TLDR:
VC funding for startups in India fell by 63% to $9.6 billion in 2023 compared to the previous year. Despite the overall decline, funding for generative AI surged, and analysts expect a rebound in sectors like B2C commerce and software & SaaS.
Summary:
Venture capital funding for startups in India saw a significant decrease of 63% to $9.6 billion in 2023 compared to the previous year. This decline was attributed to a cautious approach by investors due to a subdued global economic outlook. However, funding for generative AI experienced a notable increase, jumping to $250 million from $15 million in 2022.
Analysts are optimistic about the potential rebound in sectors like B2C commerce and software & SaaS in the current year, driven by structural tailwinds and startups’ efforts to operate more efficiently. Sai Deo, a partner at Bain & Company, highlighted the maturation of both investors and startups in terms of their sector focus and operational efficiency.
The report also mentioned the diversification strategies recommended for mutual fund investors, including equity savings, target maturity, small-cap, ELSS, passive index, technology, and geographically diversified funds for effective goal achievement.
