Amid funding winter in 2022, Sequoia Capital led venture capital investments in India this year, completing 71 deals as of November, data from market analytics platform Venture Intelligence showed. Last year, the VC firm completed 103 deals.

Despite the challenging market conditions globally, the firm maintained its leading position in recent years through its focus on early-stage venture and growth deals in India and its accelerator programme, Surge, which incubates and funds fledgling startups.

Some of Sequoia’s investments in 2022 include live video and audio platform Dyte, fintech startup Hubble, healthcare provider Kenko Health, climate-focused firm Climes, influencer platform Rigi.Club, and B2B sales and intelligence platform Apollo.io.

VC Investments 2022

In general, VC firms faced a funding crunch in 2022, leading them to reduce their bets on the Indian startup ecosystem. In 2022, until the end of November, VC firms closed 1,075 deals in India, compared with 1,212 transactions in the same period the previous year.

The year also saw a significant decrease in deal sizes despite a smaller drop in the number of transactions due to a decline in late-stage funding activity. Because of this, VC investments fell about 34% in size to $23.2 billion in 2022 (as on 30 November) from $35.4 billion in the same period the previous year.

Until November, Accel invested in 54 startups in India, maintaining its position as the second most active VC firm in India but closing 19% fewer deals this year. 

As per Kashyap Chanchani, co-founder of The Rain Maker Group, a technology-focused investment bank, deal flow is expected to improve in 2023 from the current year but will not reach 2021 levels.

Chanchani said,

“There aren’t major recession worries in India, and the inflation numbers for the US have also improved. So, largely, it is expected that towards mid-year (2023), there should be more business-as-usual. (However,) deals won’t be anywhere close to what we saw last year or the former half of this year.” 

Last month, Accel India, as part of the second cohort of the Atoms Programme, selected 10 startups. In March, Accel also announced its seventh India- and South-East Asia-focused fund with a $650 million corpus.  Better Capital, a Pune-based VC firm, stood third in the list of most active investors in 2022, with 52 deals this year.

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