Funding in Indian startups sinks to its lowest since 2017
Funding to Indian startups fell steeply in calendar year 2023 to $7 billion — less than one-third the estimated $25 billion received in the previous year, industry data showed.
This marks a seven-year nadir for the sector since 2017, amid a worsening global macroeconomic environment buffeted by geopolitical conflicts.
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Offering CollegeCourseWebsiteMITMIT Technology Leadership and InnovationVisitIIM KozhikodeIIMK Advanced Data Science For ManagersVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisitPointing to a deepening of the ‘funding winter,’ equity investment received by new-age ventures in the fourth quarter of 2023 was the lowest since the dismal showing in the third quarter of 2016, research platform Tracxn data as of December 5 showed.
Several startups have also shut shop in 2023, includingbuy-now-pay later online lender ZestMoney, upskilling edtech company Frontrow and fintech platform Akudo.
“There will be more casualties in the startup ecosystem as funding is still hard to come by in growth- and late-stage companies. Business models that were contingent on frequent capital raises will find it hard to survive,” said Siddarth Pai, founding partner, 3one4 Capital. “The VC (venture capital) playbook has been rewritten for the high interest rate environment as operational cash flows trump the growth-at-all-costs mindset.”
Fintech, retail and enterprise applications (includes software-as-a-service) were top sectors attracting capital this year.
Only Two New Unicorns
Only two new unicorns (over $1-billion valuation) were minted — quick commerce startup Zepto ande-lender Incred. This is compared to 23 in 2022, a 91% drop, and
