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New Delhi, July 25 (IANS) India’s venture capital-backed companies have been focused on preserving cash in anticipation of funding becoming less readily available over the coming quarters and with venture capitalists demanding companies that ‘they strengthen their path to profitability and reduce their consumption of cash.
According to a KPMG report, venture capital investments in India fell in the second quarter of 2022, partly due to global geopolitical uncertainties and rising inflation.
While venture capital investment in India may be subdued over the next couple of quarters due to the global shrinking money supply and other factors, the country should remain quite attractive for mid-term venture capitalists. and long-term due to its relatively positive macroeconomic environment. and market demographics.
Regarding India’s findings, Nitish Poddar, Partner and Country Leader, Private Equity, KPMG India, said, “In India, funding has not dried up yet, but many startups are taking proactive steps to reduce their cash burn, given rising federal interest rates, the geopolitical crisis, and other ever-evolving issues.Because they anticipate difficulty in raising funds and expect the Investors are increasingly asking for pathways to profitability and better cash conservation, they are doing what they can to improve their operating position now so they can potentially avoid drastic changes later.”
According to the report, venture funding in India exceeds $6.5 billion for the 4th consecutive quarter. Fintech remained the hottest investment area in India during the quarter, alongside e-commerce, social commerce and gaming.
Agritech also attracted an increasing number of deals in Q2’22; while the majority of these deals have taken place at very early stages, the space is expected to see deal sizes increase as the industry evolves.
Updated: July 25, 2022