Startup funding plummets but India still one of top 3 funded geographies
T
he total funding in H1 2023 declined by 24 per cent compared to H2 2022, and a staggering 72 per cent drop compared to H1 2022 .
The number of funding rounds also experienced a substantial decrease in H1 2023 , with a drop of 43 per cent compared to H2 2022 and 66 per cent compared to H1 2022 , according to Tracxn, a SaaS-based market intelligence platform.
Despite India being one of the top-performing countries across the globe with respect to funding in the private sector, it is currently facing a deceleration in funding due to inflation and other macroeconomic factors, said Neha Singh, Co-Founder, Tracxn.
Nevertheless, India still continues to be one of the fastest-growing economies.
India's startup ecosystem ranked third in terms of funding in 2022, and it moved up to second in Q1 2023, and there is a tremendous amount of growth potential, she mentioned.
Late-stage rounds in H1 2023 witnessed a decline of 71 per cent, amounting to $3.8 billion, compared to H1 2022.
Early-stage rounds secured $1.4 billion, reflecting a 44 per cent decline from H2 2022 and a significant 73 per cent drop from H1 2022.
Seed-stage rounds faced a similar fate, with a 41 per cent drop from H2 2022 and a 71 per cent fall from H1 2022, securing only $315 million in funding.
Despite these challenges, the first half of 2023 witnessed 14 funding rounds surpassing $100 million, marking a 17 per cent increase from H2 2022, said the report.
The investment environment has seen a plunge in funding, but there is a revolution in Tier 2 and Tier 3 cities with an increased rate in the number of startups being formed, which is fuelling the country's economic growth, said Abhishek Goyal, Co-Founder, Tracxn.
Bengaluru emerged as the leader in total funds raised during this period, followed by Delhi NCR and Mumbai.
✔️ Startup funding plummets but India still one of top 3 funded geographies
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