A study titled "Tracxn Geo Semi-Annual Report: India Tech- H1 2023" found that funding for Indian startups fell by 72% during the first half of 2023 when compared to the same period last year. Startup funding in the nation totalled $5.5 billion from January to June (H1) of this year.
Despite being ranked among the top three funded geographies in the world after the United States and the United Kingdom, the study also noted for the first time that the Indian startup funding trend shows a global decline, according to CNBC.
Number of New Unicorns in India Declines in H1 2023
The overall number of rounds of business funding for startups in the Indian startup ecosystem decreased in H1 2023 as well. In lieu of 946 in H2 2022 and exceeding 1,500 in H1 2022, there were 536 funding opportunities in H1 2023.
Neha Singh, co-founder of Tracxn, claims that India's startup ecosystem has enormous growth potential and that the country's economy is still among the fastest-growing in the world.
According to a company statement cited by CNBC, "The rise in this sector can be contributed to the growing Electric Vehicles (EVs) sector across the entire nation, which is driven by rising EV adoption and supportive government initiatives promoting cleaner mobility."
The report stated that in addition to funding, India saw a decrease in the number of new unicorns in the first half of 2023. It also stated that IPV, Accel, and 100X.VC are among the top investors so far in 2019.
A shortage of funding for start up businesses has already forced layoffs and delayed stock listings at Indian startups. It is anticipated to worsen and almost certainly lead to industry consolidation. According to V T Bharadwaj, the present managing partner of venture capitalist A91 Partners and a past managing director of Sequoia Capital India, it is a fundamental reset, not just a different blip.
As quoted by ANI, he continued, "I am sceptical that I'll again see a record fund-raising year like 2021 for at least a decade.
High stock market valuations and listing prices for tech companies led to significant financial gains for investors. The market for cryptocurrencies was also booming. But as interest rates rose, stock market valuations fell along with them, and in the course of the second half of 2022 and into 2023, the cryptocurrency markets crashed.
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