Source: Bain & Company
8
India VC deals landscape
2022 was a year of recalibration as VC funding momentum slowed down globally and in India.
India investments saw a 33% compression from $38.5 billion to $25.7 billion over 2021–2022.
Caution in investing momentum globally was driven by broader macroeconomic uncertainty

and recessionary fears—tightening of monetary policies by central banks after an extended rate
moratorium and Covid-19 stimulus led capital influx, geopolitical uncertainty disrupting food
and energy supply chains, growing inflation across economies, trade sanctions by US and
Europe exacerbating the supply-demand rift, and surfacing of corporate governance issues
across VC funded companies. While these headwinds had an influence on funding in India, the
broader economic outlook remained relatively resilient and continued to be supported by a few
structural drivers:
• Large consumption opportunity: Sizeable middle class with large working-age

population, services-driven economy, expanding manufacturing base.
• Inclusive economic growth led by scale adoption of digital rails: For example, UPI
for payments, ONDC for e-commerce, electronic health records further enabled by cheap
access to data creating a material digital enabled population base.
• Fiscal and monetary discipline: Judicious fiscal stimulus during the pandemic, efficient
commodity sourcing given global price volatility keeping inflation in check.
• “China + 1” tailwinds: Incentives boosting manufacturing and tailwinds from global supply
chain diversification leading to new economic avenues.
Decline in investments reflected a few key trends:
• Significant share of slowdown driven by investments in the second half of 2022 as global
macro headwinds intensified and drove investor caution.
• While average deal size saw a compression from $25 million to $16 million, deal volume saw
a marginal expansion (further indicating significant early-stage activity).
• India’s share in Asia-Pacific VC reached ~20%, growing from ~17% in 2021 as investments in
Asia-Pacific declined faster than in India in 2022.
9
• The shape of deal flow shifted significantly: Megarounds reduced from 92 in 2021 to 48 in
2022—with only 10 scale rounds of $250 million+ (all in the first half of 2022) as investors
pressed pause on large deals. Conversely, early-stage deals (seed to series B) were more
resilient and saw a ~1.2x growth in volume relative to 2021. Series B deals maintained average
deal size of ~$27 million, in line with the 2021 benchmark.
• Growing maturity of the ecosystem was further evident in increasing share of investment in
cities outside of the top three metros (Mumbai, Bengaluru, and the NCR) to 18%. In 2022, 9 of
23 unicorns were from these cities, a solid indication of democratisation of funding across
the country.
• While the number of unicorns created shrank from 44 to 23 over 2021–22, India added more
unicorns than China, 23 and 11 respectively, for the second year in a row. Also in 2022, India
became only the third country globally to have created 100+ unicorns—Open Technologies
became the 100th unicorn in May.
Figure 2: 2022 was a year of recalibration as the global VC landscape witnessed a drop from record
highs in 2021—funding momentum in India also faced headwinds
Overview of global VC investments ($B)
0.7x
India investments
691 overview
501 India VC activity softened significantly

—in line with the global slowdown,
0.7x investments dropped to 0.7x
of 2021 levels
0.6x 334
Drop in funding largely driven by
significant compression in H2 2022—
242
223 0.6x investments grew 1.4x over H1 2021–22;
H2 2022 saw a 70% decline over
129 0.8x 0.7x H1 2022
106
68
37 38 India’s share in Asia-Pacific VC
28 26
investments reached ~20% for the
first time—India’s share in Asia-Pacific
2021 2022 2021 2022 2021 2022 2022 2021 2021 2022 2021 2022 grew from ~17% in 2021; globally, India
Global Asia- US UK China India continued to account for ~5%, in line with
Pacific
2021 levels
Notes: PE-VC investment figures include real estate and infrastructure deals; Investment value and volume excludes undisclosed deal value transactions
(e.g., PharmEasy, Policybazaar, Qure.ai)
Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge
10
Figure 3: Globally, increasing macroeconomic uncertainty and recessionary fears drove caution in
investing momentum
1
Tightening 2022 saw central banks pull the plug on access to cheap capital in the
monetary fastest-ever interest rate hikes—e.g., 4.25 pps rate hike by the US Fed,
policy 2.5 pps by ECB, and 3.5 pps by BoE over Jan–Dec 2022, leading to 9.1%
tightening liquidity after an extended rate moratorium and Covid-19 stimulus
led to capital influx across markets US CPI inflation as
of June 2022, highest
in 40 years
2
Uncertain Growing geopolitical uncertainty, headlined by the Russia-Ukraine
geopolitical
environment
conflict and US-China decoupling (economically and militarily), drove
investor caution as significant disruption across food/energy supply chains
2.9%
led to inflationary pressures on retail consumption baskets globally Global GDP growth
over 2022 relative to
6%+ in 2021; further
3
Global supply Continued Covid-19-induced disruptions (especially in China) and muted forecast
chain shocks trade sanctions by US/Europe restricting access to high-end (1.7%) for 2023
semiconductors exacerbated recessionary fears—business operations
already burdened by the pandemic saw further strain, leading to gaps in
manufacturing/demand fulfilment 40%
Decline in NYSE
FANG+ index over
4
Corporate Lax corporate governance in a few VC-funded companies over the
governance pandemic saw a comeuppance—as irregularities surfaced (e.g., collapse 2022 as valuations
challenges of crypto exchanges), investors tempered the speed of funding of listed tech
companies hit reset
Notes: BoE—Bank of England; ECB—European Central Bank; Fed—Federal Reserve; FANG+ index reported based on 10 listed tech companies (Amazon, Apple,
Facebook [Meta], Microsoft, Netflix, Google [Alphabet], Tesla, NVIDIA, Alibaba, Baidu); CPI—consumer price index
Sources: Bain & Company; World Bank; Bloomberg; Financial Times
Figure 4: However, India demonstrated significant resilience to global headwinds as structural

enablers continue to lend a positive economic outlook
Large Digital accelerators: Fiscal and monetary “China + 1”

consumption headroom the “India Stack” policy discipline tailwinds
Growing domestic consumption Inclusive growth led by scale Effective monetary and fiscal Growing economic activity led
supported by a services-driven adoption of decentralised policy enabling control over by global shift away from
economy, expanding public digital infrastructure inflationary growth—judicious China—escalating US-China
manufacturing base, large share rails, i.e., “India Stack”—e.g., economic stimulus over the trade tensions driving interest in
of productive working age UPI for payments, ONDC for pandemic, efficient commodity India as global firms look to
population (~900M), reinforced by commerce, OCEN for credit, sourcing despite price volatility diversify supply chain exposure;
an expanding middle-income Aayushman Bharat for health, globally, sufficient foreign favourable policies such as
population base (largest globally coupled with cheap access to exchange reserves have enabled corporate tax cuts, PLIs further
today at ~370M) data, continuing to drive digital consistent GDP growth while accelerating momentum in
innovation maintaining inflation within categories such as electronics,
the hurdle rate textiles, pharma
Positive bellwethers
GDP growth over 2022*; one of the fastest CPI by Dec 2022; within RBI hurdle rate of 6%
6.9% growing globally
<6% (used to define ceiling for high inflation)
Stable ~4% growth for Sensex vs. ~19% decline in the
5th Largest economy globally; overtaking UK in 2022 public markets S&P over 2022
Notes: *FY23 (April to March 2023) growth over FY22 (April to March 2022); Working age population between ages 15–64; Middle class population is the number
of households with income 75%–125% of median income times average household size; UPI—Unified Payments Interface is an instant real-time payments
system developed by National Payments Corporation of India; OCEN—Open Credit Enablement Network; RBI—Reserve Bank of India
Sources: Bain & Company; Morgan Stanley report
11
Figure 5a: India VC deal flow dampened to $25.7B from $38.5B over 2021–22; despite year-over-year
compression, deal flow remains material relative to pre-Covid-19 era
Annual VC investments in India ($B) Number of deals
Maturing market Growing optimism Covid-19 inflection Recalibration
$70B 2,000
1,545 1,611
60
50 3.8x 0.7x 1,500
38.5
40 987
854 809 1,000
30 684 756 25.7
593 589 571
20 458
11.1 10.0 500
10 4.6 6.3 4.8 4.7 6.6
3.1 2.9
0 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Average deal
6.7 4.9 6.8 6.4 5.6 8.1 11.5 14.7 12.4 24.9 16.0
size ($M)
Rapidly evolving start-up environment; increasingly positive investor Marquee exits renew Post early caution Recalibration
sentiment on expansion and scaling of first-generation start-ups in India investor confidence due to Covid-19, as investors
reinvigorated weigh impact
Rapid scale-up of global hedge funds (e.g., Tiger Global and SoftBank) and Emergent sectors confidence leading to of macro-
global VCs setting up significant domestic presence in India demonstrating traction record investments in headwinds—
pique investor interest 2021—deepening receding of
Some caution towards the latter half (2016–17) led by lack of visibility on —i.e., fintech, SaaS ecosystem and global
exits for capital deployed over first half of the decade marquee exits crossovers;
compression
of valuation
multiples
Figure 5b: A deeper look indicates slowing momentum H2 2022 onwards—both deal volume and
average deal sizes dropped significantly in H2 2022 vs. H1 2022
Annual VC investments in India ($B, split by quarter)
Q1 Q2 Q3 Q4
5.0x 0.2x Investments
overview
2.4x
14.1
3.6x 0.3x
12.4 Sustained momentum
7.8x 0.9x 11.0 over Q1 2022 led by
overhang from 2021—
8.3 despite early headwinds
1.6x 7.1 becoming visible (e.g.,
rising interest rates,
5.1 geopolitical tensions)
3.1 2.8 2.9 3.0 3.3
Increasing investor
1.1
caution evident over
H2 2022—lower number
2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 of deals vs. 2021 and
Annual deal compressed deal sizes
12.9 14.5 22.1 7.3 24.6 15.8 13.7 35.5 8.9 14.4 24.2 12.2
size ($M) indicative of a material
Number clampdown on larger
245 356 563 147 338 448 206 396 330 211 455 270
of deals ticket size deals
12
Figure 6a: Decline in investments led by sizeable compression in average deal size—however,
sustained momentum in deal flow relative to 2021
Annual VC investments in India ($B)
3.8x 0.7x
14.4 38.5 1.7 -14.5
14.0 1 25.7
10.0
2
2020 Share of growth Share of growth 2021 Share of growth Share of drop 2022
led by deal volume led by deal size led by deal volume led by deal size
Number of deals 809 1.9x 1,545 1.1x 1,611
Average deal value $12.4M 2.0x $24.9M 0.6x $16.0M
1 Sustained deal flow led by early-stage activity 2 Drop in average deal size as megarounds declined
Continued momentum on investment activity, early-stage deals drove Decline in average deal sizes driven by a substantive shift in shape
bulk of volume—90%+ of deals in 2022 were across seed to series of deal flow as investors exercised caution on large growth or late-
B stages (relative to <85% in 2021) stage deals—megarounds ($100M+) dropped by half from a high
in 2021 (from 92 to 48)
Figure 6b: Further, both deal volumes and average deal sizes remained significantly higher relative
to pre-Covid-19 investment activity, led largely by deals in H1 2022
Number of VC deals in India Average VC deal size in India (in $M)
Growing Covid-19 Recali- Growing Covid-19 Recali-

Maturing market optimism inflection bration Maturing market optimism inflection bration
1,611 24.9
1,545
16.0
987 14.7
854
809 12.4
756 11.5
687 684
593 589 571
8.0 8.1
458 6.7 6.8 6.4
5.6
4.9
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Average number of VC deals (2012–22) Average VC deal size in $M (2012–22)
13
Figure 7a: Momentum in deal volume led by expansion in smaller-ticket-size deals; $100M+ “mega-
rounds” saw a material drop over 2021–22
Number of VC deals in India

(split by size of deal)
Growth over
2021–22
48 Megarounds of $100M+
1,611 dropped by half in volume
1,545 0.5x —85% of these rounds
92 62 1.3x closed in H1 2022 before
48
326 1.2x broader macro headwinds
270 had a demonstrable effect
20 on pace of capital
22 24 deployment
20
3 8 809
12 756
17 Deal activity within
128
589 571 171 small-to-medium-size
1,135 1,175 1.1x
89 deals (<$50M) saw healthy
136
growth over an already
637
485 543 expansive 2021 base,
410
indicating steady
early-stage momentum
2017 2018 2019 2020 2021 2022
Small ticket size (<$10M) Medium ticket size ($10M–$50M)
Medium-large ticket size ($50M–$100M) Large ticket size ($100M+)
Note: Ticket size indicates total investment value in respective rounds/deals (inclusive of all investors)
Figure 7b: Within megarounds, 2022 saw 10 scale rounds of $250M+—all of which closed in H1 2022
VC investments in India Overview of large-ticket-size deals with $250M+ funding in 2022

($B, split by size of deal)
Number Avg. deal Asset Lead investors Sector Quarter Deal value Valuation^
of deals value ($M) Dailyhunt* CPPIB Content and social media Q2 $805M $5.0B
25.7 1,611 16.0 (total $833M)
10 412.0 BYJU’s* BYJU’s (re-investment), Edtech Q1 $800M $22.0B
(16%)
Substantially lower number Sumeru Ventures (total $1.1B)
of scale investments in
Swiggy Invesco Food delivery Q1 $700M $10.7B
2022; 33 deals were
(23%) $250M+ in 2021
38 159.1 Polygon Sequoia Capital, SoftBank, Web3/crypto Q1 $450M $20.0B
Tiger Global
(18%) 62 74.7 Uniphore New Enterprise Associates SaaS Q1 $400M $2.5B
ElasticRun SoftBank Shipping and logistics Q1 $332M $1.5B

(29%) 326 22.9
Delhivery Fidelity, GIC Shipping and logistics Q2 $304M –**
(14%) 1,175 3.1 XpressBees* TPG Growth, ChrysCapital, Shipping and logistics Q1 $300M $1.2B
Blackstone (total $325M)
Scale ticket size ($250M+) Stashfin Abstract Ventures, Fintech Q2 $270M $0.8B
Large ticket size ($100M–$250M) Uncorrelated Ventures
Medium-large ticket size ($50M–$100M) Flipkart Tencent B2C e-commerce Q2 $264M $37.6B
Medium ticket size ($10M–$50M)
Small ticket size (<$10M) $400M+ deals $250M–$400M deals
Notes: ^Indicates latest valuation published for the year 2022; Only lead investors mentioned—list is not exhaustive; *Indicates firms that saw multiple rounds in
2022, with total investments in 2022 mentioned in parentheses; **Indicates public company
14
Figure 7c: Early-stage (seed through series B) deals were more resilient, with healthy growth of
material base from 2021, indicating a step shift in the ecosystem
Number of deals Volume growth

(Average VC deal value in India) over 2021–22
2021 2022
Continued activity in
940 970 early stage led by
Seed ~1.1x several factors (e.g.,
(~$1.8M) (~$1.6M)
second-generation
founders; nuanced
India-specific
285 336
Series A ~1.2x innovation); limited
(~$10M) (~$11M) trickle-down of global
public tech stock rout
on early-stage deals
90 156
Series B ~1.7x
(~$26M) (~$27M)
Mid-stage deals
85 56 concentrated in H1
Series C ~0.7x
(~$52M) (~$49M) 2022, with ~80% of
the deals closing
before the impact of
145 93 macro headwinds
Series D+ ~0.6x trickled down to
(~$174M) (~$140M)
investment activity
Note: Series D+ includes series D to series K

Sources: Bain & Company; Pitchbook
Figure 8: 2022 continued to see democratisation of funding as cities outside of the top 3 metros
(MUM, NCR, BLR) increased share to 18% of investments
VC investments in India
($B, split by city)
$25.7B Key deal highlights
Uniphore ElasticRun XpressBees* KFintech

Others (18%)
(Chennai) (Pune) (Pune) (Hyderabad)
$400M $330M $325M $85M

MUM (13%)
1 Emerging SaaS hubs in Chennai and Hyderabad anchored

by talent ecosystems of IT hubs and large start-ups (e.g.,
NCR (24%) Freshworks in Chennai, Darwinbox in Hyderabad); cross-sector
innovation in cities such as Pune (e.g., MindTickle—SaaS,
XpressBees and ElasticRun—Logistics)
$10.0B
Others (13%)
MUM (11%)
2 Tech majors enabling start-up ecosystem’s extension to
Tier 2 and 3 cities (e.g., Google Startup School launched to
NCR (20%) mentor 10K start-ups in Tier 2 and 3 cities; Microsoft’s Highway
BLR (45%) to 100 Unicorns accelerating start-ups in Tier 2 cities)
BLR (56%) 3 Unique Tier 2+ market addressability—better understanding

of Tier 2+ India-specific problems (e.g., ElasticRun’s rural
distribution model) enabling more grassroots innovation and
deepening opportunity for investors
2020 2022
Notes: City split based on start-up’s headquarters; MUM—Mumbai; BLR—Bengaluru; NCR—National Capital Region (includes Delhi, Gurgaon, Noida, Faridabad,
Ghaziabad, Meerut); *Indicates firms that saw multiple rounds in 2022, with their total investments in 2022 indicated as deal value
Sources: Bain & Company; Department for Promotion of Industry and Internal Trade (DPIIT); Tracxn
15
Figure 9: Finally, number of unicorns created shrank from 44 to 23 over 2021–22, but for the second
year in a row, India added more unicorns than China
Number of new unicorns* Total number of

unicorns created**
305 U.S. China India

123
865 224 108
86 88 88 Globally, new
unicorns declined
from ~540 to ~220
across 2021–22
44 44 42
37
23
14 17
10 11
8
2018 2019 2020 2021 2022

1 2 3
India outpaced China for Open Technologies recognised as the
India China the second year in a row, 100th unicorn in May 2022, with India
US
adding ~2x more unicorns becoming only the third country with
than China in 2022 triple digit unicorns
Notes: *Unicorns defined as VC funded private companies that were valued at $1B+ in the respective year; **Number of unicorns (i.e., private companies valued
at >$1B) at any point; India unicorns includes Fractal Analytics and Molbio Diagnostics (PE funded), but investment value not included in deal flow (included in PE
share of investments) and excludes Securonix and Icertis
Sources: Bain & Company; Tracxn; CB Insights; Hurun
16
Key investment themes in 2022
Consumer tech, fintech, and SaaS continued to dominate VC investments, accounting for ~70%
of funding in 2022. However, consumer tech declined in salience, from ~50% to <35%.
While most sectors saw some reset over 2022, a few key themes emerged:
• Consumer tech investments declined from ~$20 billion to <$10 billion as high cash burn
across segments drove investor caution and megadeals ($100 million+) declined from 45+ to
~20 over 2021–22—while consumer tech continues to have multiyear tailwinds; in the near
term, investors are likely to be watchful as business models evolve towards more sustainable
unit economies.
• SaaS saw steady momentum over an expansive funding base in 2021: $4 billion+ in invest-
ments—as the India SaaS landscape demonstrated increasing maturity, including increasing
depth of assets with proven revenue growth (12+ companies reaching $100 million+ in annual
recurring revenue), attractive economics, product differentiation, and growing base of second-
generation founders supported by an investor base well versed in supporting India to the
world go-to-market for nascent SaaS companies.
• Fintech funding in India remained material—despite global compression in fintech

funding, valuation compression in notable global fintech, and regulatory headwinds. The
first half of 2022 accounted for a large part of fintech funding (lending, banking-as-a-service),
while the second half of 2022 saw interest in early-stage fintech (e.g., insurtech and wealthtech).
• Shipping and logistics grew 1.4x on the back of marquee deals of market leaders as tailwinds
from B2C commerce trickled down—three deals of $300 million+ (Delhivery, ElasticRun,
XpressBees) and three unicorns were added (Shiprocket, ElasticRun and XpressBees).
17
• A few emergent sectors stole the spotlight, especially in the second half of 2022:
– EV witnessed 2.4x growth in overall investment value—policy led cost competitiveness

for EV vs. internal combustion engine (ICE) vehicles (e.g., subsidies on EV), growth in
adoption led by innovative business models (e.g., mobility-as-a-service) and broader
interest across the value chain (e.g., charging infrastructure, OEMs).
– Agritech saw several follow-on rounds in 2022 with India specific business model
innovations (e.g., precision agriculture—Absolute) and end-to-end play of ecosystem
expansion by several scale players (e.g., DeHaat).
– Emergent deep tech segments, such as generative AI, space tech and climate tech gained
momentum led by global megatrends.
Figure 10: Consumer tech, fintech, and SaaS continued to account for ~70% of funding in 2022; mix
shift as share of consumer tech declined from ~50% to <35%
Annual VC investments in India

($B, split by sectors)
0.7x Growth EV and logistics saw sizeable

(2021–22) growth—logistics headlined by
$38.5B
marquee deals in market leaders
Others 0.7x (Delhivery, XpressBees) as
BFSI 0.3x tailwinds from B2C e-commerce
Healthcare 1.1x trickled down the value chain;
EV saw secular interest across
Energy and EV 1.8x
the value chain—large deals in
$25.7B Retail and consumer 1.1x OEMs (Ola, Ather) matched by
Shipping and logistics 1.4x early deals in battery makers
and EV infra
Web3/crypto 1.7x SaaS/fintech maintained deal
B2B marketplace and tech 0.5x value relative to 2021, growing
SaaS 1.0x in salience to 35%—<$50M
funding grew 1.7x in SaaS, led by
$11.1B Fintech 0.9x increasing depth in assets, and
$10.0B
1.5x in fintech, led by innovation
Other consumer tech 0.8x in emergent segments
Consumer tech
Gaming 0.3x Consumer tech declined more

Healthtech 0.3x than 50% ($20B+ to <$10B) as
Online food delivery 0.6x high-cash-burn models drove
Edtech 0.7x caution; follow-on rounds raised
Number 2019 2020 2021 2022 by leaders as IPO plans paused
B2C e-commerce 0.3x
of deals 756 809 1,545 1,611 (e.g., BYJU’s)
Notes: Other consumer tech includes content, agritech, travel tech, prop tech, etc.; Others includes IT, manufacturing, engineering, telecom, etc.; SaaS totals
exclude PE deals (e.g., Securonix, Instoried); BFSI—banking, financial services, insurance; OEM—original equipment manufacturer
Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge; Tracxn
18
Figure 11: Growing early-stage momentum in fintech and SaaS reflective in volume expansion over
2021—a few emergent sectors such as agritech, EV saw overall growth
Growth in average VC deal value in India (2021–2022)
100%
Bubble size represents the total deal value in 2022
1 Deal volume expansion in SaaS/fintech
indicates healthy activity in early stage
Web3/crypto 3 2 1 (<$50M, seed to series B)—early deals grew
from 250 to 375+ over 2021–22, led by
$0.9B
growing base of investible assets in SaaS
Specific large outliers skewing (proven revenue models, attractive economics,
deal size—e.g., Polygon in web3/crypto
50% Shipping and
second-gen founders, and product/price
($450M), BYJU’s in edtech ($1.1B),
logistics $1.2B
differentiation); despite global funding
Swiggy in OFD ($700M) Energy compression in fintech funding a few
and EV
Edtech subsegments continued to see interest (e.g.,
Agritech $0.9B
$2.0B embedded lending and banking-as-a-service)
$0.6B
0% Green shoots in EV and agritech—policy-
driven activity across the EV value chain;
Online food Other consumer SaaS India-specific innovation in agritech (market-
delivery $1.0B tech $2.3B $4.1B places—DeHaat, precision agriculture
—Absolute)
-50%
Gaming
$0.4B Healthtech
B2B marketplace
Fintech
$4.5B 2 Marquee deals in logistics drove deal size
expansion—three deals of $300M+ in logistics
and tech $1.2B over 2022 (Delhivery, ElasticRun, XpressBees)
B2C e-commerce $0.7B
$2.5B
3 Segments
-100% across consumer tech saw
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 100% volume and value compression—investor
Growth in number of VC deals in India (2021–22) focus on unit economics intensified, driving
down caution into early-stage deals as well
Notes: Other consumer tech includes content/social media, travel tech, etc.; BFSI, IT, healthcare, retail, and consumer not displayed in chart; SaaS excludes PE
deals (e.g., Securonix, Instoried); OFD—online food delivery
Figure 12: However, unicorn list in 2022 continued to be dominated by consumer tech, closely
followed by SaaS and fintech
New unicorns Total
added (2022) Unicorns added in 2022 unicorns^
Home
23 B2C e-commerce Edtech Gaming improvement
Purplle DealShare LEAD School Physicswallah Games 24x7 Livspace 45

6
OneCard Yubi Open Oxyzo 18

4
Darwinbox Hasura Amagi LeadSquared Uniphore CommerceIQ 18
6 Polygon
Technology
5ire (FMCG distribution 4
to underserved
markets)
2 Shiprocket XpressBees ElasticRun 6
3
Molbio Fractal
2 Diagnostics* Analytics*
17
108
Others Shipping and logistics Web3/crypto SaaS Fintech Consumer tech Unicorn HQ outside of top 3 metros 100th unicorn in India
2022 also saw emergence of 9 unicorns outside of leading metros (Bengaluru, Mumbai, NCR)
Notes: Unicorns defined as VC funded private companies that were valued at $1B+ in the respective year; *India unicorns includes Fractal and Molbio Diagnostics
(PE funded), but investment value not included in deal flow; ^Number of unicorns (i.e., private companies valued at >$1B at any point in their trajectory
—may not be unicorns or private companies today) and excludes Securonix and Icertis; FMCG—fast moving consumer goods
Sources: Bain & Company; Tracxn; CB Insights
19
Figure 13: Overall, sectoral investments saw a reset in 2022
Significant shift Steady activity/emerging subsegments Green shoots

in momentum
Consumer tech Fintech SaaS EV
2.4x
Total funding change
0.4x 0.9x 1.0x over 2021–22
Watershed funding year for EV led by
Total funding change Total funding change Total funding change
2021–22 2021–22 2021–22 a confluence of tailwinds
Moderation in deal Despite global slowdown Steady deal momentum Agritech

momentum reflected in fintech funding and in SaaS driven by early-
across segments (e.g.,
B2C e-commerce,
regulatory headwinds in
H2 2022, fintech in India
stage deals as breadth of
investible assets as well
1.4x
Total funding change
edtech, online food remained at pace with as confidence in Indian
over 2021–22
delivery); megadeals 2021, driven by select SaaS continued to
declined to ~20 (from large deals in lending/ grow—proven revenue Deal value crossed $500M—among
45+ in 2021) and fintech infra-focused models with 12+ highest funding across recent years
investor sentiment players in H1 2022; companies crossing
turned cautious given early-stage activity in $100M ARR, emerging Deep tech
significant cash burn emerging segments— category leaders,
across consumer insurtech,embedded differentiated product, Emergent interest in early-stage
tech business models lending, and wealthtech better pricing and deals in sectors such as generative
effective GTM AI, space tech, and climate tech
Notes: SaaS totals exclude PE deals (e.g., Securonix, Instoried); ARR—Annual Recurring Revenue; GTM—go-to-market
20
Figure 13a: Consumer tech saw significant moderation in deal momentum—broader sector faced
headwinds as investors focused on viable unit economics
Funding overview
Annual VC investments in India 2022 (Consumer tech by segments, $B)
Material share of D2C investments (e.g., Lenskart—

$160M, boAt—$60M) but lower deal value than
2021, that witnessed large investments in HOB^
2.8
2.5
2.0 Compression in
consumer tech led by
decline in megadeals
1.0 ($100M+) from 45 to ~20
0.7 over 2021–22—early
0.4
stage (<$50M) retained
momentum on deal
B2C Edtech Online Healthtech Gaming Other volumes with ~350 deals
e-commerce food delivery Consumer tech on average over 2021–22
Growth
over 2021 -73% -35% -39% -67% -74% -17%
2022 deal
63 49 9 35 11 203
volume
Top deals >> Flipkart BYJU’s Swiggy MediBuddy Zupee Dailyhunt

($264M) ($1.05B*) ($700M) ($125M) ($102M) ($833M**)
FirstCry upGrad Licious GOQii Games24x7 Glance
($240M) ($225M) ($150M) ($50M) ($75M) ($200M)
Key drivers
Macro opportunity in consumer tech remains strong, driven by a large base of internet users (~700M) and online shoppers (200M+,
projected to grow to 400M+ in 2026) expanding in Tier 2 cities and increasing investments in democratisation of online channels
(e.g., ONDC)
Sector-specific headwinds drove decline in 2022—re-emergence of offline channels (e.g., edtech), regulatory shifts (e.g., restricting
bet-based fantasy gaming players), pressure on unit economics and monetisation
Future outlook
Consumer tech likely to have multiyear tailwinds in India, driven by demographic and other enabling factors; likely to be
challenged in the near term, driven by macro considerations—funds expected to focus more on emergent, early-stage
segments—e.g., e-commerce enablers (search/adtech), 3-D AR/VR, and gaming (e-sports)
Investors to continue focus on improving unit economics as IPO plans for leaders remain in abeyance in 2023; some
consolidation expected
Notes: *Two separate deals of $800M and $250M; **Two separate deals of $805M and $28M; Other consumer tech includes content/social media, agritech, travel
tech, property tech, etc.; ^HOB—house of brands; Mergers and acquisitions activity by house of brand players not included in investments; AR—augmented
reality; VR—virtual reality
Sources: Bain & Company; Venture Intelligence; AVCJ; VCCEdge; Tracxn
21
Figure 13b: Fintech deal momentum led by sustained interest in innovative lending and fintech-infra
business models despite stricter regulatory oversight in 2022
Funding overview Sectoral trends
Annual VC investments in India (fintech-focused, $B) Segment split (2022, fintech-focused, $B)
~0.9x 4.5
Fintech infra Perfios ($70M),
(12%) M2P* ($60M) • Lending dominated
fintech unicorns in 2022
5.0 Neobanks Niyo* ($130M),
4.5 (7%) Fi ($62M) (3 out of 4)—continued
Insurtech Turtlemint ($120M), interest in embedded
(8%) Zopper ($75M) lending (e.g., supply chain
finance), marketplaces
Wealthtech enabling formal credit
INDmoney* ($86M)
(12%)
• Sizeable investments
in fintech infra—banking-
Payments Pine Labs* ($200M),
(14%) CRED ($140M) as-a-service providers
(Perfios, M2P, Lentra),
enabling scalability of
digital offerings
2021 2022 • Interest in wealthtech
led by demand (growing
No. of deals 124 168 retail investor base) and
Lending Yubi* ($223M),
increasing competitive
(47%) Oxyzo ($197M)
Salience (% total pressure due to supply-
13% 17% side chokes (e.g., limited
VC investments)
AMC licenses)
Share of <$50M
24% 39%
deals by value
Key drivers
Banking digitisation and fin-infra enhancements (UPI, OCEN), amid limited formal credit penetration (<5% for HH living expense)
fueling innovation in lending, payments
Demographic mix shift to affluent HHs (~90M to 130M over 2022–26) to drive wealthtech and insurtech demand
Some moderation due to regulatory headwinds—RBI clampdown on PPI license-led neocards, new digital lending norms, NUE delay,
and impending neobanking rules
Future outlook
Regulations will remain challenging, but likely to boost further fintech innovation in segments such as embedded finance, open
APIs leveraging AA framework, UPI global expansion, growing affluence to drive wealthtech (e.g., fractional investing)
Larger fintech players will double down on monetisation and improving unit economics—2023 will likely also see more mergers
and acquisitions (like Razorpay’s acquisition of Ezetap, Pine Labs’ acquisition of Setu in 2022) and consolidation as market leaders focus
on building full-stack solutions to enable profitable growth
Notes: *Firms that saw multiple rounds in 2022, with total investments in parentheses; HH—household; NUE—New Umbrella Entity; Affluent includes
upper-mid ($8.5–$36K) and high (>$36K) income per household; Sources; AMC—asset management company; AA—account aggregator; API—application
programming interface
22
Figure 13c: SaaS witnessed steady deal flow with higher share of seed and series A—horizontal
SaaS continued to take centerstage and infra showed emergent growth
Funding overview
Annual VC investments in India (SaaS focused, $B)

~1.0x
4.1 4.1
2021 2022
No. of deals 177 253
Salience (% total VC investments) 11% 16%
Top 5 deals (funding value)

Uniphore Chargebee LeadSquared Observe.ai CommerceIQ
($400M) ($250M) ($153M) ($153M) ($115M)
Sectoral trends
Investments split across segments ($B) Deal volume split across rounds Growth over
2021–22
4.1 4.1 253 ~0.9x
~1.2x
1.4 ~1.0x
~1.9x
~1.4x
2020 2021 2022 2022
Horizontal business Horizontal infra Vertical business Seed Series A Series B Series C Series D+
Horizontal SaaS has dominated investments—large end-market Higher share of seed and series A deals—asset depth, second-gen
($140B+ for top-5 categories) and several $100M+ ARR companies, founders along with emerging SaaS-focused funds
early-stage interest in infra with global category leaders emerging (e.g., Together, Avataar)
Key drivers
Maturing Indian SaaS landscape with proven revenue growth (12-14 companies exceeding $100M ARR) and attractive operating
economics (~60%+ GMs in SaaS)
Robust SaaS flywheel—expanding base of quality assets (2nd generation founders, global product/ pricing leadership, tested GTM
playbook) and SaaS focused investor base
Future outlook
Deal momentum to continue as global category leaders emerge from India—led by segments such as DevTools (e.g., Postman,
Lambdatest), CRM and sales (Leadsquared), logistics tech (Hypertrack, Fleetx.io), conversational AI (Uniphore, yellow.ai), cybersecurity
(Securonix, Druva)
Several scale SaaS leaders in India have demonstrated excellence in product leadership and better pricing—as the global macro situation
improves over the next few years, exits for these “IPO-ready” assets are likely to reinforce SaaS innovation in India
Notes: SaaS totals exclude PE deals (e.g., Securonix, Instoried); Horizontal business (e.g., CRM—customer relationship management, ERP—enterprise resource
planning, HCM—human capital management); Horizontal infra (e.g., security, testing, data management); Vertical business (e.g., healthcare applications,
e-commerce enablement); GM—gross margin
23
Figure 13d: EV funding grew by 2.4x over 2021–22, enabled by regulatory tailwinds and innovation
across the value chain driving cost competitiveness
Funding overview
Annual VC investments in India (EV focused, $B)
~2.4x
0.8
0.3
2021 2022
No. of deals 19 43
Salience (% total VC investments) ~1% ~3%
Top 5 deals
Ola Electric Ather energy* Euler Motors Lithium Urban Altigreen
($200M) ($184M) ($60M) ($50M) ($40M)
Sectoral trends
2022 VC investment in EV value chain ($M and key deals)

Auto & other OEM sales Battery
Battery Charging Mobility
components** & service swapping
~$33M ~$5M ~$594M ~$43M ~$45M ~$89M

Cygni Vecmocon Ola electric Sharify Battery Smart Lithium Urban
(~$12M) (~$5M) (~$200M) (~$26M) (~$34M) (~$50M)
Lohum Ather* (~$184M) Exponent ChargeUp BluSmart
(~$11M) Euler (~$60M) (~$15M) (~$10M) (~$27M)
New business models (e.g., B2B and OEMs raised near-scale rounds; 2W/3W adoption growing with
B2C mobility-as-a-service) expanding scope investing in building out the ecosystem price-competitive offerings, charging
of EV adoption (dealerships, financing) infrastructure, etc.
Key drivers
Regulatory measures to drive price competitiveness of EV—Fame II, PLIs led subsidies and high TCO of ICE vehicles led by fuel-price
rise, BSVI to drive EV adoption
Expanding opportunities led by supply-side innovation drove growth in volume of early deals in domestic supply chain enablers
(e.g., battery swapping, charging infra)
Future outlook
Investors remain positive about the EV industry in India—EV set to offer a $75-$100B revenue pool by 2030 driven by OEMs and
ecosystem build-out, platformisation of EV fleets, and rising cost competitiveness (2W TCO up to ~40% lower than ICE counterparts)
Several investors likely to tap into EV industry—strategic investment via incumbents with ambitious EV plans (e.g., Bajaj, TVS) and
corporate interest (e.g., Reliance investment in Altigreen, Shell’s investment in Statiq) to augment financial investors
Notes: *Firms who raised multiple rounds; FAME II—Faster Adoption and Manufacturing of Hybrid and Electric Vehicles is a three-year subsidy scheme focused
on electrification of public and shared transportation; **Others include marketplaces, software providers; TCO—Total Cost of Ownership
Sources: Bain & Company; Tracxn
24
Figure 13e: Agritech saw one of the highest funding years in 2022 as total investments crossed
$500M led by few large players demonstrating scalability
Funding overview Sectoral trends
Annual VC investments in India (Agritech focused, $B) Segment split (2022, Agritech focused, $B)
~1.4x 0.6
Other Jai Kisan ($50M),

(14%) Krishify* ($10M)
0.6 Aquaculture • Follow-on rounds

Aquaconnect* ($23M)
(5%) dominated funding
landscape in 2022 as
Precision VCs infused money in
0.4 farming
Absolute ($100M), start-ups with robust
Cropin ($14M)
(20%) business models (35%+
share of investments in
end-to-end players such
as DeHaat, FarMart,
Waycool)
Agri Inputs DeHaat ($60M),
(22%) FarMart ($32M) • Uptick in investments
across stages for
segments such as
precision farming
2021 2022 (Absolute, Cropin)—
demand led by business
No. of deals 29 44 model innovation
Agri Offtake (subscription-based
(B2B market WayCool* ($132M); monetization) as well as
Salience (% total
1% 2% linkages) Otipy ($31M) increased IoT led visibility
VC investments)
(39%)
Top 5 deals (funding value)

WayCool* Absolute Jai Kisan DeHaat FarMart
($132M) ($100M) ($50M) ($60M) ($32M)
Key drivers
Sizeable market opportunity for tech-led transformation in a traditionally inefficient sector (multiple intermediaries, lack of credit, supply
chain linkage gaps)
Govt stimulus incentivizing tech adoption (e.g., fund for financing agritech start-ups, subsidy for usage of “Kisan drones,” “AgriStack**”
database to enhance credit access)
Future outlook
Agritech likely to see mixed momentum—while a few scale players with funding have emerged, business models need to be refined and
ability to demonstrate adoption by agritech value chain at scale remains to be tested
Launch of agritech focused funds in India (e.g., Omnivore) may further propel enable innovation at early stages (e.g., hydroponics,
carbon-credits monitoring)
Notes: *Firms that saw multiple rounds in 2022, with total investments in parentheses; **Collection of technology and digital database for 80M+ farmers; FaaS—
Farming-as-a-service includes pay per use services in agriculture—equipment on rent, contract farming, etc.; Classification based on primary model; Other
includes start-ups in hydroponic farming, etc.
25
Figure 13f: Emergent deep tech segments saw early traction and are likely to see momentum as
global megatrends within these spaces intensify
Generative AI (SaaS) Space tech (manufacturing) Climate tech (energy and EV)
~$15M ~$115M ~$125M*

VC investments in 2022 VC investments in 2022 VC investments in 2022
ChatGPT dialogues as well as Dall-E Starlink satellites made first orbit entry COP27 reinforced criticality of climate
2022 global
and Stable Diffusion images triggered —used by Ukrainian army for drone tech; global climate tech VCs invested
trigger events global interest in AI dev. warfare, military coordination a record ~$50B* in 2022
India assumed chairperson-ship for India saw its first energy transition
Skyroot became the first private Indian
India highlights the global partnership on AI (led by focused VC, Transition VC, launch a
company to launch a rocket into space
deepening AI ecosystem) ~$50M climate tech fund
Ecozen ($27M), RenKube ($24M),
Leading start-ups Rephrase.ai ($14M), Dubdub.ai ($1M), Agnikul Cosmos ($35M), Bellatrix
Recykal ($22M), Solar Square ($16M),
(total funding) Gan.ai (N/A) Aerospace ($11M), Dhruva Space ($7M)
Phool ($8M), EdgeGrid ($6M)
Sequoia, Lightspeed, Bessemer, Lightspeed, Blume, Rocketship.vc**, Elevation, Avaana, Tata Cleantech,
Active VCs
Kalaari, AV8** pi Ventures Sixth Sense
Regulatory enablers and industry
Increasing traction as corporates focus
Several regulatory enablers—INDIAai collaboration—policy shifts since
on ESG goals; several accelerators
Key enablers (National AI Portal) for boosting 2020 and private collaboration
being launched to enable innovation
innovation led by NASCOM/MeitY supported by IN-SPACe (ISRO-led
(e.g.,ClimAct, by Merak Ventures)
private outreach arm)
Notes: MeitY—Ministry of Electronics and Information Technology; IN-SPACe—Indian National Space Promotion & Authorization Centre; ESG—Environmental,
Social and Governance *Does not include EV, EV charging, batteries and agritech; ** US based funds investing in India
Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge; Tracxn; HolonIQ
26
Investor base and fund-raising
The investor landscape broadened over 2022: Share of leading funds reduced to <20% from 25%
as activity from global crossovers and hedge funds slowed down. Traditional PE funds continued
to demonstrate interest in select growth equity deals, in line with 2021, and participated in several
$100 million+ megadeals (e.g., Dailyhunt [CPPIB], ElasticRun [Goldman Sachs], XpressBees
[Blackstone, ChrysCapital], Amagi [General Atlantic]). Micro VCs became significantly more
present across the landscape in in 2022—the base of active micro VCs grew from 65 to 80+ over
2021–22, and thematic micro VCs (e.g., sector focused [SaaS: Pentathlon; gaming: Lumikai; deep
tech: Speciale Invest] and women-founder focused [She Capital]) increased activity.
Family offices, corporate VCs, and first-time funds were active with 300+ deals, in line with 2021:
Select marquee deals include upGrad: Lupa Systems (family office), Rapido: Shell Technology
Ventures (corporate venture fund), and Innoviti: Panthera (first-time fund).
In a sharp contrast with slowdown in investment activity, 2022 saw record fund-raising as multiple
investors raised their largest ever India-focused funds: This occurred across leading global
investors (e.g., Sequoia: $2 billion India-focused fund), prominent domestic leaders (e.g.,
Elevation Capital: $670 million; Blume Ventures: $250 million; Fireside Ventures: $225 million),
and micro VCs (e.g., Artha India Ventures’ maiden micro VC fund: Artha Select, $55 million).
While fund-raising momentum was largely demonstrated in the first half of 2022, as LP commit-
ments made in 2021 closed, capital deployment is likely to remain cautious—VCs will likely earmark
some of their dry powder to support portfolio companies in scaling, M&A, and additional runway,
while scouting carefully for quality assets at the right valuation.
27
Figure 14: Increasing depth within the investment landscape—growing salience of prominent
domestic funds and micro VCs; concentration of larger funds reduced
Annual VC investments in India

($B, split by leading India VCs)
6.3 4.8 4.7 6.6 11.1 10.0 38.5 25.7 1 Share of leading investors
100%
reduced to <20% as crossover
35 /hedge funds pulled back
3 significantly; while deal activity
30 remained strong for others, higher
share of early deals drove
25 compression in deal value
2
20
2 Growth equity deals by PE
15 firms continued in 2022 (~10%
of total investment value) as
10 1 funds selectively invested in deals
in a continuation of this trend
5
from 2021
0
2015 20162017 2018 2019 2020 2021 2022 Micro VCs and domestic funds
3
Share of leading and other small funds (CVCs,
28% 16% 21% 19% 28% 24% 25% 18%
investors in deal value family offices, new funds)
Growth equity accounted for a salient share
<5% <7% ~12% ~10% of investments in 2022
deals by PE firms
Tiger Global SoftBank Sequoia Capital Alpha Wave Global Accel Lightspeed Venture Partners
Matrix Partners Steadview Capital Nexus Venture Partners Elevation Capital VC activity in PE deals Others
Notes; Leading investors defined as leaders in five-year deal activity ($1B+ deployed and 35+ deals or 500M+ deployed and 50+ deals over 2018–22); In case of
multiple investors, deal value per investor is calculated assuming equal split of investment; CVC—Corporate VC
Sources: Bain & Company; Venture Intelligence; AVCJ; VCCEdge; Tracxn
Figure 15: Deal value compression was partly driven by a shift to small and medium ticket size
investments across portfolios
Number of VC deals for top investors in India in 2022

(split by deal size)
66 50 15 7 104 86 106 78 38 21 43 37 27 24
7% 6% 8% 10% 5%
16% 16% 5% 18% 2% 8% 4% 17%
12% 15%
23% 14%
47% 12% 8%
27% 49%
22% 57% 18%
43% 30%
80% 48% 38%
42% 52%
18% 37%
52% 69%
62%
49% 52%
32% 43% 43% 38%
30% 34%
26% 24%
20%
3% 10%
2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022
Tiger Sequoia Elevation
Softbank Accel Lightspeed Nexus
Global Capital Capital
First seed round in Selective large Deal volume Launched $650M Increasing early- Similarly raised largest ever India
India (Shopflo) deals in H1 2022— leader, new $2B India fund—focus to mid-stage venture focused funds; further, continued
—growing early no activity in India-focused fund on marketplaces, participation with participation in follow-on growth stage
investments, 90% H2 2022 drove early-stage SaaS, web3/crypto $500M India/SEA- rounds in portfolio assets in 2022 apart from
of deals in H1 2022 activity focused fund early-stage activity
Small ticket size (<$10M) Medium ticket size ($10M–$50M) Medium-large ticket size ($50M–$100M) Large ticket size ($100M+)
Note: Leading investors defined as leaders in five-year deal activity ($1B+ deployed and 35+ deals or 550M+ deployed and 100+ deals over 2018–22)
28
Figure 16: Further, traditional PE funds continued to demonstrate interest in select growth equity
deals, in line with 2021, deepening the pool of growth capital available
Number of growth deals Select growth equity deals with participation from PE funds in 2022
by PE investors
Company Investors (PE, others) Sector Deal value ($M)

20
Dailyhunt CPPIB, Ontario Teachers Pension plan Content/social media $833M*
ElasticRun Goldman Sachs, Softbank Shipping and logistics $332M

18
XpressBees Blackstone, ChrysCapital, TPG Growth, Norwest Shipping and logistics $300M
Ola Electric Edelweiss PE, Alpine Manufacturing (EV) $200M
Lenskart Temasek, Epiq, Alpha Wave B2C e-commerce $166M
Amagi General Atlantic SaaS $110M
Aiquire General Atlantic, Chiratae, Premji Invest, SoftBank SaaS $100M
Perfios Warburg Pincus, Bessemer Fintech $70M
BoAt Warburg Pincus, Malabar Investments B2C e-commerce $60M
2021 2022
Notes: Few deals with smaller PE participation may not be included; Examples above are illustrative and not exhaustive; * Includes 2 separate deals of $805M
and $28M
Figure 17: Micro VCs grew in salience over 2022, increasingly playing a critical role in the ecosystem
by bridging funding gaps at pre-seed and seed rounds
80+ 5+ 40+
Active micro VC funds mVCs launched Multiple thematic deals each by
in India $20M+ funds mVCs emerging leading mVCs*
Up from ~65 in 2021, A few mVCs raised Emergence of thematic Leading mVCs such as
several micro VCs significant capital (e.g., Artha mVCs reflective of Better Capital and 100x.vc
launched across the select fund: $55M; Auxano: deepening ecosystem— were among the most
spectrum—by existing $25M; Suvan: $20M) e.g., sector focused (SaaS: active, with 40+ deals
funds (e.g., Blume Pentathlon; gaming: each, as pre-seed and seed
founders fund), by Lumikai; deep tech: investment funnel continued
founders (e.g., Bharat Speciale Invest) and to remain active
founders fund), and solo women-founder focused
GP mVCs (Better Capital) (SheCapital)
Micro VCs increasingly playing a critical role within the Indian start-up ecosystem
Bridging funding gaps at early stages Accelerating path to product-market fit (PMF)
(pre-seed and seed) and reducing mortality of younger start-ups via business-building support, ranging from founder mentorship
in a tight macro environment and talent recruiting to GTM strategy
Notes: mVC—Micro VCs; Micro VCs are VCs with funds sizes between $10–$60M, typically investing in pre-seed, seed, and Series A deals (follow-on rounds) with
cheque sizes <$1.5M; Solo GP—VCs with one general partner; *Includes disclosed deals only; **Leading mVCs include Titan, 100xVC, Better, PointOne,
Capital A, Eximius, and Artha, among others
Sources: Bain & Company, Crunchbase, Inc42, Deal Street Asia
29
Figure 18: Family offices, corporate VCs, and first-time funds continued to remain active over 2022
VC deals in India with participation from family Overview of select deals in 2022
offices, CVCs, first-time funds (split by type of fund)
331 Family offices

315
29 Company Deal value* Family Office Month
10 FirstCry $240M Premji Invest Feb 2022
upGrad $225M Lupa Systems Jul 2022
Pixis $100M Premji Invest Jan 2022
210 205 168 Dailyhunt $85M Catamaran Ventures Jan 2022
201
14 18 Skyroot Aerospace $51M LN Mittal India Ventures Sep 2022
156 Corporate VCs
146
14 109 Company Deal value* CVC Month
10 110
65 Stashfin $270M Snow Leopard (Kirloskar) Jun 2022
82
Udaan $200M M12 (Microsoft Corp.) Jan 2022
134
104 Rapido $178M Shell Technology Ventures Apr 2022
71 87 77
60 First-time funds
Company Deal value* First time fund Month
2017 2018 2019 2020 2021 2022 Innoviti $45M Panthera Growth Partners Jul 2022
% of total Kuku FM $21M Fundamentum Aug 2022
25% 29% 28% 25% 21% 20%
VC deals Blupin $17M Riverwalk Holdings Apr 2022
Family offices CVCs First-time funds BluSmart $16M Panthera Growth Partners Jan 2022
Notes: First time funds defined as funds that debuted in the corresponding year; * indicates total deal amount—respective family office, CVC, or first time fund may
have a smaller participation
Figure 19: In contrast with investing activity, 2022 saw record fund-raising as several investors
across the spectrum raised their largest ever India-focused funds
India-focused/allocated funds raised by VCs* ($B, split by investors)

Does not include global fund-raising that may eventually invest in India assets
Fund-raise value not inclusive of global funds that

raised capital without India-specific allocation Fund-raising
1.0 2.7 2.1 3.2 3.4 8.0 Overview
100% Other Other
Nexus Other Other Aavishkaar
DSG Gaja Capital 3One4 Capital Fundamental VC Fund-raising momentum
Other Venturi Partners Stride Ventures
80 Other Alteria Capital Chiratae InnoVen Capital Avataar Ventures partly driven by LP
Stride Ventures
Jungle
Jungle Ventures WaterBridge Ventures
Jungle Ventures commitments from
Stellaris Ventures IvyCap
Alteria Capital Blume Ventures
Fireside Ventures 2021—most of these
Saama Chiratae Chiratae
60 Jungle Ventures
Lightspeed Ventures
Sequoia Capital
Fundamentum were closed in H1 2022
Kae Sequoia Eight Roads Ventures
Lightspeed Ventures
Capital Quona B Capital Group
Saama
Lightbox Elevation Capital
Blume Ventures
Despite dry powder build,
Orios Jungle Ventures
VP Matrix
Lightbox
Lightspeed Ventures capital deployment
40 Aavish- Partners India Stellaris expected to remain
Accel
kaar A91 Partners
Nexus
Trifecta Capital slower led by (a) valuation
Elevation Capital
Sequoia
Capital
Alteria Capital corrections over 2023–24,
Sequoia Capital
20 Amazon Smbhav (b) caution as GPs scope
Venture Fund
Chira- Sequoia Capital Accel Sequoia Capital out quality assets within the
tae A91 Partners ecosystem and (c) caution
0 among LPs as realizations
2017 2018 2019 2020 2021 2022 from prior deployments
may slow down (despite
India-focused funds raised by leading investors** capital commitments made
(most active in terms of deal volume/value over the last five years) to newer funds)
Notes: *Includes funds raised by global or domestic VCs that are exclusively earmarked for India; ** Global or regional funds raised by investors not included
Sources: Bain & Company; Venture Intelligence; ACVJ
30
Figure 20: New fund-raises across funds illustrative of dry powder buildup in the ecosystem—
however, capital deployment expected to remain cautious
2022 was an exceptional year as fund-raising peaked

to record levels leading to a large base of dedicated dry powder
Leading investors raised Fund-raises by Fund-raises by

largest India-focused funds prominent India funds mVCs and solo GPs
$2B $670M $225M $250M $55M $5M

Sequoia Elevation Fireside Blume Artha’s Kettleborough’s
India fund VIII capital fund VIII Ventures Fund III Ventures Fund IV maiden mVC fund maiden solo
GP VC fund
$650M $500M* $250M $600M*

Accel India fund VII Lightspeed Eight roads Jungle Ventures IV
India fund IV healthtech fund
However, capital deployment will continue to remain cautious over 2023:
Caution as VCs earmark some dry powder Slower pace of investments with increased
to ensure sufficient runway or M&A opportunities diligence on scalability and unit economics
for portfolio companies (especially at late stages)
Notes: Solo GP—VCs with one general partner; * includes fund-raising for investment in SE Asia
Sources: Bain & Company; Venture intelligence, AVCJ, Morgan Stanley report
31
Perspectives on exits landscape
Exits also saw a dampening in momentum, declining from $14.3 billion (including the now-
cancelled BillDesk acquisition by PayU) to $3.9 billion over 2021–22: public market exits continued
to account for ~40% of total exits, in line with 2021.
Decline in public market exits from $5 billion+ to $1.5 billion was largely driven by a slowdown
in tech listings in 2022: more than 10 firms paused IPOs in light of the global rout on public tech
listings. Further, a significant share of the $1.5 billion in public exits was driven by trades made
by anchor investors exiting listings from 2021, post lock-in expiry of their positions (e.g., exits
from Paytm, Zomato, Nykaa). However, 2022 did see six IPOs with VC exits, but these were
relatively smaller compared to 2021.
While total strategic/secondary exits remained consistent in volume (63 in 2021 vs. 59 in 2022),
large exits declined significantly: 2022 saw 11 $50 million+ exits relative to 19 in 2021.
Globally, a continued tepid performance of tech listings is expected to remain the dampening
force on tech IPO momentum in 2023.
32
Figure 21: Exit momentum declined dramatically relative to 2021—share of public market exits
remained in line with 2021 but shifted from IPO sales to post-IPO trades
Value of VC exits in India

($B, split by mode of exit)
Includes $4.7B BillDesk acquisition 14.3

Public market exits
by PayU; called off in October 2022
Public market exits continued to
(38%) maintain material share in 2022
despite only 6 IPOs with VC exits—
(1%) anchor fund exits post lock-in expiry
from 2021 IPOs drove 60% of public
market exits, contrary to 2021 when
(11%) 95% of public market exits were led
(1%) (6%)
4.9 by IPOs
4.2 4.4 (61%)
(16%) 3.9
(3%) (12%)
(31%) (35%) (2%) (40%) Secondary and strategic sales
1.9 1.4 (13%)
(76%) Secondary/strategics exit value
(56%) (68%) (59%) (47%)
(41%) (84%) compressed as large exits
reduced—average exit deal size
2016 2017 2018 2019 2020 2021 2022 declined from $65M* to $30M as large
Average exit ($50M+) exits declined from 19 to 11
value ($M) 16 36 29 38 19 123* 44
over 2021–22; total exit deal volume
Number remained consistent (63 in 2021 vs.
123 116 170 116 73 78 89
of Exits 59 in 2022)
Secondary and strategic sale Buyback Public market sale including IPO
Notes: Exits with undisclosed deal amounts have not been included; Exit volume and value do not include companies listed outside of India (e.g., Freshworks);
MuSigma accounted for 90% of the buyback value for 2022; *excludes $4.7B BillDesk deal in 2021 that got called off in October 2022
Sources: Bain & Company; Venture Intelligence; AVCJ; VCCEdge; VI; Preqin
Figure 21a: Secondary sales and strategic exits continued to see momentum on volume, but
average exit size saw ~50% compression and no mega exits (>$250M)
Secondary and strategic exits Leading secondary and strategic deals with VC exits (>$50M)
(split by sectors, 2022)
$1.9B Asset Key exiting investors Buyers Sector Exit value
FirstCry Chiratae, SoftBank, Newquest Premji invest B2C e-commerce $240M

Other (24%)
Lifelong Online Tanglin, IndigoEdge Thrasio B2C e-commerce $150M
Clovia IvyCap, At Capital Reliance Retail B2C e-commerce $125M
Curatio
SaaS (18%) Healthcare ChrysCapital, Sequoia Torrent Pharma Healthtech $100M
EZEtap Berggruen, Helion, Prime Razorpay Fintech $100M

Accion Labs TA Associates True North Business tech and IT $93M
Fintech (22%)
Karza
Technologies Dreamweaver, Artha Perfios Fintech $80M
Knowlarity Strategic Acquisition Gupshup SaaS $80M

Sequoia, Omidyar Network, Temasek,
HealthKart Healthtech $70M
Kae Capital A91 Partners
Consumer tech (37%) Unbxd Eight Roads, Chiratae Netcore Cloud SaaS $54M
Average exit size reduced from $65M* to $32M over 2021–22 driven by fewer $50M+ exits
Exit value Secondary sale Strategic sale
Notes: Other includes shipping and logistics, media and entertainment, manufacturing, BFSI, B2B commerce and tech, business tech, and IT; Retail and consumer
*excludes $4.7B BillDesk deal in 2021 that got called off in October 2022
Sources: Bain & Company; Venture Intelligence; AVCJ; VCCEdge; VI; Preqin
33
Figure 21b: Share of public market exits via IPO declined from ~95% to ~40% over 2021–22; anchor
investors exiting post lock-in expiry drove momentum in 2022
Total public market exits with VC participation

(split by mode of exit)
$5.4B IPOs with VC Exits in 2022

Company Month Sector Key exiting investors Exit value
Five Star Nov 2022 BFSI Sequoia, Matrix $196M

Business Finance
Campus May 2022 Retail and TPG Growth $134M
Activewear consumer
Delhivery May 2022 Shipping and SoftBank $132M
95% logistics
Sula Vineyards Dec 2022 Retail and Saama Capital, $95M
consumer Verlinvest
$1.6B Landmark Cars Dec 2022 Retail and TPG Growth $39M
consumer
IPO (40%)
Tracxn Oct 2022 SaaS Elevation, Sequoia, $18M
Public Trades Accel
(60%)
5% Other public trades
2021 2022 ~$750M worth public market VC exits in 2022 via trades led by anchor investors
Share of exiting stakes post lock-in period expiry of 2021 IPOs (Zomato, Policybazaar, Paytm,
38% 40% Nykaa, etc.)
total exits
Notes: Public market sales with VC participation include public market exits where the seller/exiting investor is a venture capitalist, DroneAcharya not included in
the list of IPOs with VC exits as investors were allocated fresh equity shares in the IPO
Sources: Bain & Company; Venture Intelligence; AVCJ; VCCEdge; VI; Preqin; National Stock Exchange; Bombay Stock Exchange
Figure 22: Listed tech companies saw a tepid performance globally—in India, similarly, volatility in
stock prices of tech listings drove caution towards IPO exits
US: Sharp rout across the US India: Despite market resilience, tech-first players
equity market trended lower
2022 performance of select US-listed stocks (Annual 2022 performance of select India-listed stocks (Date of IPO; Drop since
(First trading day price indexed at 100) performance) (First trading day price indexed at 100) first trading day in 2022)
140 140
120 120
Sensex (+4%)
100 100
80 S&P 500 (-19%) 80
Delhivery (May'22; -35%)

60 NYSE Fang+ (-40%) 60
Freshworks (-42%) Policybazaar (Nov'21; -53%)
Amazon (-50%) Nykaa (Oct'21; -55%)
40 Snowflake (-57%) 40 Zomato (Jul'21; -58%)
Meta (-65%) Paytm (Nov'21; -60%)
20 20
Jan Apr Jul Oct Dec Jan Apr Jul Oct Dec
2022 witnessed a global tech stock rout, led by a sharp 10+ tech-first companies deferred IPO plans led by caution due to global market
drawdown in the valuations of US megacap tech companies and volatility, weak performance of recently listed tech-first peers, challenges in listings in the
steep compression in revenue multiples for leading industries US, and compression in implied valuations
(e.g., SaaS)
Sources: Bain & Company; National Stock Exchange; NASDAQ; Bloomberg
34
Key shifts in the start-up ecosystem
over 2022
As stakeholders adjusted course, in light of macro headwinds, 2022 saw a significant revamp
across the investment ecosystem.
Investors pushed for a pivot from “growth at all costs” to “sustainable unit economics,” realigning
strategies across portfolio companies. While most investors focused on LP development and
raised record funds in 2022, despite dry powder build-up, asset diligence and selection to
identify quality companies/founding teams continued to become more pertinent. Further,
venture debt gained impetus as an attractive non-dilutive funding alternative or bridge financing
option in a relatively volatile macro environment. Several venture debt funds/debt platforms
(e.g., Alteria, BlackSoil) saw increased activity over 2022.
Regulatory oversight intensified with the aim of clarifying norms for specific sectors and sand-
boxing innovation. Some sector-specific regulations intensified challenges for fintech (e.g., a
ban on credit via non-bank PPIs impacting business models for neocards, norms on digital
lending increasing compliance burden) and cryptocurrency (e.g., taxation for VDA). However,
tailwinds from structural macro enablers continue to boost the start-up ecosystem (e.g., scaling
of digital rails, PLI to boost manufacturing, SEBI’s disclosure framework, and stricter norms for
tech listings to usher in transparency for retail investors).
Lastly, start-ups were faced with a difficult set of choices in 2022 as funding became scarce and
investors prioritised profitability: These included layoffs for conserving cash, distress M&A, and
deferred IPOs. Further, surfacing of corporate governance challenges reinforced the need for
regulatory scrutiny.
A few bright spots, however, reflected a deeper and more mature ecosystem in 2022: 40% of
2022 unicorns were added outside the top three metros, 15% of unicorns in India now have a
female founder or co-founder, and a material 50% of start-ups registered with the Department
for Promotion of Industry and Internal Trade (DPIIT) are outside the top three metros (Mumbai,
Bengaluru, and NCR).
35
Figure 23a: 2022 saw several fundamental shifts across the investor landscape
Pivot from “growth- Rise in venture Significant dry Global ESG trends
Investors at-all-costs” to debt salience— powder buildup trickled down to
“sustainable unit venture debt as multiple investors India—ESG reporting
economics”— funds grew in raised their largest becoming a norm;
investors reassessed scale with volatility ever India dedicated domestic trailblazers
portfolio and ensured in valuations funds— ~70% closed appointed dedicated
investee companies boosting demand in H1 partly from ESG leadership
aligned strategic for non-dilutive 2021 LP (e.g., 3one4)
direction financing and commitments
easing regulations
for convertible
notes*
Regulators Growing impetus for venture debt in the ecosystem over 2022
Total venture debt in India ($M) Overview of key venture debt funds in 2022
~600
~550 Fund Description Key portfolio 2022 fund-
companies raises
Alteria Sector agnostic, up to $20M Mensa, Jumbotail, $120M

cheques—long term and Good Glamm
2021 2022 WC debt
Multiple of VC
0.01x 0.03x Sector agnostic, $2M–$5M Yubi, Uni, Sugar, $200M
equity funding Stride cheques, at series B/C stage BluSmart, Upstox
Key deals
Udaan Stanza living Kissht Pharm- Black- $2M–$3M cheques for mid- and Oyo, Udaan, Slice, $30M
($200M) ($57M) ($13M) Easy* Soil growth-stage start-ups across Spinny
130+ deals
Start-ups Significant headroom in venture debt
multiple of VC equity funding
Innovative models (e.g., growth Big Basket,
Trifecta financing), follow-on/equity rounds DeHaat, Dailyhunt
(US at 0.2x vs. 0.03x for India) for select credit relationships
Notes: DPIIT extended timelines for conversion of debt to equity to 10 years from 5 years; *Undisclosed deal value; Venture debt deals not included in total
investment value; WC—working capital
Sources: Bain & Company; Stride Ventures; Venture Intelligence; Tracxn
Figure 23b: While regulatory challenges intensified for a few sectors in 2022, tailwinds from
structural macro enablers continued to accelerate innovation
Structural macro regulatory tailwinds continued to foster innovation in

Investors the ecosystem…
Continued focus on Double down on PLIs Greenlight for cross geo SEBI focus on new
scaling digital rails and expansion of investments from India disclosure framework
—e.g., ONDC launch coverage to new sectors as SEBI eliminated need and stricter norms for
(democratic e-commerce), (e.g., drones) with a view for Indian connection in tech listings to continue
cross-border UPI, UHI to capitalize on China+1 investments in other driving more transparency
launch (electronic health sourcing strategies of regions from India-based across the ecosystem
records) global manufacturers funds
Regulators …while challenges intensified for a few sectors
Fintech Cryptocurrency
2022 was a headline year as the RBI triggered a Tax introduced on trading on crypto assets and
revamp across fintech firms—despite clampdown on a other VDA (virtual digital assets)—leading to a
few areas, e.g., credit via non-bank PPIs halted significant impact on India’s fledgling crypto landscape;
(impacting neocard players Slice, Uni, OneCard), new however, there were some positive developments with
norms on digital lending, NUE delayed—the RBI the introduction of CBDC (central bank digital currency)
continued to foster innovation more broadly (e.g.,
Start-ups account aggregator framework expanded to FSPs/UPI
launched globally)
Notes: UHI—Unified Health Interface is a network of open protocols that enable interoperability in health services; FSP—Financial Services Providers
36
Figure 23c: As macro headwinds, liquidity crunch, and a strategic pivot from “growth at all costs” to
profitability intensified, start-ups faced a difficult set of choices in 2022
Despite volatility in the start-up ecosystem in 2022… …a few bright

Investors spots remained
Layoffs Distress M&A Corporate Deferred IPOs Emerging trends

Governance
issues
~50%
20K+ 10+
Registered start-ups
from outside top
Tech IPOs deferred 3 metros
Layoffs across the
India ecosystem
Regulators
Tech layoffs were a
global phenomenon in
2022—India was no
Smaller early- to mid-
stage start-ups most
significantly impacted
Corporate governance
challenges surfaced
across the ecosystem
Volatility in valuations,
global public tech
stock rout and weak
~40%
New unicorns in 2022
exception as firms by liquidity crunch— (e.g., related party performance of India from outside top
focused on conserving shutdowns and some transactions, listings from 2021 led 3 metros
cash by restructuring distress M&As, incomplete disclosures, start-ups to shelve
orgs. and closing specifically in edtech tax challenges) 2022 IPO plans
noncore verticals. and content/social
~15%
Edtech hardest hit with media (high CAC
max share of layoffs segments)
With 7 additions in
2022, 15% of unicorns
Start-ups have a female
co-founder
Note: CAC—customer acquisition cost

Sources: Bain & Company; Department for Promotion of Industry and Internal Trade (DPIIT); Venture Intelligence; Tracxn
37
2023+ look ahead
2023 will likely see emergence of a more resilient ecosystem as stakeholders remain cautiously
optimistic. These are a few key trends we expect to gain in traction:
• Early-stage deals expected to remain material with innovation in emergent sectors, while SaaS
(and, to some extent, fintech) will remain significant sectors.
• Broadening of the investor base as domestic funds and micro VCs become more salient and PE
funds increasingly look at more growth equity deals.
• Late-stage start-ups will continue to focus on profitability and conserve cash for a longer
runway—with some M&A, consolidation, and potentially flat or down rounds in the offing.
• The year 2023 is likely to mark the beginning of the “India Stack” going global—with
cross-border UPI, open APIs to enable eKYC and other services to be leveraged in other
countries, etc.
Over the longer term, global investors are likely to maintain a positive outlook on India as tailwinds
from underlying fundamentals open up new economic opportunities.
38
Figure 24: Cautious optimism across stakeholders—while global headwinds will impact India, 2023
will likely see a stronger and more resilient ecosystem emerge
Early-stage deal making likely to see continued traction buoyed by innovation in emergent, tech intensive segments
1
e.g., Gaming (e.g., esports/hypercasual games), healthtech, EV, generative AI; slower pace on web3/crypto
Investor SaaS and fintech to maintain material share in funding—40+ soonicorns, depth in SaaS ecosystem (attractive
2
landscape economics, proven GTM, product/price leadership), continued innovation in lending/infra by maturing fintech firms
Broadening of investor landscape with increased participation from a wider investor base—e.g., micro VCs, family
3
offices, global funds continuing to build presence in India
Late-stage start-ups to remain laser focused on improving unit economics and path to profitability as
4
liquidity crunch continues and conserving cash remains critical
Start-up Consolidation expected while public market exits (IPOs) of tech companies will remain muted—M&A
5
ecosystem activity in fintech, B2C e-commerce (house of brands); investors may reserve capital to enable strategic M&A
Likelihood of a few flat or down rounds as investors reevaluate their portfolios (e.g., OYO’s devaluation by
6
SoftBank) and pressure from public market multiples trickles down into the ecosystem
Regulatory oversight aimed at clarifying guidelines and sandboxing new innovation will continue—most of this
7
is expected to be in spirit of strengthening the broader ecosystem
Macro- 2023 likely to see first winds from the India tech stack going global (e.g., cross border UPI, open APIs to enable cross-
8
environment border adoption of digital products, such as Aadhaar, eKYC); to be further accelerated as India assumes G20 chairpersonship
Figure 25: Finally, over the longer term, global investors are likely to remain bullish on India as an
investment destination, underlined by solid macro fundamentals
1 2 3 4 5
Large Rapidly Promise of Workplace Established

consumption formalizing the India to the start-up
opportunity economy Stack world ecosystem
Rising per capita incomes Massive leap as a India’s scaled, public India’s attempts to build a Mature ecosystem of
(expected to reach $5,000 significant share of 450M+ interoperable digital rails global manufacturing hub ~90K+ registered start-ups
by 2031), emerging affluent informal workers enter the (UPI, Aadhaar, eKYC, to broaden economic (2x vs. 2021) expected to
middle class (200M+) and formal economy as digital eSign, digital health ID, avenues, while offshoring further foster innovation
increased discretionary rails (Aadhaar, OCEN, etc.) to enable inclusive base remains strong, to and drive broader socio-
spend ONDC) become ubiquitous digital acceleration at scale support job creation economic growth
Sources: Bain & Company; Morgan Stanley, Goldman Sachs
39
Glossary
Definition of India VC used in the report
Geography Deal size
Headquartered in India Deal value less than $20M
OR OR
VC/Growth fund
Majority workforce in India classification Deal value greater than $20M
where a VC fund is lead
investor or accounts for
majority of investment
Investment deal stages used in the report

Classification based on deal size Classification based on deal series*
1 Small ticket size

Deal value less than $10M
Seed
Initial financing for a new enterprise
that is in the earliest stages
of development
2 Medium ticket size

Deal value between $10M and $50M
Series
A/B
Early-stage round of financing by a
venture capital** firm in a company
3 Medium-large ticket size

Deal value between $50M and $100M
Series C
& above
Includes late-stage financing by
a venture capital firm into a company
from Series C to Series Z+
4 Large ticket size/megadeals

Deal value higher than $100M
Notes: *As classified by Pitchbook; **Defined as an investor that specialises in financing new businesses or turnaround ventures that usually combine risk with the
potential for high return
Source: Pitchbook
40
Select terms used in the report
Consumer tech B2C or consumer internet products and services, including B2C e-commerce, edtech,
online food delivery, gaming, healthtech, agritech, and other similar segments
Agritech Tech innovations in agriculture, horticulture, and aquaculture aimed at improving yield,
IND U STRY C LA SSIF IC AT ION
efficiency, and profitability

Fintech Financial services companies leveraging technology, including payment providers,
lending solution providers, neobanks, and other similar players
Enterprise tech (SaaS) B2B software delivered on cloud-as-a-service, including horizontal business software,
vertical business software, and horizontal infra software
Web3/crypto Decentralization of internet, including cryptocurrency platforms, DeFi (decentralised
finance platforms), NFT app providers, and other blockchain app providers
Shipping and logistics Logistics and end-to-end supply chain solution providers (warehousing, inventory
management, etc.) for B2B, B2C, cross-border, and 3PL (third-party logistics)
EV (electric vehicle) Includes auto OEM (original equipment manufacturer), MaaS (mobility-as-a-service),
BaaS (battery-as-a-service), charging infra provider and other similar players
Deep tech Technology based on tangible engineering innovation or scientific advances and
discoveries (e.g., vision and speech algorithms, AI/ML, blockchain, biotech)
PLI (production linked incentive) Scheme that gives companies incentives on incremental sales of products
manufactured in domestic units (e.g., scheme for automobile and auto components)
Leading investors Investors leading on deal value (with $1B+ deal value and 35+ deals in last five years)
or deal volume (with 50+ deals and $500M+ deal value in last five years)
Micro VC/mVC Micro VCs are VCs with funds sizes between $10M–$60M, typically investing in
pre-seed, seed, and Series A deals (follow-on rounds) with cheque sizes <$1.5M
Venture debt Type of debt financing for early-stage companies; complementary to equity financing
for raising capital
PPI (Prepaid Payment Instruments that facilitate purchase of goods and services, conduct financial services,
Instruments) enable remittance facilities, etc. against the value stored in them
NUE (New Umbrella Entity) Alternative mechanism to National Payments Corporation of India, for setting up new
retail payment systems, operating clearing and settlement systems, etc.
VDA (virtual digital assets) Information, code, number, or token generated through cryptographic means or
otherwise and can be transferred, stored, or traded electronically (e.g., NFTs)
NFTs (non-fungible tokens) A non-interchangeable unit of data stored on a blockchain, a form of digital ledger
OTHE R TE RMS
OCEN (Open Credit Framework of app programming interfaces (APIs) facilitating interaction between
Enablement Network) lenders, lending service providers (LSPs), account aggregators and borrowers
ONDC (Open Network for Digital Government initiative for promotion of open networks for all aspects of exchange of
Commerce) goods and services over digital or electronic networks
Crossover funds Investment fund that invests in both publicly traded and privately held companies
D2C (direct to consumer) Selling products directly to customers, bypassing any third-party retailers, wholesalers,
or other intermediaries
Precision farming Farm management concept based on observing, measuring, and responding to
various inter- and intra-field variability in crops
Dry powder Amount of committed but unallocated capital with VC and PE firms for deployment
when attractive investment opportunity arises, or to ease financial distress
SEBI (Securities and Exchange Regulatory body for securities and commodity market in India under the ownership of
Board of India) Ministry of Finance, Government of India
CBDC (Central Bank Digital form of country’s fiat money that is issued by the central bank
Digital Currency)
SMB or SME (small and medium The threshold for investment in small enterprises ranges from INR 1–10 crores, while
-sized business or enterprise) that of turnover ranges from INR 5–50 crores. In medium enterprises, the threshold of
investment ranges from INR 10–50 crores, while that of turnover ranges from INR
50–250 crores
41
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India Venture Capital Report 2023

Sriwatsan Krishnan (sriwatsan.k@bain.com)

Sai Deo (sai.deo@bain.com)

Amanpreet Talwar (amanpreet.talwar@bain.com)

For media queries:

Sitara Achreja (sitara.achreja@bain.com)

Copyright © 2023 Bain & Company, Inc. All rights reserved.

India VC deals landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Key investment themes in 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Investor base and fund-raising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Perspectives on exits landscape . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Key shifts in the start-up ecosystem over 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

2023+ look ahead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

“While macroeconomic factors drove the slowdown in funding

“Through our investments in Citymall and Apnamart, we have seen

“Micro VCs fill a critical gap between the slightly unorganised

“For the start-up ecosystem, 2022 will be remembered as the

“India is one of the most dynamic markets in the world for

Significant dry Exit momentum Regulatory Rough waters

Source: Bain & Company

Caution in investing momentum globally was driven by broader macroeconomic uncertainty

• Large consumption opportunity: Sizeable middle class with large working-age

Decline in investments reflected a few key trends:

Overview of global VC investments ($B)

501 India VC activity softened significantly

Figure 4: However, India demonstrated significant resilience to global headwinds as structural

Large Digital accelerators: Fiscal and monetary “China + 1”

Annual VC investments in India ($B) Number of deals

Maturing market Growing optimism Covid-19 inflection Recalibration

Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge

Annual VC investments in India ($B, split by quarter)

Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge

Annual VC investments in India ($B)

14.4 38.5 1.7 -14.5

Average deal value $12.4M 2.0x $24.9M 0.6x $16.0M

Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge

Number of VC deals in India Average VC deal size in India (in $M)

Growing Covid-19 Recali- Growing Covid-19 Recali-

Sources: Bain & Company; Pitchbook; Venture Intelligence; AVCJ; VCCEdge

Number of VC deals in India

Small ticket size (<$10M) Medium ticket size ($10M–$50M)

Medium-large ticket size ($50M–$100M) Large ticket size ($100M+)

VC investments in India Overview of large-ticket-size deals with $250M+ funding in 2022

ElasticRun SoftBank Shipping and logistics Q1 $332M $1.5B

Number of deals Volume growth

Note: Series D+ includes series D to series K

$25.7B Key deal highlights

Uniphore ElasticRun XpressBees* KFintech

$400M $330M $325M $85M

1 Emerging SaaS hubs in Chennai and Hyderabad anchored

BLR (56%) 3 Unique Tier 2+ market addressability—better understanding

Number of new unicorns* Total number of

305 U.S. China India

2018 2019 2020 2021 2022

• Fintech funding in India remained material—despite global compression in fintech

– EV witnessed 2.4x growth in overall investment value—policy led cost competitiveness

Annual VC investments in India

0.7x Growth EV and logistics saw sizeable

Gaming 0.3x Consumer tech declined more