Startup funding winter could extend 6 to 12 months despite positive indications: Redseer survey

economictimes.indiatimes.com:

Redseer. Nearly 50% of investors in the survey, conducted in June 2023, were optimistic about a resurgence in funding within the next six to 12 months. Additionally, 17% of respondents believe this upswing could happen even sooner.

The remainder expected a longer timeline of 12-18 months or more before the funding challenges subside. The funding trend in 2023 is expected to align with long-term patterns seen from 2017 to 2020, and funding amounts are projected to range between $12 billion and $15 billion this year. Beyond that, a bullish trend is predicted for 2024, potentially reaching $15 billion to $20 billion, Kanishka Mohan, a partner at Redseer, said during the company’s business summit.

“I think it will likely take nine to 12 months for the market environment to stabilise. I believe that growth investing will gain momentum at that point due to the substantial available capital,” said Hemant Taneja, MD and CEO of venture capital firm General Catalyst, as quoted by Redseer in its report. Despite a drop in funding deals in early 2023 (700 to 900 deals from 1,519 deals in 2022), Redseer anticipates a rebound in 2024, with deals expected to range from 1,000 to 1,200 and venture capitalists (VCs) currently possessing more available funds, indicating a positive outlook.

This sentiment is echoed by this year's deal distribution, with 90% of expected deals being seed or early-stage investments, aligning with trends observed since 2017. A recent Redseer report published in ET disclosed that approximately 40 startups or new-age firms could become publicly traded or be ready to list shares on stock exchanges by FY25, signalling a growing emphasis on profitability within the ecosystem. Redseer's projections identify several