India, January 9th, 2023: Strengthening its position as the most reliable ally for aspiring leaders, SCOPE, a new-age holistic platform for budding entrepreneurs, venture capitalists, investors, and industry experts, has released a report on emerging trends in the startup ecosystem. The report, with several insightful details, aims to provide much-needed information and technical knowledge required to stay afloat in the fast-evolving business landscape. The report is based on the user trends available on SCOPE’s internal platform.
A decline in funding amidst global economic slowdown: There has been a gradual decrease in funding since 2020. The dip solidified and was most apparent in the second quarter of 2022. Wherein investors were particularly weary of late-stage funding projects. The funding, at 120 billion dollars, stood at the lowest for a single quarter since 2021.
The funding for the second quarter (2022) fell by 26% from that in the first quarter, which was 162 billion dollars. The second quarter of 2021 recorded funding equivalent to 165 billion dollars. This dropped by 27% in the second quarter of 2022.
However, one must bear in mind that the decline is in comparison to the year 2021, so it can be regarded as a stellar year for startups and funding received. The figures in 2022 are still higher when compared to those in 2020.
Startup domains most popular among investors: Even amidst the funding slowdown in 2021, all is not lost for aspiring entrepreneurs. According to data collected on the SCOPE app, ventures in AI, Web 3.0, Life sciences, Digital Health, Autonomous Transportation, and Cleantech are attracting investors.
Private investment in the AI sector amounted to 135 billion dollars in 2022. Even after the 36% cut down, this is still a lucrative sector in terms of its growth potential and the funding received.
Although ambiguity surrounds Web 3.0, it has emerged as the most sought-after sector for investment by VCs and has attracted funding of 23 billion dollars globally. Similarly, digital health startups received 10.4 billion dollars in the first quarter of 2022. This segment has emerged as the hot favourite for VCs and institutional investors.
Despite the 80% decline in investments and a loss of 40 billion dollars in stocks, the autonomous transportation sector remains an attractive option for investors. Following closely is the Greentech industry, which is expected to reach a market size of 28.9 billion dollars. The significant applications of this sector are in blockchain and endeavours to reduce carbon footprint and emission levels.
The analysis proffered by SCOPE: The mentioned sectors, especially AI and Web 3.0, are in nascent stages and considering the volatility associated with the market and the looming recession in 2024, one needs to question their potential for sustenance. These industries are highly capital-intensive, and investing in them might be too risky. The better investment choice would be the impact startup sector or the future of work for the startup segment.
Speaking of the report launch, Appalla Saikiran, Founder and CEO of SCOPE, said, “In the current economy, information and intelligent decision-making is the most potent ammunition in the quiver of entrepreneurs to tackle, with the uncertainties and fluctuation associated with the market. SCOPE has always tried to educate those in the field, and this report is one such endeavour. Hopefully, it will serve as an indispensable guide for those who are willing to invest in the startup ecosystem in India.”