Startup funding in India fell 29 percent, the lowest in five years, at the end of the year

Ahmedabad: The Indian startup ecosystem has faced many challenges in the difficult period of inflation after the corona epidemic. Along with rising interest rates, several issues put brakes on the startup's defined plans and growth, which has hit their valuations. Investors are making new investments by re-valuing for new funds and checking all aspects.

According to market intelligence platform Traxen's latest Geo Quarterly Report India Tech 3, 2023, the third quarter of July-September, 2023 saw a significant drop in fundraising. Only $1.5 billion was raised last quarter, a 29 percent drop from the previous quarter and a staggering 54 percent drop from the same period last year.

Late-stage rounds saw a 33 percent decline compared to the same quarter last year, while early-stage and second-stage funding fell 74 percent and 75 percent, respectively. Apart from this, two unicorns - Zepto and Xyber 365 were also created in the July-September quarter. However, it shows a decrease of 50 percent compared to the previous year.

A total of 33 acquisitions were made during the quarter, a year-on-year decline of 13%. Only five funding rounds have crossed $100 million in this period, including companies like Perfios (topping out at $22.9 million), Zepto, Ola Electric, Aether Energy and Xyber365.

Along with this, the Indian tech space has seen a 'decrease' in funding for the third consecutive quarter after an increase in funding in the fourth quarter of 2022 and also the lowest funding quarter in the last five years'.

Despite facing funding challenges, India ranked as the 'fifth highest funded country' in the third quarter of 2023 and has been the fourth highest country so far in the current year.

According to the data, enterprise applications, fintech, and transportation and logistics tech performed best in the last quarter. Enterprise application funding increased 51% over the previous quarter, fintech funding grew 68% to $436 million, and transportation and logistics tech received $375 million in funding, a decrease of 72%.