Indian Startup Funding Faces Decline with 38.6% Drop in VC Deals in 2023: Report

• ByStartupStory     |    November 28, 2023

India has experienced a notable decline in venture capital (VC) funding deals, with a total of 920 deals reported during January-October 2023. This represents a 38.6% decrease compared to the 1499 VC deals recorded in the same period of 2022, as detailed in a report by GlobalData. The corresponding VC funding value witnessed a substantial drop of 67.1%, falling from $19.2 billion in January-October 2022 to $6.3 billion in January-October 2023, according to the data and analytics company.

Aurojyoti Bose, Lead Analyst at GlobalData, remarked, “2023 so far has been a challenging year for Indian startups seeking to secure VC funding as investors go slow on deals with growing concerns around several homegrown startups such as Byjus.” The significant decrease in funding value suggests that VC firms are exercising caution in making substantial investments, posing challenges for startups in raising capital.

Despite the challenges, India maintains its position among the top five markets globally for VC funding activity. It accounts for 5.4% of the total number of VC funding deals announced between January-October 2023, with its share of the corresponding disclosed deal value reaching 3.1%. India plays a crucial role in the Asia-Pacific (APAC) market, closely trailing China in both volume and value of venture capital funding deals.

GlobalData’s Financial Deals Database reveals that India has witnessed several venture capital funding rounds surpassing $100 million in 2023, signaling resilience in the entrepreneurial spirit. Noteworthy deals include PhysicsWallah securing $250 million, Perfios Software Solutions raising $229 million, PhonePe obtaining $200 million, Zepto securing $200 million, and Zetwerk raising $120 million.

“The ability to secure noteworthy funding rounds exceeding $100 million signals a resilient entrepreneurial spirit, showcasing the enduring attractiveness of India’s startup ecosystem, even amid cautious investor sentiment,” concluded Aurojyoti Bose.

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