About 55% of early-stage investors said that startups were overvalued in 2022, according to a report from InnoVen Capital.
The report was prepared based on inputs from 20 venture capital funds, such as Blume Ventures, IndiaQuotient and Omnivore, among others.
The outlook on valuations being hyped jumped from 25% of investors believing so in 2021 to 55% in 2022, according to the report.
Amid the funding winter in 2022, about 45% of investors surveyed said the investment environment during the year was less competitive as compared with 2021. Market dynamics changed significantly in the second half of 2022, with less competition for deals, the report said.
The report also mentions several cases of governance issues seen in the startup ecosystem in the last couple of years.
Around 80% of investors expect that the investment activity in 2023 will be at a slower pace than last year. However, only 10% believe that the slowdown will be severe.
Sectorally, however, over 50% investors picked the top three areas for investment in 2023 as climate tech, financial technology and software-as-a-service.
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