India’s startup-focused venture capital (VC) funding space underwent significant changes in the first eight months of 2023. During this period, 734 VC funding deals were announced, amassing a total of $4.9 billion. While there was a year-on-year (YoY) decrease in both deal volume and value compared to the same period in 2022, the decline was more substantial in terms of funding value, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that VC funding deal volume recorded 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.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “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.”
Nevertheless, subdued VC funding activity is now a global phenomenon with most of the key markets experiencing decline in deals volume as well as value. India, apart from being a top APAC market for VC funding activity and standing just next to China in terms of deals volume as well as value, is also one of the top five global markets.
India accounted for 5.3% of the total number of VC funding deals announced globally during January-August 2023. Meanwhile, its share of the total disclosed funding value stood at 3.1%.
Some of the notable VC funding deals announced in India during January-August 2023 include $250 million fundraising by PhysicsWallah, $200 million worth funding raised by Zepto, $200 million fundraising by PhonePe, $146 million worth funds raised by Veritas Finance, and $120 million fundraising by KreditBee.
Bose concludes: “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.”