Report: Seed-stage funding for Kerala startups surged by 40% in 2023

• ByStartupStory     |    February 15, 2024

According to the Tracxn Geo Annual Report, Kerala-based startups experienced a significant surge in seed-stage funding in 2023. Specifically, these startups attracted $26.2 million in seed-stage investments, marking a 40% increase from the previous year’s $18.7 million. Notably, Avaana Capital Advisors, 9Unicorns, and Huddle emerged as the most active investors in seed-stage rounds, as highlighted in Tracxn Technologies’s Kerala Tech 2023 report.

Despite the overall increase in funding, early-stage funding saw a decline of 32% to $7 million in 2023 from $10.3 million in 2022. Additionally, the Kerala startup ecosystem did not record any late-stage funding in the past five years. Among the various sectors, there was a remarkable 266% spike in funding for Food & Agriculture Tech-related startups, reaching $7.4 million in 2023 compared to $2 million in 2022. However, funding in the ed-tech sector decreased to $3.47 million in 2023 from $7.2 million in 2022.

The city of Kochi led in funding, accounting for 87% of the total funds raised in the state. Kochi-based startups secured $29 million, followed by Alappuzha with $4 million and Thiruvananthapuram with $709K. In terms of acquisitions, the Kerala tech startup ecosystem witnessed six acquisitions in 2023, an improvement from the previous year’s two. Notable acquisitions included Physics Wallah acquiring Xylem Learning for $61 million and Radiant Cash Management acquiring Kochi’s Acemoney.

Reflecting on Kerala’s startup landscape, it currently stands at 11th place among other startup ecosystems in India, with a total funding of $354 million to date. The Government of Kerala has played an active role in supporting the startup ecosystem through initiatives such as the Kerala Startup Mission (KSUM).

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