Uptick In Seed & Series A Investments In Q4fy22 Even As Funds Dry Up For Late Stage: Venture Intelligence Report

Despite a looming funding winter, the early-stage funding environment in India continues to be vibrant. Seed and Series A investments were up by 88 percent and 22 percent respectively in Q4FY22, according to a report by Venture Intelligence.

The data showed that 250 companies raised Series A investments during 2021 – up 75 percent from 142 companies in 2020. The report highlights how 2,863 companies raised Seed investments during the 2015-2021 period.

According to the report, between 2018 and 2021, Sequoia Capital (88 deals) was the most active Seed to Series A investor in terms of the number of deals, followed by Axilor Ventures (49), Accel India (48), 3one4 Capital (41) and Blume Ventures (39).

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Of the 2,848 companies that raised Seed investments during 2015-2021, only 18.1 percent (516 companies) progressed to the Series A Round.

From those 516 companies (that raised Seed and Series A rounds during 2015-2021), 174 companies (33.7 percent) went on to raise the Series B round. Of the 174 companies, 76 companies (43.7 percent) went on to raise the Series C round.

Almost a third of the companies that raised a Series C round (32.9 percent or 25 companies) managed to raise subsequent rounds during the period of study, the report added.

“Series A is the crucial link between a vibrant seed stage and a mature late-stage VC ecosystem. But there is very little data on this. This report by VI is a timely spotlight on an important metric that founders and investors should pay more attention to,” said Ganapathy Venugopal, CEO of Axilor Ventures.

As per the Venture Intelligence data, B2C startups which accounted for 54 percent of Series A investments, were preferred over B2B firms in the 2015-2021 period. Meanwhile, e-commerce was the most preferred sector for investments during the 2015-2021 period, followed by SaaS, fintech, healthcare and food and beverages (including D2C brands).