The venture capital (VC) funding in start-ups dropped by 65.8 per cent to $6.9 billion during January-November 2023 compared to $20.2 billion during the same period in the previous year, according to GlobalData.

VC funding deal volume during January-November 2023 registered a decline of 38.4 per cent to 1,013 deals, compared to 1,644 deals announced in the year-ago period, according to GlobalData, a data and analytics company.

“VC funding activity declined both in terms of volume and value, but the more prominent decline in terms of value suggests the prevailing harsh funding winter. The havoc that the funding winter has created in India in 2023 is also evident from the fact that the total VC funding value is yet to touch the $10 billion mark,” said Aurojyoti Bose, Lead Analyst at GlobalData.

The report noted that it took only four months for India to surpass the $10 billion mark in total VC funding value in 2022.

India accounted for 5.5 per cent of the total number of VC funding deals announced globally during January-November 2023, while its share of the corresponding disclosed deal value stood at 3.1 per cent.

Some of the notable VC funding deals announced in India during January-November 2023 include a $250 million fundraising by PhysicsWallah, $229 million raised by Perfios Software Solutions, $200 million fundraising by PhonePe, $200 million raised by Zepto, and $120 million in funding raised by Zetwerk.

“Nevertheless, start-ups are aware that VC firms continue to see India as an attractive market and they will not mind placing bets in promising companies. India, apart from being a key APAC market for VC funding activity, standing just next to China in terms of both deal volume and value, is also among the top five markets globally. Against this backdrop, start-ups have started undertaking restructuring exercises focusing on sustainable growth and profitability to navigate through this funding drought and gain investor confidence,” Bose added.

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