As per the latest report by market data platform Tracxn, the global funding winter has hit the Indian start-ups hard as the funding has took a nosedive and as compared to previous years’ $11.6 billion, this year witnessed a decrease of 75% in the January-March period as compared to last year.
This year the funding in the January-March period stood at mere $2.8 billion. This plummeting number can be attributed to the rise in inflation and tightening of easy money by central banks globally. This has happened as the funding has fallen 24% in the period on a sequential basis as against a close to 9% rise in the prior quarter.
Indian Startups’ Funding Unquenched
As compared to last year, the number of foreign institutional investors pumping money into Indian startups has decreased from 391 to only 74.
Though India was the second-highest funded country after the United States, the quarter did not see any unicorns created.
Whereas as many as 14 unicorns were generated by the startup ecosystem in the year-ago period. As per the data, the number of funding rounds saw a 63% drop year-on-year (y-o-y) to 301 in the January-March period.
Amongst all the startups, those at the late-stage deals faced the flak, as it witnessed the high shrink in the funding, which stood at $1.8 billion as compared to $8.8 billion in the same period last year. These are the funding that are given to the startup to scale its operations and maximise performance.
There was a 16% drop quarter-on-quarter for the seed stage rounds as they got a funding of $0.15 billion.
In the January-March period, a funding of $0.84 billion was seen in the early-stage rounds. This was a 68% decline from a year ago– it saw a sequential drop of 4%.
PhonePe Leads in Funding; Bangalore Loses Some, Delhi Gains Some
Speaking of the Series D fund raise, then amongst all startups, PhonePe with $0.7 billion led the show.
Other startups that managed to raise over $0.1 billion funds in the January-March quarter include Lenskart, Mintify, Insurance Dekho, FreshtoHome foods, TI Clean Mobility and KreditBee.
The report pointed out that “Fintech, retail, and enterprise applications were the top-performing sectors in Q1 2023″.
As compared to previous year, the fintech space saw a 150% funding growth.
However, this is a drop of 51% on year-on-year basis. Companies in the electric vehicle (EV) space received a funding of $0.3 billion in this quarter.
City-wise, with $1.2 billion, Bengaluru continued to be the top city on startup funding in the March-ended quarter. However, Delhi made gains with startups in the national capital seeing $0.6 billion worth of funding compared to close to $0.2 billion in the previous quarter. Gurugram’s share in total funding dropped to 11% from 21% in the prior quarter.
