Funding for startups in global hubs has taken a hit due to a decline in venture capital (VC) funding. In 2023, VC funding fell by 63% to $7.8 billion in India, 47% to $109.4 billion in the US, and 27.4% to $42.6 billion in China. The funding winter, which began in late 2021, has continued into 2023 and has had a harsher impact on startups. Concerns around startup valuations and macroeconomic challenges have also affected investor sentiments. Despite the decline, India still remains one of the top-five global markets for VC funding and secured 5.6% of the global number of VC deals announced in 2023.
In India, 1,085 VC funding deals worth $7.8 billion were announced in 2023, a 37.9% decline in volume compared to the previous year. China, the second-largest global market for VC funding, saw a 16.6% decline in volume and a 27.4% decline in value of VC deals compared to 2022. The US experienced a 43.5% decline in volume and a 45.6% decline in value of VC deals compared to the previous year.
In summary, the funding winter has significantly impacted VC funding in global startup hubs, leading to a decline in deals across India, China, and the US. However, India has maintained its position as a top-five global market for VC funding and startups with strong fundamentals and a clear roadmap continue to secure funding.
