Investment

Startup investments slashed by half in 2023 compared to prior year

• ByStartupStory     |    January 2, 2024

During a funding slowdown in India’s startup scene, angel investors maintain momentum while overall investments dwindle. While startup deals decrease, active angel investors persist in funding fledgling firms, bucking the trend.

We Founder Circle (WFC), based in Mumbai, tops the chart as the most active angel investment platform for the second consecutive year in 2023, marking an increase to 82 investments from 71 a year prior, according to Tracxn data.

Neeraj Tyagi, CEO of WFC, highlighted their vision: “Our vision is to create a multi-stage global investment framework to encourage innovation and ideas from a pre-seed stage to a growth stage.”

Launching the startup marketplace platform Invstt.com earlier in the year enabled WFC to invest in approximately 100 startups and introduce two angel funds. Tyagi outlined their plans for the coming year: “In the coming year, we will be investing in at least 200 startups and catalyze their growth through our multiple funds.”

Following WFC, Gurugram-based Inflection Point Ventures (IPV) and Mumbai Angels ranked second and third in terms of active angel networks in 2023. IPV invested in 47 startups compared to 53 in 2022, while Mumbai Angels closed 18 deals compared to 31 the previous year.

While angel investors ramp up their activity, overall startup funding in India plummeted by 72% year-on-year, reaching a seven-year low of $7 billion in 2023, contrasting sharply with the $25 billion raised by startups in the previous year, as per Tracxn data.

Ankur Mittal, co-founder of IPV, sees opportunity in the downturn: “We think this is the best time to invest, when good businesses run by strong founders are available at attractive valuations.”

Nandini Mansinghka, CEO of Mumbai Angels, expressed plans for substantial deployment: “In the next three-four years, we are targeting to deploy Rs 500 crore per annum to build an overall portfolio of over 500 companies.”

Despite economic uncertainties, investors remain optimistic about innovative Indian startups. Emerging technologies like AI, blockchain, and IoT are fueling enthusiasm, with startups foreseeing investor favor by demonstrating innovation, disruptive tech, and a clear path to profitability in the coming year.

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