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India tech startups see lowest funding in five years, just two unicorns in 2023

Economic Times

Economic Times · 1y ago

India tech startups see lowest funding in five years, just two unicorns in 2023

According to a report by market intelligence platform Tracxn, India's tech startup ecosystem experienced the lowest funding in the last five years, dropping India's global ranking from 4th to 5th place. The total funding received in 2023 was $7 billion, a decline of 72% compared to the previous year. Only two unicorns were created in 2023, as opposed to 23 the year before. Late-stage funding saw the biggest drop of over 73%, followed by early-stage funding (70%) and seed-stage funding (60%). Despite the slowdown, investors remain optimistic about India's future success in the tech startup space.

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2023 saw the lowest number of startups being founded in a decade.

OutlookIndia

OutlookIndia · 1y ago

2023 saw the lowest number of startups being founded in a decade.

In 2023, India's startup ecosystem faced challenges including significant valuation markdowns for unicorns and the closure of over 15 startups. Funding winter, cautious investors, and a focus on profitability were cited as reasons for the decline. The number of new tech startups founded in 2023 was the lowest in a decade, and funding activity reached its lowest point in seven years. Experts suggested that the decline in startups may be influenced by factors beyond funding, including market saturation and cost disparities. Tax concerns and global investors looking away from Indian startups also played a role. However, despite the challenges, the cumulative funding for tech startups in India reached $8.4 billion, and investors are hopeful for a promising 2024 with anticipated IPOs.

What’s next for India’s unicorn club in 2024?

Inc42 · 1y ago

What’s next for India’s unicorn club in 2024?

The Indian startup ecosystem experienced a slowdown in creating new unicorns in 2023, with only two emerging, marking the lowest number since 2017. However, as investors regain confidence in 2024, at least a dozen startups are expected to join the unicorn club. The fintech sector is likely to produce the most new unicorns, followed by ecommerce and enterprise tech. Startups are also considering going public to secure funds, with 14 tech startups expected to list in 2024. Additionally, the trend of reverse flipping, or redomiciling Indian startups back to India, is becoming prominent.

Six startups crossed $1 billion valuation mark in 2024

Inshorts · 8m ago

Six startups crossed $1 billion valuation mark in 2024

After a brief lull in 2023, the Indian startup ecosystem regained its momentum and churned out unicorns in healthy numbers in 2024. While just two startups achieved the coveted status last year on account of the extended funding winter, as many as six new-age tech companies entered the billion-dollar valuation club in 2024.

147 Indian startups likely to become unicorns in 5 years: Report

Inshorts · 2y ago

147 Indian startups likely to become unicorns in 5 years: Report

According to the 'ASK Private Wealth Hurun India Future Unicorn Index 2023' report, India is expected to have 147 unicorn companies in the next five years. The report highlights that there are presently 51 gazelles, which are likely to achieve unicorn status within three years, and 96 cheetahs, which are anticipated to attain unicorn status within five years. The report also includes startups like Zepto and Rapido in the list of potential future unicorns.

Startup funding in India hits a 7-year low of $10 Bn in 2023

Inc42 · 1y ago

Startup funding in India hits a 7-year low of $10 Bn in 2023

According to the "Indian Tech Startup Funding Report 2023" by Inc42, Indian startups raised over $10 billion in funding in 2023, marking a 60% decrease compared to 2022. This is the lowest level of funding in seven years. The number of deals also declined by 40.8% compared to the previous year. The report highlights that five startups alone accounted for more than $2.8 billion of the total funding. The median ticket size dropped to $2.2 million from $4 million in 2019, and funding for women-led startups declined by 80%. Seed stage funding faced the most significant decline at 72% year-on-year. E-commerce and fintech sectors emerged as the top sectors in terms of deals and funding amounts.

Is Pune The Next Bengaluru In The Making?

Inc42 · 10m ago

Is Pune The Next Bengaluru In The Making?

- Pune has seen a rapid rise in the number of unicorns, with close to 10 unicorns emerging in just four years. - Smaller cities like Pune, Hyderabad, Chennai, Ahmedabad, and Jaipur are challenging the tech startup dominance of Bengaluru, Delhi NCR, and Mumbai. - Pune's proximity to Mumbai and its young, ambitious talent pool make it an attractive location for startups. - Despite challenges in infrastructure and public transport, Pune has the potential to expand beyond its limits through government initiatives and tax incentives. - Pune is the most promising emerging startup hub in India, with significant investor interest and a total funding of $4.7 Bn raised across 355 deals between 2014 and 2023.

Indian startups witness 65.8% drop in funding between Jan-Nov 2023: GlobalData

Livemint

Livemint · 1y ago

Indian startups witness 65.8% drop in funding between Jan-Nov 2023: GlobalData

Indian startups have experienced a significant drop in funding, with a decrease of 65.8% in terms of value between January and November 2023. The startups raised $6.9 billion in VC funding this year, compared to $20.2 billion in the same period last year. Only two new unicorns have been created in India this year, compared to 24 in 2022. India now ranks fourth among the highest-funded tech startup geographies globally, with a total funding of less than $10 billion.

Funding in Indian startups sinks to $7 billion, lowest since 2017

Economic Times

Economic Times · 1y ago

Funding in Indian startups sinks to $7 billion, lowest since 2017

Indian startup funding experienced a significant decline in 2023, totaling $7 billion, less than one-third of the $25 billion received in the previous year, marking a seven-year low. The fourth quarter of 2023 saw the lowest equity investment for new-age ventures since Q3 2016. Only two new unicorns were created, a 91% drop from 2022. Late-stage startups faced challenges, with some resorting to debt instruments. Funding plummeted in late-stage companies by over 73%, while early-stage and seed-stage funding dropped by 70% and 60%, respectively. The downturn reflects a cautious approach by investors amid global uncertainties.

Indian space tech startups secured $126 million funding in 2023, up 7% from 2022: report

Economic Times

Economic Times · 1y ago

Indian space tech startups secured $126 million funding in 2023, up 7% from 2022: report

India's space technology sector has seen a significant increase in funding, reaching $126 million in 2023, up 7% from the previous year. This marks a substantial growth of 235% since 2021. The sector is driven by government support and notable innovations. The country currently has over 100 space tech startups, with the majority founded in the last five years. Funding mainly occurs in the early stages, with early-stage rounds accounting for $120 million of the total funding. However, the ecosystem for late-stage funding in Indian space tech startups is still developing. Skyroot Aerospace, Pixxel, and Agnikul are the top-funded startups in this field. Bengaluru leads as the city with the highest funding and the most space tech startups. Notably, there have been no significant acquisitions or emergence of unicorns in the sector as of 2024.

Investors jittery as some Indian startups' fall from grace dwindles faith

VCCircle

VCCircle · 1y ago

Investors jittery as some Indian startups' fall from grace dwindles faith

Investors are becoming cautious and cutting back funding for Indian startups after several high-profile failures. Once eager to invest billions in Indian tech ventures, investors have been burned by falls in valuations such as those seen by digital payments firm Paytm. India's startups raised just $900 million in the first two months of 2023, following a six-year low of $8 billion in 2022. This drop in investment could have broader economic impacts, as startups have generated up to 25% of new jobs and 15% of economic growth in India in recent years.

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