Global headwinds to hit startup funding: Bain & Co.

Despite headwinds, emerging sectors like Web3, crypto and blockchain-based technologies, healthtech and agritech are likely to see investor traction. An unstable macro environment sure poses risk to the startup growth momentum but analysts continue to bet on the overall potential of the ecosystem. A slew of fresh entrepreneurs and companies are trying to build new business models, devise new solutions to cater to the masses. A lot of startups are attempting to address issues specific to tier one, two, three cities or what experts call the ‘Bharat problem’.

“These problems are local in nature and do not necessarily have global equivalents, but the business models they are creating could later have some applicability globally. That will continue to be a focus for early stage startups and such ideas will continue to see investor interest,” they say.

The wider investor landscape has also evolved. 2021, for instance, saw newer investors making significant inroads — tier one global VCs such as TCV and Dragoneer Investment Group made several large investments. Domestic VCs like 3one4 Capital, Gemba Capital and Together Fund scaled presence while sovereign funds such as ADQ and QIA made direct investments into the market as late-stage investors.

“Several sector-focused funds increasingly doubled down. Finally, traditional PE funds also stepped up focus on growth equity deals, with the marquee deals being the Warburg Pincus-led investment in The Good Glamm Group, ChrysCapital’s investment round in Dream11, and the KKR-led investment in Lenskart,” analysts said in the report.