In Charts: How Startup Funding Fared In 2023
- The funding environment dampened in 2023, with funding dropping as much as 62% to about Rs 67,000 crore, or roughly $8 billion.
- Some of the Covid-19 darling sectors like edtech, digital media, gaming, and Web 3.0 are seeing lesser investor interest due to slowing growth, struggles with some large players, as well as regulatory challenges.
- Even with muted sentiment, there were startups that managed to raise large, triple-figure amounts at incremental valuations.
- Among institutional investors, it was 100X.VC that led the charts as the most active investor.
- Outlook for 2024 is more optimistic, with increased deal activity expected.
The funding environment dampened in 2023, with muted interest from investors looking to park funds in India’s burgeoning startup ecosystem. Funding dropped as much as 62% to about Rs 67,000 crore, or roughly $8 billion.
Some of the Covid-19 darling sectors like edtech, digital media, gaming, and Web 3.0 are seeing lesser investor interest due to slowing growth, struggles with some large players, as well as some regulatory challenges. However, even with muted sentiment, there were startups that managed to raise large, triple-figure amounts at incremental valuations.
Among institutional investors, it was 100X.VC that led the charts as the most active investor, followed closely by big names such as Peak XV Partners and Blume Ventures. 100X.VC has stated that they will continue to actively invest in potential startups within the next six months and that they are sector-agnostic and will explore opportunities across all industries.
Looking ahead to 2024, the outlook is more optimistic. Investors expect increased deal activity and potential funding ranging between $15-20 billion. Emerging sectors like beauty and personal care, health and wellness, diagnostics, clinics, gaming, app studios, and personal loans are poised to take center stage in the evolving startup landscape. There is also expected to be a surge in funding for deep tech startups, indicating a shift from the dominance of software-as-a-service companies. Additionally, homegrown venture capital funds and family offices are anticipated to become key investors, as many foreign investors have started exiting from the country.
Despite the challenges faced in 2023, investors and industry experts are hopeful that the startup ecosystem in India will rebound in the coming year, driven by various sectors and the emergence of new funding sources.
