The ‘funding winter’ seems to have exacerbated the Indian startup ecosystem, with funding to the country’s vast number of startups posting a whopping 77 percent plunge in the first seven months of 2023 from the same year-ago period.
Indian startups recorded $4.4 billion in private equity and venture capital (PE/VC) funding in the January-July period, down from $19.3 billion a year ago, according to data shared by Venture Intelligence, Moneycontrol reported.
India’s startup funding dilemma
Startups in India secured only 344 funding deals in this period, against 821 in the first seven months 2022, data showed.
In July alone, startup funding in the country shrunk to just $523 million from about 42 funding rounds from $2.6 billion invested across 77 funding rounds in the year-ago period.
While the funding amount plunged close to 80 percent year-on-year in July 2023, the number of deals also fell close to 45 percent compared to the same month in the previous year, according to the Venture Intelligence data.
The data, however, pertained to the funding deals that were announced till July 25.
Significantly, the funding crunch comes amid many venture capitalists and startup founders warning about the overestimation of India’s internet market, which seems to be slowing post the pandemic-led boost.
Peak XV Partners (previously Sequoia India) led the charts of investors, making about 21 deals in the first seven months of 2023.
Blume Ventures, which signed 16 deals, pushed Accel India to the third rank with 12 investments this year.
Others on the list of most active investors included Rainmatter Capital and Lightspeed Ventures with 10 investments each.
The top deals of 2023 so far included a $500 million fundraising by eyewear brand Lenskart, followed by Builder.ai with a $250 million fundraising.
Infra.Market, Zetwerk and InsuranceDekho also raised $150 million each.
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