The Fiscal Landscape 65.8% Drop: Jan to Dec A Deep Dive into the Shifting Tides of Indian Startup Funding in 2023

By Ritwik Ghosh,Kolkata India

Shifting Tides of Indian Startup Funding in 2023

In the period spanning January through November 2023, Indian startups experienced a substantial decline of 65.8% in funding, as reported by GlobalData. Noteworthy venture capital (VC) transactions this year featured PhysicsWallah securing an impressive $250 million, Perfios Software Solutions obtaining $229 million, PhoinePe and Zepto each acquiring $200 million, and Zetwerk securing a substantial $120 million.

The shifting tides of Indian startup funding during the specified timeframe was disclosed in a Times of India report, indicating a noteworthy 73% contraction in 2023. In light of this, it raises the question of the strategic choices model companies can now adopt.

Drawing from GlobalData statistics, Indian startups amassed a total of $6.9 billion through 1,013 VC funding deals over the past 11 months. This marks a stark contrast to the previous year when startups garnered a staggering $20.2 billion during the same period.

GlobalData’s insights further revealed a significant 67% decline in Venture Capital funding in India from January to October this year. The top VC funding transactions in the Indian startup landscape included PhysicsWallah’s $250 million, Perfios Software Solutions’ $229 million, PhoinePe and Zepto’s respective $200 million, and Zetwerk’s $120 million. Additionally, the year saw a mere 17 instances of $100-million-plus funding, a stark drop from the 55 recorded in the preceding year.

In the prior year, Indian startups reached the noteworthy milestone of securing over $10 billion in VC funding within just four months. However, the landscape shifted, prompting a reflection on what entrepreneurs can anticipate from FM Sitharaman’s interim Budget for 2024.

Contrasting with the US startup ecosystem, which witnessed 6,307 VC deals amounting to $104.5 billion this year, India contributed a mere 5.5% to the global deal count during this period. Analysis from GlobalData’s Financial Deals Database highlighted a 38.4% decrease in VC funding volume, totaling 1,644 deals between January and November.

A retrospective of 2023 reveals an enduring winter of funding for Indian tech startups, with major hubs like Bengaluru, Mumbai, and Delhi-NCR also experiencing a downturn in attracting substantial funding. The unicorn count in India dwindled significantly, welcoming only two newcomers—Incred and Zepto—compared to the 24 additions in 2022.

With a cumulative funding of less than $10 billion for tech startups in the country this year, India slid to the fourth position among the world’s highest-funded tech startup regions in 2023. This marks a decline from the third position held in the previous two years, with India now constituting nearly 4% of global fundraising, while China, securing the third spot, commands a 6% share

Except for the headline, this story has not been edited by Foundr Magazine India and is auto-published from a syndicated feed

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