Indian Startups Raise $2.8B In Q1 2023; 75% YoY Decrease: Report
Indian startups raised a total of $2.8 billion in Q1 2023, which is 75 per cent lower than the same period last year, according to Tracxn Geo Quarterly Report: India Tech.
Funding in the late-stage rounds saw a decline of 79 per cent compared to Q1 2022, and a 23 per cent drop compared to Q4 2022, with early-stage rounds seeing a 4 per cent drop compared to Q4 2022, and a 68 per cent drop compared to Q1 2022. In Q1 2023, there were no new unicorns created, compared with 14 unicorns in Q1 2022.
However, there has been a positive uptick in month-on-month funding, which saw a significant increase of 54 per cent from $777 million in February 2023 to $1.2 billion in March 2023. The leading sectors in terms of funding this quarter were FinTech, Retail, and Enterprise Applications. The report noted that there were 9 $100M+ funding rounds, with companies like PhonePe, Lenskart, Mintify, Insurance Dekho, FreshtoHome foods, TI Clean Mobility, and KreditBee securing big-ticket deals.
Bangalore emerged as the leader in total funds raised, followed by Delhi and Mumbai, while 100X.VC, CIE IIITH, and Accel were the top investors overall. In terms of the breakup of rounds participation, 100X.VC, CIE IIITH, and IPV were the top seed investors, Accel, Sequoia Capital, and Alteria Capital were the top early-stage investors, and Premji Invest, Elevation, and Chiratae Ventures were the top late-stage investors.
The report also highlighted that there were 46 acquisitions in Q1 2023 compared to 43 in Q4 2022, and Gram Power was acquired by Squared Capital for $100 million, and Adpushup was acquired by Geniee for $70 million. In terms of IPOs, Robu Labs, Mars Capital, and Homesfy went public in the first quarter of 2023.
Overall, the report indicates that total funding declined by 21 per cent in Q1 2023 compared to Q4 2022, while the number of funding rounds experienced a drop of 10 per cent and 63 per cent compared to Q4 2022 and Q1 2022, respectively. Nevertheless, there have been some positive developments, such as an uptick in month-on-month funding and the success of certain sectors, which could indicate a brighter future for Indian startups.
