With 485% jump in funding, Hyderabad, Pune, Chennai emerges as rising Startup Hubs
- ByStartupStory | April 16, 2022
The startup ecosystem showed its tenacity by raising $42 Bn in funding during the year and creating 42 unicorns in the process, while 2021 was the year right after the onset of the Covid-19 pandemic.
For the startup ecosystem, 2022 has been nothing short of a graduation exam. As per the data, more than $11.8 Bn has been raised by Indian startups, across 506 funding deals in Q1 2022. Essentially, in the first three months of 2022 as against the first quarter of 2021, funding grew almost 186% and deal counts soared by a mammoth 64%.
By breaking at least some of the dominance of the top hubs like Bengaluru, Delhi NCR and Mumbai, the smaller startup hubs emerged as the head turners of the ecosystem during the quarter.
They accounted for a lower 78% of the total funding (around $9.1 Bn) in Q1 CY22, while the top three startup hubs – Bengaluru, Delhi NCR and Mumbai – commanded over 90% of the funding in Q1 CY21.
With over $5.7 Bn being raised across 163 deals, Bengaluru held the crown of India’s rising Silicon Valley, yet again. While startups in Mumbai accounted for 77 deals, taking their tally to $1.4 Bn, Delhi NCR was at the second spot by bagging $1.9 Bn in funding across 123 deals.
However, increase in deal count and funding amount, Hyderabad and Pune surprised the ecosystem with a 329% and 653% year-on-year (YoY), respectively.
About $788.7 Mn has been raised by Pune-based startups in total funding across six deals, in the first quarter of CY21 up from $90 Mn across 10 deals. By Xpressbees’ and ElasticRun’s $300-Mn rounds each, the amount was largely led. Taking the city’s contribution to the country’s close-to-a-century unicorn club to six, the duo also crossed the $1 Bn valuation benchmark.
For an IPO in CY22 Pune-based FirstCry is set to go and in April 2022, it will file its draft prospectus.
From Pune, the average funding ticket size of startups stood at $98.6 Mn, whereas RocketAI’s $1.2 Mn seed round was the lowest ticket size.
From GEM and HRtech startup Darwinbox raised $72 Mn in a unicorn making funding round from TCV, Endiya Partners, Salesforce Ventures, Sequoia India, Lightspeed India, 3One4Capital, JGDEV and SCB 10X, a $200 Mn capital commitment was secured by AIoT and EV OEM startup Smarton. Hyderabad’s entry into the coveted unicorn club was also marked by DarwinBox
Taking Hyderabad-based startups’ average ticket size to $12.68 Mn, of the 30 rounds, 10 deals ranged from $1 Mn to $10 Mn and seven deals were of less than $1 Mn,.
India’s startup ecosystem is most concentrated in the top three cities – Bengaluru, Delhi NCR and Mumbai – growing at an average of 127% YoY, while there have been calls to bring the startup ecosystem to Tier 2 and 3 cities.
After raising $400 Mn in funding at a valuation of $2.5 Bn in February 2022 from NEA, March Capital and others, conversational automation startup Uniphore became the eighth unicorn of 2022.
On the other hand, after raising $137 Mn in its Series B funding round led by Insight Partners, Fintech startup CredAvenue joined the unicorn club. Further, the closure of a $250 Mn funding round led by Tiger Global and Sequoia Capital was announced by Chennai-based subscription management unicorn Chargebee.
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