Funding in India’s tech startup ecosystem in 2023 has been the bottom within the final 5 years, dropping India’s international rating from 4th to fifth place, a brand new report confirmed on Friday. The yr acquired $7 billion in complete funding till December 5, a major decline of 72 per cent, in comparison with $25 billion within the earlier yr.
Only two new unicorns had been created this yr — Incred and Zepto — as towards 23 within the earlier yr and 119 acquisitions as in comparison with 187 acquisitions in 2022, a 36 per cent drop, based on the report by main international market intelligence platform Tracxn. The funding declined throughout all phases, with late-stage funding dropping over 73 per cent, adopted by early-stage funding (70 per cent) and seed-stage funding (60 per cent).
“While the funding slowdown in 2023 presents challenges for the Indian tech startup ecosystem, we remain optimistic about the future. With favourable government policies and a fast-growing economy, we believe India is well-positioned for success in the years to come,” mentioned Neha Singh, co-founder, Tracxn.
Amid the funding slowdown, India has dropped from 4th place in 2022 and 2021 to fifth place among the many highest-funded geographies globally in 2023. The final quarter (This fall) recorded the bottom funding of $957 million thus far, marking it the lowest-funded quarter since Q3 2016.
The decline is primarily as a result of largest drop in late-stage funding, by over 73 per cent to $4.2 billion in 2023 from $15.6 billion in 2022. The variety of $100 million+ rounds recorded had been solely 17, dropping by 69 per cent in comparison with final yr. FinTech, pushed by rising smartphone penetration and authorities initiatives in the direction of a cashless financial system, has acquired $2.1 billion in funding to this point in 2023, a lower from $5.8 billion from the identical interval final yr, mentioned the report.
PhonePe, a number one funds firm, stands out because the top-funded firm within the sector, securing a complete of $750 million in 4 Series D rounds which makes up for 38 per cent of the funding acquired by the sector. Perfios, Insurancedekho, and Kreditbee, are a number of the different top-funded firms within the sector this yr.
The retail sector acquired $1.9 billion in funding, marking a 67 per cent drop in comparison with 2022. Lenskart, with $600 million raised in two Series J rounds, emerges because the top-funded firm within the sector this yr. Despite the general funding slowdown, sectors resembling Environment Tech and HouseTech have garnered investor consideration.
Environment Tech acquired $1.2 billion in funding, whereas HouseTech noticed a 6 per cent enhance with $122 million raised to this point in 2023 caused its privatisation by the federal government. Bengaluru, Mumbai, and Delhi-NCR proceed to draw vital funding in India’s tech startup ecosystem with LetsVenture, Accel, and Blume Ventures, being the highest traders supporting the expansion of the India Tech area.
Source: zeenews.india.com
