Tuesday, April 16, 2024

It’s startup funding winter, not doomsday - Rest of World

Last updated Tuesday, January 10, 2023 21:05 ET

The global funding slump has been front and center in conversations across startup ecosystems in South Asia. But many believe it’s only temporary.
Words like “layoffs,” “shutdowns,” and “funding crunch” have become synonymous with the tech startup world in recent months. As data about startup funding in 2022 trickles in, these trends have only been reinforced.
In 2022, startup funding in India fell by 40% year on year, according to Inc42’s startup funding report. Pakistan’s startup funding fell to $15.15 million during Q4 of 2022, making it the worst quarter since Q1 of 2020, according to Data Darbar, a Pakistan-based data intelligence platform.
These figures must make entrepreneurs across the region nervous and anxious. But some early-stage investors I spoke to last week gave me hope.
Yagnesh Sanghrajka, co-founder and chief financial officer of seed-stage venture capital fund 100X.VC, said that what’s happening right now is partly a correction after the euphoria of 2021 and early 2022, when many Indian startups raised back-to-back funding rounds, with their valuations increasing substantially each time.
“In every [business] cycle, there are corrections that happen, and this correction cycle is being called funding winter,” Sanghrajka said. “But it’s a winter, right? It’s not doomsday! So after winter, you always get sunshine.”
Kalsoom Lakhani, co-founder of Pakistan-focused VC fund i2i Ventures, also thinks that not all hope is lost. “In 2023, the funding slowdown will...

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