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Also in this letter
■ Edtechs account for 44% of layoffs in startup space this year
■ Instacart cuts internal valuation to $10 billion
■ A tumultuous 2023 awaits fintech startups
Programming note: ETtech Top 5 will be taking a short break as another crazy, busy year for tech news, comes to an end. We will be back with a brand new edition of the newsletter on January 2, 2023. Hope you have a relaxing few days of the year. Happy Holidays to you and your loved ones.
2022 Year in Review: Top technology & startup news we covered this year
The technology space had a bumper 2021 owing to the pandemic-driven boom for digital platforms offering various products and services, stock market listings of new-age firms, and big-ticket funding rounds from prominent venture capital firms and even private equity funds leading to a record number of unicorns in a single year.
The year 2022 has been a reality check after the euphoria of last year and many fortunes have changed during the course of the year. The startup funding winter triggered by the war between Russia and Ukraine along with rising interest rates in the US pushed the sector into trouble, which was further exacerbated by soaring inflation and looming threats of a global recession.
At ETtech, we were on top of his change being played out in India and here is a list of ETtech’s top technology and startup stories in 2022.
Edtechs account for 44% of layoffs in startup space this year
The ongoing ‘funding winter’ and business challenges faced by new age internet companies have resulted in nearly 18,000 job losses so far this year, data compiled by executive search firm Longhouse Consulting showed. The data was shared exclusively with ET
By the numbers: In total, 52 startups fired 17,989 employees spread across edtech, consumer services, ecommerce, health tech, logistics, fintech, enterprise tech, media and entertainment, agri-tech and cleantech.
Bloodbath in edtech: Of this, about 44% of the layoffs occurred within 15 edtech companies – Byju’s, Unacademy, Vedantu, Byju’s-owned WhiteHat Jr and Toppr, Practically, FrontRow, Lido, Invact Metaversity, Yellow Class, Teachmint, Lead, Udayy, Crejo.Fun and Eruditus.
Udaan sees maximum top-level exits in 2022, followed by Ola
Udaan saw the most senior-level exits of any company across India’s tech and startup ecosystem this year. It was followed by Ola and Oyo Hotels & Homes, according to data shared with us by Longhouse Consulting.
Mass exodus: At least 50 top executives – ranging from C-suite to category and business heads – left Udaan in 2022, as the company grappled with funding and business-model issues, even as two of its founders stepped back from active roles over the course of the year.
Super app fail: Ola, on the other hand, saw 21 exits of key executives in a tumultuous year, during which it shut down several businesses including grocery, food and used cars as attempts to build a super app failed.
Instacart cuts internal valuation to $10 billion
Grocery delivery startup Instacart has cut its internal valuation to $10 billion, according to a report by news website the Information. The company, whose new valuation is 20% lower from $13 billion in October, has been cutting its valuation this year, beginning with a 40% reduction in March.
Market volatility: The firm was valued at $39 billion last year, as surging infections boosted doorstep deliveries, but the recent cuts in its valuation underscore the effects of public market volatility on high-flying private companies.
IPO postponed: The startup also delayed its much-awaited IPO this year amid market uncertainty. Instacart has in May announced that it confidentially filed for an initial public offering (IPO) with US securities regulators.
A tumultuous 2023 awaits fintech startups
The operating environment is expected to get tougher for Indian fintech startups next year amid a worsening funding winter and regulatory changes over the past few months, multiple founders and investors told us.
Headwinds: With the regulatory overhang on fintechs continuing, and the Reserve Bank of India (RBI) taking steps to regulate various aspects of the sector, investors are expected to remain selective in their approach, leading to potential consolidation in the coming months, these people said.
Funding drop: According to data sourced from research firm Tracxn, funding in the Indian fintech ecosystem almost halved to roughly $5.7 billion in 2022 from $10.3 billion in 2021.
However, investments in Indian fintech this year are still significantly higher than in 2020, when the sector garnered just $2.02 billion in equity funding.
Today’s ETtech Top 5 newsletter was curated by Megha Mishra in Mumbai and Erick Massey in New Delhi. Graphics and illustrations by Rahul Awasthi.
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