Indian startup funding shrinks by 73% in 2023. What model companies can adopt now?
equity investment received by new-age ventures since the terrible performance in the third quarter of 2016 Indian startups raised $1.5 billion between July and September this year, Tracxn Geo's quarterly report said, adding that the number was about $957 million in October and November 2023, CNBC TV reported. The report stated that LetsVenture, Accel, and Blume Ventures have been the top active investors in 2023 to date.
As per the Economic Times reports, fintech, retail, and enterprise applications were the top three sectors that attracted capital this year, and only two unicorns were minted. Tushar Dhawan, Partner, Plus91Labs stated that the reminiscent dip in investment activity from 2016 is particularly harsh for companies navigating their growth stage and the closures of ZestMoney and Frontrow epitomize the hurdles faced by models heavily reliant on capital injections.
“Companies must adapt to leaner models, optimizing cloud resources for cost-effectiveness. The move from unchecked growth to operational cash flows aligns with a cloud-centric strategy, emphasizing scalable solutions that mitigate financial strains," Dhawan told LiveMint.
Entrackr reported that a total of 20 Indian startups have raised $130 million in funding from December 4 to December 9, including four growth-stage deals and 14 early-stage funding deals. The closures of ZestMoney and Frontrow serve as examples of the struggles faced by models that heavily rely on capital injections, said Ashish Rane, Director of Valuation and Financial Advisory at Aranca.
“Venture capitalists now prioritize operational cash flows overgrowth according to their playbook. The significant drop from 23 unicorns in 2022 to two, in 2023 highlights the necessity for
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