In May alone, unicorns like Vedantu and Cars24 fired over 1,200 employees. In anticipation of tough times, several companies have already laid plans to prepare for the worse.Īs per the latest reports, Indian start-ups took to laying off 6,900 employees in the first four months of 2022. Īfter seeing several years of good growth, the start-up inc is now in for a rude shock.
Layoffs may be the only rescue plan for several start-ups. Start-ups have three major costs to deal with – people, technology, infrastructure and marketing and all three sectors at the moment are witnessing heavy cost-cutting. There are few start-ups that have not been able to raise capital in the previous two years, irrespective of which sector they function and hence they too are struggling with funds at the moment. India Inc so far has received $752 million in funding in the month of September however, as compared to August, it is down by 15 per cent, and as compared to the same period last year, it has reduced by 83 per cent.Įd – Tech and gaming, the two sectors that got a lot of traction during the pandemic, are now seeing their growth reach a plateau and, because of the recent stringent measures, are in more trouble than their peers in a different segment. Molbio Diagnostics, 5ire and OneCard made it into the unicorns category Zopper, LifeCell, Jar, DotPe, Vegrow Bigspoon, InsuranceDekho, CUSMAT, Airtribe and Serentica Global made the list of the Soonicorn club. Some more good news came in via 109 start-ups that closed their first funding round, while three start-ups turned unicorns, 39 start-ups got acquired, and two are filing for their IPOs. The ones that got lucky are – five companies that raised funding rounds of over $100 million in the quarter are – EarlySalary, 5ire, InsuranceDekho, OneCard, and BookMyShow, with the most active investors – Better Capital, Venture Catalysts, and Surge. While many are waiting in line in hopes of funding, a few got lucky earlier this year, and for many, things are going to be tough. To further add to the woes, the recent energy crisis in Europe and in the United Kingdom, coupled with the slowdown in the economy of the developed nations and leading from the front is the United States economy, has further increased the chances of a global recession. It also indicates that they are not willing to make large investments, perhaps waiting for market conditions to stabilise.Įxecutives in all major investing companies around the world have adopted a wait-and-watch approach in anticipation that a recession might be on the cards in the near future and hence making preparations to cut costs. The fall in almost all categories related to Indian start-ups indicates that investors are wary of what they invest in and how much. The late stage saw the biggest fall of more than 70 per cent, from $142 million in Q3 2021 to $42 million in Q3 2022. The average ticket size has also seen a slowdown and witnessed a drop across all funding stages.
Indian start-ups have only managed to raise $3 billion in quarter 3, which is also lower at 57 per cent as compared to the previous quarter (Q2) this year. The late-stage funding is seeing the biggest fall, as per reports. It is worrisome days ahead for the start-up ecosystem in India, as reports show that funding has fallen a massive 80%, year on year, in the third quarter, July to September period.
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