Amid a funding crunch, mergers and acquisitions in the Indian startup industry have been on the rise since the beginning of 2016, according to startup data curation firm Xeler8.

In July-September, merger and acquisition activity increased 35% quarter-on-quarter with 65 such deals.

“Many startups are struggling to raise funds, so they are willing to get acquired rather than just shutting shop,” said Rishabh Lawania, founder of Delhi-based Xeler8. “In fact, a lot more startups are getting acquired than what is being publically reported. Many entrepreneurs are looking to cut losses and sell their ventures, even if it means a simple acquihire (buying a company for the skills of its staff rather than the product) where they get a job at another company.”

The poor investor sentiment has led to a significant correction in startup valuations. In many cases, they have almost halved since July-September 2015, Lawania said.

Another reason for the uptick in mergers and acquisitions is that several late-stage startups are looking for buyouts to justify their valuations. “Many big players are looking for inorganic growth opportunities as they try to show that they are doing something great,” Lawania said.

Some of the prominent merger and acquisition deals during the three months ended September were the acquisition of Hyderabad-based machine learning startup TupleJump by Apple Inc, and Redbus’ buyout of Peru-based online bus ticketing platform Busportal.

The most valued mergers and acquisitions during July-September were:

Sectors such as hyperlocal, finance technology (fintech), and healthcare saw the most number of merger and acquisition deals.

Venture-capitalist investments into Indian startups fell for a third consecutive quarter during July-September, according to Xeler8’s data.

The number of funding deals, too, declined to 295 in July-September, from 310 in April-June and 344 in January-March.

With investor sentiment unlikely to improve in the near-term, Xeler8 expects mergers and acquisitions to continue to rise among Indian startups for at least two more quarters.