$5.4 Bn Funding, 389 Deals: Indian Startup Funding Dropped By 29% In The First Half Of 2020.

* The Covid-19 economic impact and the lockdown restrictions drove capital inflow to all-time quarterly low in Q2 2020.

* DataLabs has recorded 69% decrease in the average ticket size of investment from Q1 2020 to Q2.

* The economic slowdown and recessionary conditions have shattered the expansion dreams of many Indian startups.

The first half of 2020 ended on June 30 and it was perhaps the worst one for many investors and businesses. Startups, in particular, have been hit hard by the economic upheaval. Compared to the first quarter, the second quarter of 2020 witnessed a shattering decline of 74% in total startup funding in India. This is an indication of the devastating impact the pandemic had on the Indian startup economy.

The adverse impact of the pandemic was not limited to the funding rounds, the Indian startups also had to shed a large chunk of their workforce. The average analysis showed that Indian startups on an average fired 22% of their total employee count during the pandemic-induced lockdown adding more fuel to overall unemployment in India. If the adversity of the pandemic was not enough, India’s rising geopolitical tensions with China have made it more difficult to procure capital from Chinese origin investors, who were indeed an active participant in the ecosystem.

Ref: Inc42