The data analytics and consulting firm GlobalData has recently revealed that Indian startups witnessed a massive fall in venture capital (VC) funding in the first eight months of 2023. The report noted that from January to August 2023, the startup-focused VC funding in India plunged 71.5%, compared to the same period a year ago. The first eight months of 2023 saw $4.9 billion raised in funding, compared to the $17.1 billion funding raised during the same period last year.
An analysis of GlobalData’s Financial Deals Database also revealed that VC funding deal volume recorded a 42% YoY decline over 1,266 VC funding deals announced during January-August 2022. Meanwhile, the corresponding deal value declined by a massive 71.5% YoY compared to $17.1 billion worth of funding raised during January-August 2022. The data further pointed out that both deal volume and value declined on a YoY basis, however, the fall was much more substantial in terms of the funding value.
Commenting on the findings, Aurojyoti Bose, Lead Analyst at GlobalData stated, “Apart from several macroeconomic challenges and geopolitical conditions grappling global VC funding landscape and making a dent in investor sentiments, Indian startup ecosystem is grappling with rising investor caution regarding startup valuations.”
According to the report, the decline in VC funding activity is not just limited to India, but is rather a global phenomenon with the majority of the big markets witnessing a fall in deal volume as well as value. The firm emphasized India’s stature as one of the top APAC markets for VC funding activity, belonging right next to China in terms of deal volume and value, in addition to the country also being one of the top five global markets.
Wrapping up with the findings done by the analytics platform, Bose said, “In the evolving landscape of VC funding, adaptability and strategic valuation assessments are crucial for the sustainability of the Indian startup ecosystem. While challenges persist, the resilience of these ventures, exemplified by notable funding deals, reaffirms the enduring potential of the Indian entrepreneurial spirit.”
Finally, he opined that the Indian startup ecosystem needs to adapt and strategically evaluate assessments to sustain itself in the VC funding segments.
Previously released statistical reports on Indian startups, considering the industrial performance for the past few months, also took other aspects of the ecosystem and found out that apart from funding, India also witnessed a sharp decline in the number of unicorns in H1 2023.
