Between January to June 2023, Indian startups managed to raise only $5.46 billion (₹44,803 crore), showing a 68% plunge from the $17.1 billion (₹1.4 lakh crore) raised during the same period in 2022, and lower than the $13.4 billion (₹1.09 lakh crore) raised in H1 2021.
What Happened? Per a TechCrunch report, funding for Indian startups took a sharp fall in the first half of 2023 due to wider instability in public markets. Unlike the previous years that saw 18 and 16 new billion-dollar companies in H1 2022 and H1 2021 respectively, 2023 has yet to produce any such ‘unicorns’.
This funding crunch has affected startups at all stages. According to market data, the number of seed funding deals dropped from 936 in H1 2022 and 921 in H1 2021, to only 325 in H1 2023. In comparison, early-stage funding, particularly Series A and Series B rounds, decreased to 108, while late-stage funding slid to just 36 deals.
A lot of doom: Prominent investors like Tiger Global and SoftBank, who were once enthusiastic supporters of Indian startups, have also reined in their investments. In fact, Tiger Global has made only one deal this year, and SoftBank, which invested over $3 billion (₹24,617 crore) in 2021, has refrained from major investments.
Not all gloom: However, there’s a glimmer of hope, as a number of venture capitalist firms in India, including Peak XV Partners, Lightspeed, Accel, Elevation Capital, Matrix India Partners, 3One4 Capital and Blume Ventures, have all raised new and larger funds over the past year and a half. These firms are expected to step up their investments in the coming months.
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