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We are almost midway through 2016 and industry experts have already started pouring in with their predictions for the year.

A report by a financial research platform, VCCEdge has predicted that about 1,000 startups may get funded by the end of this year. The figure has been predicted on the basis of the 255 deals that have been finalised till mid-April, 2016.

The Startup funding deals for first quarter of 2016 wrapped up at a decent $301 million. However, the figure the previous year for the same period was $611 million. According to experts, this 50% decline in startup funding hints that 2016 might end up as a year of consolidation with early-stage investors having a tight control on their purse strings and startup valuations getting considerably trimmed.

While the startup funding deals have reduced by almost half, the startup funding deal volume has somehow remained fairly unchanged, with 234 transactions in January-March 2016 as against 232 deals in 2015 during the same period.

"The deals data indicate that investors are clearly waiting on the sidelines by consolidating their existing portfolios and looking at only meaningful ones in those ventures with strong fundamentals and a good revenue earning model, " said Nita Kapoor, Head (India) New Ventures, News Corp, and CEO, The VCCircle Network, while speaking to a national economic daily.

Further, Kapoor also threw light on how the current decline in series A deals or the first institutional level of venture funding for startups is something that needs to be taken seriously. She stressed on the need for startups to turn towards the 'Conserve and Grow' strategy immediately in order to save themselves from the slump that is expected to hit the startup market in the near future.

While the numbers are stagnant and decreasing on various fronts for the startup industry, its share in the overall private investment pie is still green and going strong. Taking in account the volume, startups contributed for about 70% of the transactions in the year 2015, a figure which was 62 % more than what it was for the year 2014.

It is important to note that according to the VCCEdge report, a startup is a company that has raised an angel or seed-stage funding, or a Venture Capital round A or round B over the period of last 5 years.

Let's see if the 1000 figure predicted by VCCEdge matches the year end figure. We will keep you updated.

[Top Image - Shutterstock]

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