Funding in startups continues to be weak, with investors waiting for proper valuations of companies

Mumbai: Funding in the country's startup ecosystem has not increased in the current calendar year. Uninvested venture capital has drawn the most in seven years as investors await valuations of startup companies. Investors now want to invest in companies that are associated with good revenues and profits. This has made the assessment more realistic.

According to the data, 231 funding deals were done between January 1 and March 21 this year. However, this has failed to boost sentiment, as entrepreneurs as well as investors believe that the perceived weakness in funds is likely to continue.

This year's funding was less than $10.5 billion. Last year, from January 1 to March 21, $10.5 billion was funded through 696 deals. Also, the number of unicorns has not increased. Unicorns are startup companies valued at more than $1 billion.

Unicorns were very attractive to the startup sector until the funding meltdown in mid-2022. In 2022, 23 unicorns were added and in 2021, 42 were seen. In the past, many companies raised funds at high valuations under pressure. Investors are now realizing that this requires a lower valuation and they look at the core of the business.

However, if compared to 2022, the number of large-sized deals has not yet increased. 61 investment rounds of 100 million dollars size in 2022 and 105 such rounds in 2021 have been recorded. Most startups are currently struggling to raise funds and the funds being raised are not at attractive valuations.