Funding In Indian Startups Plunges 75%

NEW DELHI, (IANS) – Indian startups raised a total of $2.8 billion in funds in the first quarter of 2023, a massive 75 percent lower compared to the same period in the previous year ($11.9 billion), as rising inflation and interest rates continue to impact investments significantly amid a deepening funding winter, a report showed on April 10.

There were no new unicorns created in the January-March period, compared with 14 unicorns in Q1 2022, according to the report by Tracxn, a leading global market intelligence platform.

The funding volumes contracted due to the reduction in late-stage funding, which declined by 79 percent in the first quarter ($1.8 billion) compared to Q1 2022.

Early-stage rounds saw funding of $844 million, a drop of 4 percent compared to Q4 2022 but a drop of 68 percent compared to Q1 of 2022.

Moreover, seed funding rounds in Q1 2023 saw funding of $153 million, a 16 percent drop from Q4 2022. Although funding has decreased YoY, the MoM comparison is more promising as Indian startups saw a significant uptick of 54 percent from $777 million in February 2023 to $1.2 billion in March 2023.

Late-stage rounds in Q1 of 2023 saw funding of $1.8 billion, a decline of 79 percent compared to Q1 of 2022 and a 23 percent drop compared to Q4 last year.

Total funding declined by 21 percent in Q1 2023 as compared to Q4 2022, the report mentioned.